Peter Toren

Two recent federal district court decisions highlight the significant risks of sharing confidential information with a generative AI platform. In Trinidad v. OpenAI, the court dismissed the plaintiff’s trade secret claims under the Defend Trade Secrets Act (DTSA) because the plaintiff had voluntarily disclosed her allegedly proprietary frameworks to OpenAI while using ChatGPT to create them.Then, Judge Rakoff in United States v. Heppner held that documents created using publicly available generative AI are not protected by the attorney-client privilege—in part because communications memorialized through an AI platform are not confidential when the platform is not contractually bound to keep them secret.

Whether the plaintiff has adequately identified the trade secrets that have allegedly been misappropriated is a commonly litigated and critical issue under the Defend Trade Secrets Act (DTSA). Unlike other types of intellectual property—such as patents, copyrights, and trademarks—where the property has already been identified and registered, trade secrets by definition are secret and cannot be identified publicly without destroying the subject matter of the plaintiff’s legal claim. Yet defendants still need to know what secrets they have allegedly misappropriated, and the court needs to know what the case is about.

Companies face substantial liability for trade secret misappropriation. Jury awards this year have reached staggering amounts…. On November 21, 2024, the U.S. Court of Appeals for the Fifth Circuit in Computer Sciences Corp. v. Tata Consultancy Services Ltd., __ 5th Cir. __, 2025 WL 3249148 (5th Cir. 2025), affirmed $56 million in compensatory damages, $112 million in punitive damages, a permanent injunction, and a 10-year monitorship against TCS… The Computer Sciences decision provides critical guidance on trade secret handling under the Defend Trade Secrets Act (DTSA), clarifies what constitutes “willful and malicious” misappropriation, and establishes that exemplary damages may be awarded even where the plaintiff suffers no harm beyond lost profits.

The most contested element in establishing a prima facie Defend Trade Secrets Act (DTSA) trade secret misappropriation claim is whether the owner undertook “reasonable efforts” to maintain secrecy. Defendants routinely cite a lack of or poorly implemented security measures as a defense. On November 18, 2025, the U.S. Court of Appeals for the Fourth Circuit in Samuel Sherbrooke Corporate Ltd. v. Mayer offered guidance on what constitutes such measures at the pleading stage, reversing the district court’s dismissal on the ground that the plaintiff failed to take reasonable measures to protect the trade secrets at issue.

Not every trade secret case involves a company that acquires culturally significant digital and physical assets to create interactive, community-driven experiences across the United States, a “tech-bro” who was sentenced to seven years in prison for securities fraud, a hip-hop group famous for hits like C.R.E.A.M., the most expensive musical work ever sold, and novel legal issues.