Ark. Code Ann. § 4-75-606 (2026)
Damages
- In addition to or in lieu of injunctive relief, a complainant may recover damages for the actual loss caused by misappropriation.
- A complainant also may recover for the unjust enrichment caused by misappropriation that is not taken into account in computing damages for actual loss.
History. Acts 1981, No. 439, § 3; A.S.A. 1947, § 70-1003.
Research References
ALR.
Proper Measure and Elements of Damages for Misappropriation of Trade Secret — Royalties, 28 A.L.R.7th Art. 6 (2018).
U. Ark. Little Rock L. Rev.
Annual Survey of Caselaw, Business Law, 24 U. Ark. Little Rock L. Rev. 883.
Annual Survey of Caselaw: Business Law, 27 U. Ark. Little Rock L. Rev. 593.
Case Notes
Measure of Damages.
In an action for theft of a trade secret, the plaintiff may recover either his own lost profits or the defendant's profits, whichever affords the greater recovery. Saforo & Assocs. v. Porocel Corp., 337 Ark. 553, 991 S.W.2d 117 (1999); Brown v. Ruallam Enters., Inc., 73 Ark. App. 296, 44 S.W.3d 740 (2001), overruled in part, Pro-Comp Mgmt. v. R.K. Enters., LLC, 366 Ark. 463, 237 S.W.3d 20 (2006).
The proper method for the calculation of damages is on the basis of net profit, whether lost by the injured party or gained by the wrongdoer. Brown v. Ruallam Enters., Inc., 73 Ark. App. 296, 44 S.W.3d 740 (2001), overruled in part, Pro-Comp Mgmt. v. R.K. Enters., LLC, 366 Ark. 463, 237 S.W.3d 20 (2006).
This section does not permit a figure determined to be the profit earned by the wrongdoer to be doubled and also does not permit such profit to be rounded off to an even number. Brown v. Ruallam Enters., Inc., 73 Ark. App. 296, 44 S.W.3d 740 (2001), overruled in part, Pro-Comp Mgmt. v. R.K. Enters., LLC, 366 Ark. 463, 237 S.W.3d 20 (2006).
Plaintiff's testimony, coupled with plaintiff's experience in the field, supported an award of $262,312, but such a computation of damages did not address the measure of lost profits suffered by plaintiff or the gain realized by defendants as result of the misappropriation of trade secrets as required by this section; thus, the case was reversed and remanded for a determination of damages under the statutory provisions of the Arkansas Trade Secrets Act, § 4-75-601 et seq.. R.K. Enter., L.L.C. v. Pro-Comp Mgmt., 356 Ark. 565, 158 S.W.3d 685 (2004).
Complainants could recover their actual loss, as may be shown by profits, along with any unjust enrichment damages caused by the misappropriation of trade secrets and, to the extent that Brown v. Ruallam, 73 Ark. App. 296, 44 S.W.3d 740 (2001) was inconsistent with this ruling, it was overruled. Pro-Comp Mgmt. v. R.K. Enters., LLC, 366 Ark. 463, 237 S.W.3d 20 (2006).
Trial court did not err in finding that, although appellees' liability for the misappropriation of trade secrets had been proven, the evidence presented was too speculative to prove the actual damages incurred by corporations as the abstract presented did not establish either the corporations' lost profits or appellees' gains. Pro-Comp Mgmt. v. R.K. Enters., LLC, 366 Ark. 463, 237 S.W.3d 20 (2006).
Because the fair market value of appellants' trade secrets, as determined by the circuit court, had no relation to the value of the trade secrets at the time of the misappropriation because it involved the cost of developing and maintaining those secrets and not their exact value at the time of misappropriation, prejudgment interest was properly denied. Pro-Comp Mgmt. v. R.K. Enters., LLC, 372 Ark. 190, 272 S.W.3d 91 (2008).
Circuit court did not err in holding that the judgment was to apply to the corporation only because the appropriate remedy of damages was to disgorge profits, and the individuals had no profits to disgorge; the individuals were not unjustly enriched such that an award would have been proper under subsection (b) of this section. Pro-Comp Mgmt. v. R.K. Enters., LLC, 372 Ark. 190, 272 S.W.3d 91 (2008).
Proximate Cause.
In a trade secrets action, brought by a foam producer against a former customer/competitor, after a consultant and manager left the producer and helped the competitor develop its own foam, there were material factual disputes regarding misappropriation and the consultant's duty to preserve the trade secret; given the disputed material facts, reasonable minds could differ on the issue of proximate cause for purposes of damages. 3A Composites USA, Inc. v. United Indus., No. 5:14-CV-5147, 2015 U.S. Dist. LEXIS 122745 (W.D. Ark. Sept. 15, 2015).