Fees Over ‘Bad Faith’ Suit About Three-Word Trade Secret Upheld

A fracking company and its law firm owe attorneys’ fees after the Sixth Circuit upheld sanctions for a “bad-faith” lawsuit over an alleged three-word trade secret buried in a discovery document.

Terves LLC acquired a settlement agreement between Magnesium Machine LLC and another company through a valid subpoena, had no reason to think it contained a trade secret, and didn’t use or disclose the information, the U.S. Court of Appeals for the Sixth Circuit said. Magnesium Machine exaggerated the scope of the alleged trade secret in its complaint, which amounted to three words ending in “patent,” the court said.

The ...