Harbor Bus. Compliance Corp. v. Firstbase.io, Inc., 2025 U.S. App. LEXIS 22073
(August 18, 2025) Fisher, Circuit Judge.
Judges: Hardiman, Bibas and Fisher.
Firstbase.io, Inc. and Harbor Business Compliance Corporation formed a temporary partnership to develop a software product for Firstbase. After the partnership fell apart and Firstbase independently took over the product, Harbor sued Firstbase for breach of contract, trade secret misappropriation, and unfair competition. A jury found for Harbor, awarding compensatory damages of approximately $1 million for breach of contract; $11 million for trade secret misappropriation; $15 million for unfair competition; and punitive damages of $1 million. Firstbase appeals the District Court’s denial of several post-trial motions: for judgment as a matter of law; for a new trial on the grounds that the verdict was against the weight of the evidence and that expert testimony was improperly admitted; and for remittitur of the unfair competition damages. For the reasons below, we will affirm the denial of Firstbase’s motions for judgment as a matter of law and a new trial but conditionally remand as to the motion for remittitur.
In March 2023, Harbor sued Firstbase in the District Court asserting state-law claims of unfair competition; breach of contract; and trade secret misappropriation under Pennsylvania’s Uniform Trade Secrets Act, 12 Pa. Cons. Stat. §§ 5301 et seq. It also asserted a federal claim of trade secret misappropriation under the Defend Trade Secrets Act of 2016 (DTSA), 18 U.S.C. § 1836 et seq. The complaint alleged three categories of trade secrets misappropriated: (1) “Workflow Documents,” App. 596, which were “the specific means through which the Parties anticipated servicing Firstbase’s . . . existing users and . . . projected new users,” id. at 595; (2) a jurisdictional database, which consisted of “compilations of detailed [state]-specific jurisdictional requirements,” id.; and (3) “API Documentation,” id. at 603.
To prevail on a trade secret misappropriation claim, a plaintiff must prove both (1) the existence of a protectable trade secret; and (2) the misappropriation of that trade secret. See Oakwood Lab’ys LLC v. Thanoo, 999 F.3d 892, 905 (3d Cir. 2021). Under the DTSA, a plaintiff must also establish that the trade secret “is related to a product or service used in, or intended for use in, interstate or foreign commerce.” Id. (quoting 18 U.S.C. § 1836(b)(1)). Except for this jurisdictional hook and some “different wording,” the DTSA and the Pennsylvania Uniform Trade Secrets Act “essentially protect the same type of information.” Teva Pharms. USA, Inc. v. Sandhu, 291 F. Supp. 3d 659, 675 (E.D. Pa. 2018); compare 18 U.S.C. § 1836(b)(1), with 12 Pa. Cons. Stat. § 5302. Likewise, any minor differences between the definitions of “misappropriation” under the PUTSA and the DTSA are not relevant to this appeal. See 12 Pa. Cons. Stat. § 5302. So, references in this opinion to the DTSA’s requirements also include the PUTSA. A protectable “trade secret” is information, in any form, that the owner “has taken reasonable measures to keep . . . secret,” which “derives independent economic value . . . from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from [it].” 18 U.S.C. § 1839(3). Misappropriation is “improper acquisition, disclosure, or use of a trade secret without consent.” Oakwood, 999 F.3d at 908 n.16 (citing 18 U.S.C. § 1839(5)). Misappropriation “does not include reverse engineering.” 18 U.S.C. § 1839(6).
The second element that the plaintiff must prove in a trade secret misappropriation claim is the misappropriation itself. As mentioned above, this can be established through “improper acquisition, disclosure, or use of a trade secret without consent.” Oakwood, 999 F.3d at 908 n.16 (citing 18 U.S.C. § 1839(5)). Relevant to this appeal is misappropriation by use. To demonstrate improper use, a plaintiff must prove “exploitation of the trade secret that is likely to result in injury to the trade secret owner or enrichment to the defendant.” Id. at 909 (quoting Gen. Universal Sys., Inc. v. HAL, Inc., 500 F.3d 444, 450-51 (5th Cir. 2007)). “Use” has an “expansive interpretation” that encompasses assisting and accelerating product development. A plaintiff may rely on circumstantial evidence showing access to the trade secrets and similarities between those secrets and the accused product. But a defendant is permitted to reverse engineer a product; this does not constitute misappropriation of a trade secret it has access to. 18 U.S.C. § 1839(6)(B). So “it is necessary to disprove independent development—when raised—in order to meet the burden of proving the element of use.” Moore v. Kulicke & Soffa Indus., 318 F.3d 561, 572 (3d Cir. 2003).
Viewing the evidence in the light most favorable to Harbor, there was sufficient evidence of trade secret misappropriation by use. Even assuming the similarities between Firstbase Agent and the alleged trade secrets were insufficient on their own to disprove independent development, there were “plus factor[s]” that suggest Firstbase did not independently develop this technology. Oakwood, 999 F.3d at 912 n.19.
In sum, we conclude Firstbase forfeited its sufficiency-of-the-evidence argument as to protectability and therefore assume that the alleged trade secrets were protectable. Because the evidence of misappropriation by use was sufficient to support the verdict, we will affirm the District Court’s denial of Firstbase’s Rule 50(b) motion.
Accordingly, we will reverse the District Court’s denial of Firstbase’s motion for remittitur of damages. Because “the maximum amount which the jury could reasonably find,” Gumbs, 823 F.2d at 772 (citation modified), is $14,757,399, we will conditionally remit the damages by $11,068,044—the amount the jury awarded for the trade secret claims. Harbor may accept the reduced award or elect a new trial on damages on the trade secret misappropriation claims. See Cortez v. Trans Union, LLC, 617 F.3d 688, 717 (3d Cir. 2010) (explaining that “a court cannot reduce an award without affording the plaintiff the option of a new trial”).
For the foregoing reasons, we will affirm in part and vacate and remand in part the District Court’s judgment and its order denying Firstbase’s motions for judgment as a matter of law, a new trial, and remittitur. The District Court is instructed to conditionally remit the damages by $11,068,044.
• This case involves alleged misappropriation of trade secrets and a substantial verdict.
• Court affirms the judgment but remands for consideration of remittitur. The court defines a trade secret under the Pennsylvania law.
• The court looks to Pennsylvania’s trade secret act, which is Pennsylvania’s Uniform Trade Secrets Act, 12 Pa. Cons. Stat. §§ 5301 et seq.
• The court also looks at the federal claim of trade secret misappropriation under the Defend Trade Secrets Act of 2016 (DTSA), 18 U.S.C. § 1836 et seq.
• The court discusses the sufficiency of the evidence and finds the evidence sufficient.
• The court says that in a trade secret misappropriation case, the misappropriation itself must be proven, which it was here.
