IP Law Daily, TRADE SECRETS—6th Cir.: Mortgage lender entitled to partial attorney fees despite no trade secret damages award, (Jan 7, 2026)

By Saurabh Kashyap, B.A., M.A., LL.B., LL.M.

Appeals court finds misappropriation willful and malicious, affirms fee award under DTSA and OUTSA.

The U.S. Court of Appeals for the Sixth Circuit affirmed a partial award of attorney fees and costs granted to mortgage lender Equity Resources, Inc. by an Ohio federal court, despite the jury awarding no damages on two of the three claims tried. It concluded that Equity qualified as a “prevailing party” under the Defend Trade Secrets Act (DTSA), 18 U.S.C. § 1836, and the Ohio Uniform Trade Secrets Act (OUTSA), Ohio Rev. Code § 1333.64, due to the jury’s finding of willful and malicious misappropriation (Equity Resources, Inc. v. T2 Financial, LLC, No. 25-3255 (6th Cir. Jan. 5, 2026)).

Background. Equity Resources, Inc. is a mortgage lending company. Its competitor, defendant-appellant T2 Financial, LLC, doing business as Revolution Mortgage, is also engaged in mortgage lending.

According to Equity, the trade secrets at issue included internal pipeline reports, customer contact lists, and other proprietary mortgage loan data maintained in password-protected software systems. These materials included information such as the status of ongoing loan applications, customer credit details, loan types, and contact history—all maintained as part of Equity’s internal operations and inaccessible to the public.

Equity filed suit in November 2021, asserting three claims: (1) misappropriation of trade secrets under DTSA and OUTSA; (2) tortious interference with business relationships; and (3) conversion. Equity later voluntarily dismissed its claims against individual employees and proceeded solely against Revolution. In March 2024, a jury returned a verdict in Equity’s favor on all three claims, awarding $73,709.77 in damages solely on the conversion claim, but awarding no damages for the misappropriation or tortious interference claims. Crucially, the jury found Revolution’s misappropriation of trade secrets to be willful and malicious.

Following the verdict, Equity moved for attorney fees, costs, and interest. The district court partially granted the motion, awarding $243,115.39 in attorney fees and $14,746.79 in costs but denying interest. Revolution appealed the fee award and attempted to challenge the underlying jury verdict.

Jurisdictional bar. The Sixth Circuit first addressed whether it had jurisdiction to consider Revolution’s appeal of the merits. The court held that Revolution’s appeal of the underlying judgment was untimely under Federal Rule of Appellate Procedure 4(a)(1)(A), which required an appeal within 30 days of the March 22, 2024, final judgment. Revolution’s April 4, 2025, notice of appeal, filed after the attorney fees ruling, came too late. Citing White v. New Hampshire Dep’t of Employment Sec., 455 U.S. 448 (1982), the court confirmed that attorney fee awards are collateral to the merits and do not toll the deadline for appeal.

Prevailing party status. The court next turned to whether Equity qualified as a prevailing party under the fee-shifting provisions of DTSA and OUTSA. Both statutes authorize fee awards where misappropriation is found to be “willful and malicious.” Revolution argued that because the jury awarded no damages on the misappropriation claim, Equity could not be deemed to have prevailed.

The Sixth Circuit rejected this argument, holding that a jury finding of liability on all claims—including willful and malicious conduct—sufficiently altered the legal relationship between the parties. Citing Lackey v. Stinnie, 604 U.S. 192, 207 (2025), the court emphasized that prevailing party status does not require monetary damages, only a material alteration in the parties’ relationship.

Reasonableness. The appellate court then evaluated the district court’s methodology in awarding fees. Applying the “lodestar” approach articulated in Hensley and reaffirmed in Freed v. Thomas, 137 F.4th 552, 557 (6th Cir. 2025), the district court calculated a base fee by multiplying reasonable hours by a reasonable rate and then adjusted downward for Equity’s partial success.

Revolution did not challenge the reasonableness of the district court’s lodestar calculation but instead argued that a zero-dollar award for trade secret claims should bar any attorney’s fee award. The court found this position untenable, noting that neither DTSA nor OUTSA conditions fee awards on the presence of damages. The court affirmed the district court’s discretionary authority, citing In re Flint Water Cases, 63 F.4th 486, 501 (6th Cir. 2023).

Inapposite precedents. Revolution cited cases under ERISA and 42 U.S.C. § 1983 to argue that a zero-damages finding should preclude a fee award. The court rejected this line of reasoning, distinguishing Foltice v. Guardsman Prods., Inc., 98 F.3d 933, 939 (6th Cir. 1996), and Farrar v. Hobby, 506 U.S. 103 (1992), as involving different statutory frameworks. The court clarified that Farrar’s reasoning about nominal damages limiting fee recoveries in civil rights litigation does not apply where statutes like DTSA and OUTSA focus solely on willful and malicious conduct.

Revolution also cited Becker Equip., Inc. v. Flynn, 2004 WL 486219 (Ohio Ct. App. Mar. 15, 2004), to argue that the absence of damages defeats a fee award. The court found this reliance misplaced, explaining that Becker turned on the trial court’s finding that the statutory threshold for willfulness had not been met. In contrast, the jury in Equity’s case made an express finding of willful and malicious misappropriation.

Thus, the Sixth Circuit affirmed the district court’s partial grant of attorney fees and costs, rejecting both Revolution’s jurisdictionally barred appeal on the merits and its challenge to the reasonableness of the fee award.

The Case is No. 25-3255.

Judge: Stranch, J.

Attorneys: Molly S. Crabtree (Porter Wright Morris & Arthur LLP) for Equity Resources, Inc. Christopher Warren Tackett (Bailey Cavalieri LLC) for T2 Financial, LLC, d/b/a Revolution Mortgage.

Companies: Equity Resources, Inc.; T2 Financial, LLC, d/b/a Revolution Mortgage

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