Co-authored by Matthew H. Sorenson.
One of the most elusive forms of damage that a company may suffer when its trade secrets are misappropriated or its former employees breach their post-employment restrictive covenants is the loss of goodwill. Given its intangible nature, quantifying the dollar amount of the loss of a company’s goodwill can present significant difficulties. Nevertheless, such damages are often very real and very significant. When seeking money damages for lost goodwill, it is essential for businesses to carefully select their supporting evidence and legal arguments. One information technology service provider recently found out the hard way when the Virginia Supreme Court slashed its $14 million verdict by over $11 million based on the company’s failure to present sufficient evidence of the value of its lost goodwill.