A recent decision by the U.S. Court of Appeals for the Fifth Circuit has opened the door to treble damages in trade secret theft cases, ruling that a pattern of targeting competitors' trade secrets can satisfy the "pattern" requirement under the RICO Act.

According to court documents, EnvTech Inc. v. DeBusk, No. 25-40237 (5th Cir. June 9, 2026), EnvTech alleged that USA DeBusk LLC had stolen its proprietary information and used it to generate millions in revenue. The Fifth Circuit reversed a lower court's dismissal of the case, finding that EnvTech had made a plausible RICO claim against USAD.

The decision marks a significant shift in trade secret law, as it establishes that companies can be held liable for racketeering if they systematically target multiple competitors' proprietary information and pose an ongoing threat. This ruling has implications for businesses across various industries, particularly those that rely heavily on trade secrets to protect their intellectual property.

**Background**

The Defend Trade Secrets Act (DTSA) was passed in 2016, allowing civil suits for treble damages and attorney fees in trade secret theft cases. However, the pattern requirement under RICO has historically been a challenging element for plaintiffs to establish. The Fifth Circuit's decision provides a more reliable path forward, holding that a company's systematic targeting of multiple competitors' proprietary information can meet the pattern requirement.

**What This Means**

The ruling may encourage companies to pursue RICO claims alongside DTSA claims if their proprietary information has been targeted as part of a broader scheme affecting multiple competitors. To build a viable pattern, businesses should document specific acquisition acts, such as copying or possessing stolen trade secrets, rather than focusing on downstream use.

Trade secret intake procedures and onboarding protocols are also crucial for companies to protect themselves against potential RICO claims. As noncompete agreements face mounting legal pressure, robust trade secret protection measures can serve as both a litigation shield and a risk management imperative.