A San Diego law firm has been spared $1 million in sanctions by the 6th U.S. Circuit Court of Appeals in a trade secret case.

The 6th Circuit ruled on Wednesday that, under federal law, courts may not impose sanctions on law firms — as opposed to individual lawyers — for knowingly pursuing meritless lawsuits. The decision in BDT Products Inc. v. Lexmark International Inc. reversed a lower court ruling, which had imposed $1 million in sanctions on Meisenheimer Herron & Steele for bringing an allegedly meritless trade secret case against Lexmark.