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Archive for the ‘Sister State Construction of UTSA’ Category

Tenth Circuit Denies Prejudgment Interest for Lack of Certainty Even Where Jury Found Lost Profits and Awarded Unjust Enrichment

In Damages, Prejudgment Interest, Sister State Construction of UTSA on August 16, 2011 at 5:15 pm
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In a trade secrets case where the jury awarded plaintiff ClearOne Communications, Inc. damages on lost profits and unjust enrichment, the Tenth Circuit held that prejudgment interest was not appropriate because the damages calculations were based on speculation and assumptions and lacked the mathematical certainty required to justify an award of prejudgment interest.  ClearOne Communications v. Chang, et al., 2011 WL 3468215, No. 09-4128 (10th Cir. Aug. 9, 2011) (slip op.).

Background

ClearOne licensed to Biamp Systems Corporation an acoustic echo cancellation (AEC) algorithm for an average price of $83.49 per channel in 2002. Id. *1. In 2004, WideBand Solutions, Inc. and associated individual defendants agreed to develop AEC software for Biamp and allegedly developed said software based upon ClearOne’s trade secret computer code. Id. Biamp stopped making payments to ClearOne and instead began a licensing agreement with WideBand in 2005. Id. Biamp allegedly used the infringing code to develop its product.  Id. In 2006, Biamp developed its own technology and stopped licensing WideBand’s allegedly illicit code. Id.

Damages Calculations

ClearOne’s damages expert Richard Hoffman calculated lost profits and unjust enrichment. Id. Hoffman calculated lost profits by multiplying the number of channels Biamp licensed from WideBand by $83.49 (the average price per channel from the ClearOne/Biamp contract). Id. The jury found that ClearOne was entitled to $956,000 in lost profits against the WideBand defendants, and $956,000 in lost profits against Biamp. Id. Read the rest of this entry »

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Eastern District of New York Holds That Contact List Is Not Entitled to Trade Secret Protection Because Information is Readily Duplicated Through Facebook or LinkedIn

In Customer lists, Ready Ascertainability, Secrecy, Sister State Construction of UTSA on September 29, 2010 at 5:23 am
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In a sign of the times, District Judge Arthur D. Spatt of the Eastern District of New York adopted the recommendations of Magistrate Judge A. Kathleen Tomlinson who denied a motion for preliminary injunction in a trade secrets misappropriation case involving a customer list.  Sasqua Group, Inc. v. Courtney, No. CV 10-528(ADS)(AKT), 2010 WL 3613855 (E.D.N.Y. 2010 Aug. 2, 2010) (slip op.). The court reasoned that because the information could be properly acquired or readily duplicated through public databases such as Facebook and LinkedIn, the information was not entitled to trade secret protection.  Id. *23.

In sum, Plaintiffs have failed to prove a physical appropriation or copying of confidential information or wrongful disclosure or use of a trade secret. See Leo Silfen, 29 N.Y.2d at 389, 328 N.Y.S.2d at 424, 278 N.E.2d 636. The information in Sasqua’s database concerning the needs of its clients, their preferences, hiring practices, and business strategies, as well as Sasqua’s acquaintance with key decision-makers at those firms may well have been a protectable trade secret in the early years of Sasqua’s existence when greater time, energy and resources may have been necessary to acquire the level of detailed information to build and retain the business relationships at issue here. However, for good or bad, the exponential proliferation of information made available through full-blown use of the Internet and the powerful tools it provides to access such information in 2010 is a very different story. Read the rest of this entry »

Forgotten Provision in the California Uniform Trade Secrets Act: Uniformity

In Sister State Construction of UTSA on September 20, 2010 at 8:33 pm
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California adopted the Uniform Trade Secrets Act in 1984 after the National Conference of Commissioners on Uniform State Laws completed the UTSA in 1979.  Forty-six states and the District of Columbia have enacted trade secret legislation, the vast majority of which substantially resembles the uniform act.  Michael R. Greco writes a uselful reminder that the UTSA has an often overlooked uniform construction provision:

This Act shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this Act among the states enacting it.

This section has been adopted by California.  Cal. Civ. Code § 3426.8.

Greco notes that this clause means that an advocate should look to sister state interpretations of the UTSA: Read the rest of this entry »