Altavion, Inc. v. Konica Minolta System Laboratory, Inc.
226 Cal. App. 4th 26
| Cal. Ct. App. | 2014Background
- Altavion developed Digital Stamping Technology (DST) to create self-authenticating documents via color/grayscale barcodes; it disclosed DST concepts to KMSL under a nondisclosure agreement (NDA).
- KMSL, a Konica Minolta subsidiary, sought to embed Altavion’s DST in its multifunction printers and patented related technology after NDA negotiations.
- Trial court found KMSL misappropriated Altavion’s DST both as a whole and via specific design concepts, and awarded damages, prejudgment interest, and attorney fees.
- On appeal, KMSL challenged (1) misappropriation of DST as a whole and to what extent the trade secrets were identified, (2) whether Altavion’s DST concepts were protectable, and (3) the damages framework including reasonable royalties and interest.
- Altavion’s DST was not generally known; it remained secret except for NDA disclosures; KMSL’s patent filings relied on Altavion’s concepts.
- Court affirmed the judgment for Altavion and awarded appellate costs to Altavion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Altavion’s DST Constitutionally constitutes a trade secret | Altavion’s DST, as a combination of design concepts, is protectable trade secret | DST is an abstract idea or unsupported as a trade secret | Yes, DST concepts are protectable information under UTSA |
| Whether the FSOD adequately identified misappropriated trade secrets | FSOD adequately linked misappropriation to defined DST concepts | FSOD failed to specify DST misappropriation clearly | FSOD adequately identified misappropriated trade secrets, including design concepts (1B, 1C, 2, 12) under the court’s framework |
| Whether Altavion’s trade secrets had independent economic value | Trade secrets had independent economic value from secrecy and competitive advantage | Value was speculative or not shown | Supported; DST design concepts and broader DST had independent economic value |
| Damages—proper measure and prejudgment interest for misappropriation | Reasonable royalties appropriate where actual loss or unjust enrichment unprovable | Royalty framework improper or not supported | Reasonable royalty of $1,000,000 sustained; prejudgment interest affirmed |
Key Cases Cited
- DVD Copy Control Assn., Inc. v. Bunner, 31 Cal.4th 864 (Cal. 2003) (trade secret purposes and value of secrets; policy rationale)
- Silvaco Data Systems v. Intel Corp., 184 Cal.App.4th 210 (Cal. App. 2010) (distinction between ideas, information, and protectable trade secrets; disclosure limits)
- Morlife, Inc. v. Perry, 56 Cal.App.4th 1514 (Cal. App. 1997) (standard of review for substantial evidence in trade secret cases)
- Ajaxo Inc. v. E*Trade Financial Corp., 187 Cal.App.4th 1295 (Cal. App. 2010) (reasonable royalty as measure where actual or unjust enrichment not provable)