133 F.4th 1337
Fed. Cir.2025Background
- ams-OSRAM USA Inc. (formerly TAOS) sued Renesas Electronics America, Inc. (formerly Intersil) in 2008 for patent infringement (no longer at issue), misappropriation of trade secrets, and breach of a confidentiality agreement.
- The claims concern ambient-light sensor technology TAOS shared with Intersil during merger discussions covered by a confidentiality agreement expiring June 3, 2007.
- After talks ended, Intersil developed competing products allegedly using TAOS’s proprietary information, resulting in significant sales to Apple.
- The first trial found Intersil liable and awarded millions in damages; on appeal, the Federal Circuit narrowed the trade-secret liability and required further judicial findings, leading to a remand.
- On remand, the district court awarded TAOS $8.5 million disgorgement of profits, $17 million in exemplary damages, reasonable royalties for breach of contract, prejudgment interest, and attorneys’ fees.
- Both sides appealed various aspects of the monetary remedies, but not the fact of liability for trade-secret misappropriation or breach of contract.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Trade secret "proper accessibility" date | Accessibility occurred when Intersil actually reverse-engineered secret (Jan. 2006) | Accessible as soon as public could hypothetically reverse-engineer (Feb. 2005) | Defendant correct; accessibility was Feb. 28, 2005 |
| Head-start period duration | Supported 26 months based on factual development timeline | Argued for shorter (7-22 months) | 26 months affirmed |
| Scope of disgorgement award | Profits from all ISL29003 sales to Apple (iPod Touch and iPhone 3G) | Should be limited to only profits traceable to pre-head-start advantage | Affirmed award for iPod Touch only (properly traceable); iPhone 3G sales excluded |
| Double recovery for trade-secret and contract claims | Different product sets for each claim; no overlap | Claims arise from same injury, so awards are duplicative | No double recovery; damages are for distinct product sales |
| Royalty for Derivative Products | Derivative Products benefited from confidential info, even if not trade secret | No use of trade secret structure = no royalty | Royalty proper for all products using confidential info |
| 10-year royalty duration | 10 years reasonable for industry/product life cycle | Too long given expected public release and agreement terms | Jury’s 10-year term reasonable |
| Attorney fees under confidentiality agreement | Fees permissible under indemnity clause for direct party claims | Indemnity clause only covers third-party claims | Fees allowed under California law |
| Prejudgment interest accrual date | Interest from suit filing date on all sales | Later sales shouldn’t accrue interest from complaint filing | Remand for recalculation; interest from actual sale dates for post-complaint sales |
Key Cases Cited
- Hyde Corp. v. Huffines, 314 S.W.2d 763 (Tex. 1958) (sets standard for "head start" period in trade-secret cases)
- K & G Oil Tool & Service Co. v. G & G Fishing Tool Service, 314 S.W.2d 782 (Tex. 1958) (proper accessibility of trade secret under Texas law)
- Curtis v. Loether, 415 U.S. 189 (1974) (exemplary damages as a legal remedy)
- Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299 (Tex. 2006) (one recovery for one injury principle in Texas)
- Celeritas Technologies, Ltd. v. Rockwell International Corp., 150 F.3d 1354 (Fed. Cir. 1998) (reasonable royalty theory for contract breaches under California law)
- University Computing Co. v. Lykes-Youngstown Corp., 504 F.2d 518 (5th Cir. 1974) (equitable remedies principle—restore parties to pre-wrong position)
- Matthews v. DeSoto, 721 S.W.2d 286 (Tex. 1986) (interest for damages accrues from date of loss-causing event)