Aristo Vojdani v. Pharmasan Labs, Incorporated
741 F.3d 777
7th Cir.2013Background
- Vojdani and Immunosciences signed a June 2007 letter of intent to supply testing plates; NeuroScience would pay invoices at 50% of client price.
- The letter provided 180-day duration with an option to extend; payments were based on NeuroScience's monthly sales, and no past-due amounts were asserted.
- After 180 days, NeuroScience ceased business, prompting Vojdani to sue in federal court for breach of contract (diversity jurisdiction).
- First trial: verdict for NeuroScience on full payment; district court granted a partial new trial to address contract modification; second trial awarded Vojdani $187,000 based on modified-contract theory.
- Second claim (confidentiality): NeuroScience used Vojdani’s testing methods after termination; jury awarded ~$1.165 million, but district court later vacated JMOL on damages, citing lack of a proper damages theory.
- On appeal, the court affirmed, holding the new-trial grant and scope proper; damages for the confidentiality claim were not sustain-able under a reasonable royalty or other presented theory.
- The court concluded Vojdani failed to present a damages theory (e.g., reasonable royalty) to support the confidentiality claim at trial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court abused its discretion granting a partial new trial | Vojdani argues the scope was too broad and misframes modification. | NeuroScience contends the new-trial scope was appropriate to fix flawed verdicts. | No abuse; district court acted within discretion. |
| Whether the contract-modification issue could be heard in the second trial | Waiver under Rule 49(a)(3) prevented re-submission; modification not resolvable in second trial. | District court properly allowed the modification issue given flawed first-trial verdict form. | Courts allowed second-trial consideration of modification; no error. |
| Whether the damages award for breach of confidentiality was properly permissible | Damages arise from continued use of confidential information; reasonable royalty or diverted-trade theories may apply. | No evidence of sales loss; damages not supported by a presented theory. | Damages not sustained; JMOL for NeuroScience affirmed. |
| Whether a reasonable royalty theory was available or properly presented | Judgment could be based on reasonable royalty evidence from the expired letter of intent. | No argument or instructions on reasonable royalty were presented at trial. | Reasonable royalty theory not preserved; cannot support verdict. |
| Whether the district court correctly held that a new trial on the modification issue was proper | Modification not properly raised; second trial should not revisit first verdict. | Correcting flawed verdicts permits such scope. | Affirmed; second-trial decision within district court’s discretion. |
Key Cases Cited
- Medcom Holding Co. v. Baxter Travenol Labs., Inc., 106 F.3d 1388 (7th Cir. 1997) (abuse-of-discretion standard for Rule 59(a) new trials; flawed verdict forms)
- Mattson v. Schultz, 145 F.3d 937 (7th Cir. 1998) (ambiguity in special verdicts warrants reversal or new trial)
- Burger v. Int'l Union of Elevator Constructors Local No. 2, 498 F.3d 750 (7th Cir. 2007) (flawed verdict forms may require new damages trial)
- Fort Howard Paper Co. v. Standard Havens, Inc., 901 F.2d 1373 (7th Cir. 1990) (district court may excise confusing verdict questions on its own)
- Pactiv Corp. v. Rupert, 724 F.3d 999 (7th Cir. 2013) (waivers may be excused to allow issues to be addressed with notice)
- Rhone-Poulenc Rorer, Inc. v., 51 F.3d 1293 (7th Cir. 1995) (right to jury trial; issues decided by one jury should not be reconsidered absent errors warranting new trial)
- Celeritas Technologies, Ltd. v. Rockwell Int’l Corp., 150 F.3d 1354 (Fed. Cir. 1998) (reasonable royalty as damages for breach of confidentiality)
- Forest Labs., Inc. v. Pillsbury Co., 452 F.2d 621 (7th Cir. 1971) (standard for reasonable royalty and damages in confidential information cases)
- U.S. Naval Inst. v. Charter Communications, Inc., 936 F.2d 692 (2d Cir. 1991) (loss measure considerations in damages; competition context)