331 F. Supp. 3d 977
N.D. Cal.2018Background
- BladeRoom Group Ltd. and Bripco (UK) Ltd. sued Emerson Electric Co., Emerson Network Power Solutions, Inc., and Liebert Corporation for trade secret misappropriation and breach of contract; a jury awarded BladeRoom $10M lost profits and $20M unjust enrichment and found willful and malicious misappropriation.
- Emerson moved for judgment as a matter of law under Rule 50(b) challenging the sufficiency of evidence on ownership, misappropriation, causation, willfulness, damages, and standing.
- BladeRoom relied primarily on fact-witness testimony (CEO Paul Rogers and director Barnaby Smith), contractual documents, emails, meeting notes, and communications between Facebook, BladeRoom, and Emerson to prove ownership, secrecy measures, disclosure, and Emerson’s ensuing design and patent activity.
- Key factual threads: Emerson teams met BladeRoom in the U.K.; Facebook and Emerson exchanged information and ran a "design charrette" where BladeRoom materials were discussed; Emerson later developed Lulea 2 and filed patents covering aspects of the design.
- The court evaluated whether expert testimony was required, whether circumstantial evidence supported misappropriation and causation, and whether damages (including unjust enrichment tied to the sale of Emerson Network Power) were supported by the record.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Need for expert testimony to prove trade secret ownership | BladeRoom: fact witnesses and documents suffice; info not beyond lay understanding | Emerson: trade secrets and comparisons were technical and required experts | Held: No per se expert requirement; jury could rely on lay testimony and documents; ownership supported by substantial evidence |
| Proof of misappropriation (disclosure/use; improper means) | BladeRoom: contractual duty, meetings, emails, notes, and Emerson patents show disclosure and subsequent use | Emerson: needed expert comparison to show use/substantial derivation; evidence insufficient | Held: Circumstantial evidence and documents permitted finding of disclosure and substantial derivation without expert testimony |
| Causation for lost contract (Lulea 2) | BladeRoom: Emerson’s conduct was a substantial factor in denying BladeRoom the contract; only two bidders; evidence showed Emerson would not have competed without BladeRoom info | Emerson: BladeRoom had to prove it would have obtained the contract absent misappropriation | Held: Substantial-factor causation standard met by jury; BladeRoom need not prove inevitable contract award |
| Damages and unjust enrichment (apportionment/speculation/double recovery) | BladeRoom: evidence supported lost profits and unjust enrichment; sale proceeds of Emerson Network Power could be disgorged as unjust enrichment | Emerson: damages speculative, required apportionment among trade secrets, and unjust enrichment may double-count or be improper | Held: Jury awards supported by substantial evidence; no legal requirement to apportion among asserted trade secrets; Emerson failed to show double recovery or speculative basis mandating JMOL |
Key Cases Cited
- Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133 (2000) (standard for judgment as a matter of law and limits on weighing credibility)
- Costa v. Desert Palace, Inc., 299 F.3d 838 (9th Cir. 2002) (high hurdle for overturning jury verdict under Rule 50)
- Estate of Diaz v. City of Anaheim, 840 F.3d 592 (9th Cir. 2016) (JMOL standard—evidence construed in favor of nonmovant)
- Cytodyn, Inc. v. Amerimmune Pharms., Inc., 160 Cal. App. 4th 288 (Cal. Ct. App. 2008) (elements of a CUTSA claim)
- Silvaco Data Sys. v. Intel Corp., 184 Cal. App. 4th 210 (Cal. Ct. App. 2010) (misappropriation may be acquisition, disclosure, or use)
- Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1974) (trade secret protection does not require novelty like patents)
- Sargent Fletcher, Inc. v. Able Corp., 110 Cal. App. 4th 1658 (Cal. Ct. App. 2003) (secrecy element and burden-shifting once prima facie case is made)