ClearOne Communications, Inc. v. Biamp Systems
653 F.3d 1163
10th Cir.2011Background
- ClearOne sued Biamp and WideBand over misappropriation of trade secrets related to AEC algorithms and Honeybee code.
- Gentner (later ClearOne) acquired Old ClearOne assets, including Honeybee source and related AEC tech, in 2000 via asset purchase from Old ClearOne.
- Biamp licensed WideBand's AEC technology and later stopped licensing from ClearOne; WideBand marketed FC101/WC301 derived AEC software.
- Jury found willful and malicious misappropriation; damages included lost profits and unjust enrichment; district court awarded exemplary damages and attorney fees.
- District court split damages among defendants, concluded joint and several liability for lost profits, and later entered final judgment with specific amounts.
- Biamp appealed on multiple grounds including dismissal ruling, expert testimony admission, judgment amendments, exemplary damages, and fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was Biamp properly appealing the Rule 12(b)(6) denial after trial? | Biamp seeks review of denial despite trial victory. | denial not reviewable; should pursue judgment as a matter of law | Generally not appealable; reversed on this point to the extent discussed but moot for the other issues |
| Was Knudsen's trial testimony admissible under Rule 26/37? | late disclosure justified; discovery disputes warranted | Rule 26(a) violation; prejudice | The district court did not abuse discretion; testimony admissible under Jacobsen factors |
| Did the district court err in denying Biamp's Rule 59(e) motion to amend the final judgment on damages? | judgment should reflect total damages and avoid duplicative awards | no error; damages properly calculated | Remand guidance issued; not an abuse of discretion |
| Was the exemplary damages award supported by substantial evidence? | willful/malicious conduct shown by misappropriation | insufficient evidence and improper standard | Appellate review precluded due to Rule 50(a) defect; substantial evidence not reviewed here |
| Was attorney's fees awarded under UUTSA proper and was joint/several liability appropriate? | fees justified for willful/malicious misappropriation; shared burden across defendants | ULRA prohibits joint/several; due process concerns | Fees affirmed as compensatory; ULRA issue waived; joint/several liability not reversed on merits |
Key Cases Cited
- Whalen v. Unit Rig, Inc., 974 F.2d 1248 (10th Cir. 1992) (summary judgment denial appeal not appropriate after trial)
- Bennett v. Pippin, 74 F.3d 578 (5th Cir. 1996) (post-trial review limits on Rule 12(b)(6) denials)
- Haberman v. Hartford Ins. Grp., 443 F.3d 1257 (10th Cir. 2006) (exception to Whalen for appeal when pure legal questions are involved)
- Jacobsen v. Deseret Book Co., 287 F.3d 936 (10th Cir. 2002) (Jacobsen factors forRule 37/26 admissibility and harmless error)
- Bell v. Mickelsen, 710 F.2d 611 (10th Cir. 1983) (apportionment of damages and ambiguity in verdicts)
- E.E.O.C. v. Massey Yardley Chrysler Plymouth, Inc., 117 F.3d 1244 (11th Cir. 1997) (seventh amendment considerations in additur contexts)
- Palmer v. City of Monticello, 31 F.3d 1499 (10th Cir. 1994) (duty to reconcile jury verdicts to avoid retrial)
- City of Richmond v. Madison Mgmt. Gp., 918 F.2d 438 (4th Cir. 1990) (aggregation of verdicts and potential additur issues)