721 S.E.2d 508
Va.2012Background
- GSI subcontracted geonames work to prime contractors including Boeing, generating large data sets for maps and a publicly accessible Geographic Names Data Base.
- GSI developed a proprietary process (GNP) with RL, QC, and QA steps, plus QC and edge-matching tools to ensure data accuracy and secrecy.
- Collelo, hired by GSI in 2006, signed an agreement incorporating Addendum B with non-disclosure and one-year non-solicit restrictions.
- Collelo resigned in 2008 for a Boeing non-geonames role; GSI alleged he violated Addendum B by assisting Boeing and disclosing confidential information.
- GSI sued Boeing, Autometric, and Collelo for breach of contract, trade secrets misappropriation under the Virginia Trade Secrets Act, and tortious interference.
- Trial evidence included expert testimony on damages; the defendants moved to strike, and the court dismissed all claims, including trade secrets, with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Trade Secrets Act damages standard | GSI argues damages may be proven by actual loss, unjust enrichment, or reasonable royalties without requiring competition. | Defendants contend no damages under misappropriation since Boeing did not compete for GSI’s geonames work. | Court held that the trial court erred; damages may be considered under the Act. |
| Sufficiency of damages evidence under the Trade Secrets Act | GSI offered expert testimony on misappropriation damages (actual loss, unjust enrichment, royalties). | Defendants argue the evidence failed to prove damages with reasonable certainty. | Court held the trial court erred in striking but upheld limited review; remanded for proper consideration of damages. |
| Breach of contract and tortious interference claims | GSI claimed Collelo’s conflicting services and disclosures breached the contract and aided interference by others. | Defendants asserted insufficient damages and that evidence did not support contract/ interference claims. | Court affirmed dismissal of these claims. |
| Attorneys’ fees—which fee provision governs | GSI sought fees under the Employment Agreement (Section 5.8). | Collelo argued Addendum B’s Section 10.2 governs; two fee provisions apply to two documents within the contract. | Court held fee provisions apply to their respective documents; Collelo cannot recover under Addendum B. |
| Judicial estoppel/positional consistency on fees | GSI’s earlier position on fees did not bar later arguments. | Collelo claimed inconsistent positions barred recovery. | Court found no reversible estoppel; the later position was not improper. |
Key Cases Cited
- Banks v. Mario Indus. of Va., Inc., 274 Va. 438 (2007) (damages under Trade Secrets Act require reasonable certainty for article of damages)
- Saks Fifth Ave., Inc. v. James, Ltd., 272 Va. 177 (2006) (damages must be proven with reasonable certainty; framework for reviewing damages evidence)
- Sunrise Continuing Care, LLC v. Wright, 277 Va. 148 (2009) (proof of damages element in contract cases requires reasonable certainty)
- Conyers v. Martial Arts World of Richmond, Inc., 273 Va. 96 (2007) (statutory interpretation standard; plain meaning governs)
- DHA, Inc. v. Leydig, 231 Va. 138 (1986) (courts may grant motion to strike on grounds raised by court sua sponte)