225 Cal. App. 4th 786
Cal. Ct. App.2014Background
- Grail sues Mitsubishi for breach of an NDA related to Grail’s confidential inductive storage technology after a 2001 meeting where Mitsubishi reps signed an NDA.
- Stern and Grail disclosed confidential information to Mitsubishi during early 2001 meetings; Grail alleges Mitsubishi learned Grail’s confidential information in breach of the NDA.
- Renesas later publicized memory technologies (SuperSRAM and MONOS) that Grail claims incorporate Grail’s technology, allegedly using disclosed confidential information.
- A 2012 jury found Mitsubishi breached the NDA and awarded damages of $123,898,889; prejudgment interest and injunctive relief were sought but the trial court granted a new trial on damages due to the wrong damages measure.
- Grail sought injunctive relief; the trial court denied it; Mitsubishi challenged evidentiary rulings on two Renesas website documents (PTX-19/PTX-20) admitted as business records; the court held the documents admissible and not prejudicial.
- The appellate court affirmed, concluding the damages measure warranted a new trial and that the challenged evidence did not require reversal; Grail’s injunction request was denied because damages were adequate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the proper remedy was JNOV or a new trial on damages | Grail argues JNOV appropriate only if no damages proven. | Mitsubishi asserts JNOV appropriate due to insufficient damages proof. | New trial on damages proper; evidence supported breach but wrong damages measure used. |
| Whether PTX-19/PTX-20 were admissible as business records | PTX-19/PTX-20 admissible to prove MONOS inductor claim. | Documents were hearsay; improper without proper foundation. | Admissible as business records; no prejudice shown. |
| Whether admission of PTX-19/PTX-20 prejudiced liability | Exhibits essential to Grail’s case; corroborated MONOS inductor claim. | Prejudicial error, could have changed outcome. | No prejudice; substantial other evidence supported liability. |
| Whether Grail was entitled to injunctive relief for breach of NDA | NDA provides for injunctive relief; irreparable harm shown. | Damages adequate; no irreparable harm shown. | Injunctive relief denied; damages adequate and can be redressed by monetary relief. |
Key Cases Cited
- Ajaxo Inc. v. E*Trade Group, Inc., 135 Cal.App.4th 21 (Cal. Ct. App. 2005) (proper measure of damages for misappropriation under NDA may be value to defendant, not total value to plaintiff)
- Ajaxo Inc. v. E*Trade Group, Inc., 187 Cal.App.4th 1295 (Cal. Ct. App. 2010) (reaffirms reasonable royalty approach where applicable)
- Celeritas Technologies, Ltd. v. Rockwell Intern. Corp., 150 F.3d 1354 (Fed. Cir. 1998) (license-based damages; reasonable royalty approach in NDA context)
- Sweatman v. Department of Veterans Affairs, 25 Cal.4th 62 (Cal. 2001) (standard for JNOV and sufficiency of evidence in civil cases)
- Kaleidescape, Inc. v. DVD Copy Control Ass’n, Inc., 176 Cal.App.4th 697 (Cal. Ct. App. 2009) (injunction standard; irreparable harm requires inadequate legal remedy)