823 F. Supp. 2d 555
S.D. Tex.2011Background
- Wellogix sued Accenture for misappropriation of trade secrets and TTLA theft relating to Wellogix software and related confidential information.
- The case progressed to a May 2011 trial in the SD Texas after partial summary judgment on April 22, 2011.
- The jury found for Wellogix on both counts, awarding $26,179,725 in compensatory damages and $68,200,000 in exemplary damages.
- Accenture filed Rule 50(b) renewed motions and a Rule 59 motion for a new trial; the court denied JMOL and granted remittitur in part.
- The court held that Wellogix presented legally sufficient evidence of trade secrets, improper acquisition, and use, and upheld substantial damages, but remitted exemplary damages to a maximum of $18.2 million, requiring Wellogix to choose remittitur or a new trial.
- The memorandum justified denying JMOL while granting in part and denying in part the motion for a new trial or remittitur.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of a trade secret | Wellogix showed its source code and software logic as secrets. | Accenture argued secrecy failed because patent/public materials and interfaces were public. | Sufficient evidence supported trade secret existence. |
| Acquisition of trade secret | Accenture obtained trade secrets via confidential relationships and access to SharePoint and projects. | Accenture lacked access to source code and confidential materials. | Evidence supported improper acquisition. |
| Use of trade secret in projects | Accenture used Wellogix’s trade secrets to develop templates and SAP enhancements (BP P2P, xIEP, SRM). | No direct misuse of Wellogix’s confidential information in argued contexts. | Sufficient evidence supported use of trade secrets. |
| Damages and causation | Loss of business value due to misappropriation justifies compensatory damages including lost value. | Mitigated damages/confounding factors questioned existence/amount. | Sufficient evidence to support compensatory damages based on lost business value. |
| Exemplary damages and malice | Accenture acted with malice and intended substantial harm to Wellogix. | Arguments insufficient to constitute constitutionally permissible punitive damages. | Court upheld exemplary damages as not grossly excessive; later remittitur limited. |
Key Cases Cited
- Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133 (U.S. 2000) (evaluate JMOL with full trial record; credibility not decided by court)
- Boeing Co. v. Shipman, 411 F.2d 365 (5th Cir.1969) (prototype standard for directed verdict; later overruling in part by Gautreaux)
- Gore v. BMW of N. Am., 517 U.S. 559 (U.S. 1996) (three-factor test for punitive damages; reprehensibility central)
- State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (U.S. 2003) (limits and considerations for punitive damages; ratio guidance)
- Taco Cabana Int'l v. Two Pesos, Inc., 932 F.2d 1113 (5th Cir.1991) (secrecy disclosing without confidentiality can affect protection; context matters)
- In re Bass, 113 S.W.3d 735 (Tex.2003) (six-factor test for trade secret existence)
- Phillips v. Frey, 20 F.3d 623 (5th Cir.1994) (foundational Texas misappropriation standards)