MicroStrategy and Business Objects are competitors in the field of business intelligence software. MicroStrategy initially sued Business Objects, S.A., a French corporation, and Business Objects Americas, Inc. (collectively Business Objects), its wholly-owned American subsidiary, in the United States District Court for the Eastern District of Virginia for infringement of MicroStrategy’s U.S. Patent No. 6,260,050 (the ’050 patent) and U.S. Patent No. 6,270,033 (the ’033 patent). MicroStrategy later amended its complaint to add four business tort claims stemming from the hiring of several MicroStrategy employees by Business Objects. Although a trial took place on some claims, the district court ultimately disposed of both the patent claims and business tort claims without a jury verdict. For separate reasons on each issue, this court affirms the district court on all matters, except one. Because the district court erroneously determined that Virginia law would not acknowledge MicroStrategy’s contractual non-solicitation clause, this court reverses on that issue and remands for further proceedings consistent with this opinion.
I.
This court reviews the grant or denial of a motion for judgment as a matter of law (JMOL) “under the law of the regional circuit where the appeal from the district court normally would lie.”
Riverwood Int’l Corp. v. R.A. Jones & Co.,
This court reviews the district court’s grant or denial of summary judgment under the law of the regional circuit.
Chamberlain Group, Inc. v. Skylink Techs., Inc.,
This court reviews a district court’s evidentiary rulings under the law of the regional circuit.
Sulzer Textil A.G. v. Picanol N.V.,
II.
With respect to the patent claims, MicroStrategy voluntarily dismissed its infringement claim on the ’030 patent before trial. On the ’050 patent, however, the district court granted summary judgment of non-infringement in favor of Business Objects. The district court reached this result after interpreting the claims to require an association of output devices with a “device-specific style” on a deviee-by-device basis.
See MicroStrategy, Inc. v. Business Objects, S.A.,
The ’050 patent is directed at a system and method for automatic broadcasting of information to multiple types of subscriber output devices and formatting output for those devices using configurable parameters. ’050 patent, col. 1, ll. 26-32. The invention allows companies to access and mine enormous volumes of data generated by their business operations. The ’050 patent gives some idea of the problems addressed by the invention:
The availability of large volumes of data presents various challenges. One challenge is to avoid inundating an individual with unnecessary information. Another challenge is to ensure all relevant information is available in a timely manner.
’050 patent, col. 1, ll. 39-44. The ’050 patent further specifies that the data must be available to “multiple types of subscriber output devices, including electronic mail, personal digital assistants (PDA), pagers, facsimiles, printers, mobile phones, and telephones.” Id., col. 1, ll. 28-31. The parties dispute whether, as claimed, the system and method must associate these various output devices with a “device-specific style” on a device-by-device basis. Moreover if each device — printer, pager, etc. — requires its own presentation style, this requirement suggests that the invention also requires support for multiple types of output devices. Claim 8 is representative of the disputed language; it reads:
8. A method for generating output from an on-line analytical processing *1350 system to user output devices comprising the steps of:
processing at least one scheduled service in an on-line analytical processing system according to a schedule established for the service and generating a service output, each service comprising at least one query to be performed by the online analytical processing system and at least one user device subscribed to that service;
enabling a plurality of subscribers to subscribe to the scheduled service and enabling the subscriber to specify at least one user output device at which to receive service outputs from the service; wherein each user device subscribed to that service is associated with a device-specific style that designates the format in which that particular type of user device is to output to the service outputs to a user to maintain the integrity of the service outputs;
determining whether to forward the generated output to one or more user devices based on output conditions specified for each user device subscribed to the service;
creating a device-speciñc formatted output for each user device subscribed to the service selected to receive the output according to a selection of predefined values specified for each of a plurality of predefined parameters provided by the style specified for the user output device, and
automatically forwarding a device-specific formatted service output to each of the user output devices selected to receive the output for that service;
wherein the determining step comprises determining whether each user device subscribed to the service is an alert subscription or a periodic subscription and selecting the user device if it is a periodic subscription or if an alert condition specified in the alert subscription has been satisfied.
Id., col. 18, 1. 51-col. 19, 1. 21 (emphases added).
The district court first construed the term “device-specific style” during a Mark-man proceeding. During that proceeding, MicroStrategy argued that the term meant “[o]ne or more parameters that designate the format in which a particular type of output device receives service outputs.” After a careful review of the claim language and relevant statements in the specification and file wrapper, the district court largely adopted MicroStrategy’s proposed definition. Thus, the district court construed “device-specific style” to mean “[t]he format in which a particular type of output device receives and displays service output, consisting of values of a plurality of parameters.” MicroStrategy, Inc. v. Business Objects, S.A., Civil Action No. 2:01cv826, slip op. at 27 (E.D.Va. Mar. 18, 2004) (Claim Construction Order).
The district court construed the remaining claim language on summary judgment.
Patent Judgment,
[T]he patent covers methods and systems that retain associations between individual devices and device styles ... because only in that manner does the patent cover systems that handle multiple device types or customization of subscription features on a subscriber-by-subscriber or device-by-device basis.... While it is not necessary that the devices always be different, the system or method described in the claims is structured to facilitate the transmission of the same output to multiple device types.
Id. at 442-43.
This court recently restated: “It is a ‘bedrock principle’ of patent law that ‘the claims of a patent define the invention to which the patentee is entitled the right to exclude.’ ”
Phillips v. AWH Corp.,
All three of the ’050 patent’s independent claims recite the term “device-specific style.” As previously noted, the district court construed this term as part of its Markman proceedings to mean “[t]he format in which a particular type of output device receives and displays service output, consisting of values for a plurality of parameters.” Claim Construction Order, slip op. at 27. This construction accurately reflects the claim language and the context supplied by the specification. See ’050 patent, col. 4, ll. 49-63.
While accepting the district court’s Markman construction, the parties dispute its meaning. MicroStrategy argues that this Markman construction and the context of the invention do not require support for more than one type of output device. In particular, MicroStrategy notes that the specification contemplates a system with “one or more” output devices. See id., col. 5, ll. 4-6. Thus, MicroStrategy reads the claim and the district court’s Markman construction to permit a system with support for just one type of user device.
To the contrary, as noted in the district court’s summary judgment order, all three independent claims require that each user output device subscribed to a service be associated with a device-specific style. See id., col. 17, ll. 58-62; col. 18, 1. 65-col. 19, 1.2; col. 20, ll. 21-25. The term “associated” implies that the system creates a link between user output devices and corresponding “styles.” In other words, the system must identify and track in some manner the “style” in which a particular user output device receives and displays output. This claim language further requires a direct link between each user output device, individually, and a corresponding “device-specific” style.
In addition, the claims require a device-specific formatted output according to a style specified for each device. See id., col. 17,1. 66-col. 18,1. 10; col. 19, ll. 6-11; col. 20, 11. 30-35. As noted by the district court, the words “specified” and “each” reaffirm that these claims require individual, device-by-device association. Moreover, the ultimate creation of a “device-specific” format requires at least two different device-specific styles. Otherwise, the references in the claims to individualized, device-by-device association of styles with user output devices and correspond *1352 ing creation of a device-specific formatted output would be meaningless.
The specification supports this construction as well. The specification reads:
According to one embodiment of the present invention, a system for automatically generating output from an on-line analytical processing system based on scheduled services specified by subscribers of the system is provided. The system processes scheduled services in an on-line analytical processing system with each service comprising at least one query to be performed by the on-line analytical processing system. The system then automatically forwards output from the services to one or more subscriber output devices specified for that service. Users may define new services, including the schedule of the services and the type, such as alert services or scheduled services, and may also subscribe to the services provided by the system.... The output devices the system may forward output to may comprise electronic mailbox, facsimile, printer, mobile phone, telephone, pager, PDA or web pages.
Id., col. 4, 1. 64-col. 5, 1. 22 (emphases added).
While this paragraph does state the system may ultimately forward output to only “one” output device, it does not address at all a minimum capacity to support a number of output formats (e.g., only one). Instead, this paragraph is open to an interpretation requiring support for multiple types of subscriber output devices,
see id.,
col. 5, 11. 19-22, even though, in practice, all the subscribers may receive their subscription via only one format (e.g., e-mail or another suitable format). Therefore, this paragraph does not conflict with a claim construction requiring support for multiple device types or an association of styles with devices on an individual, device-by-device basis. The district court read the specification correctly in its well-reasoned decision.
See Patent Judgment,
The district court then turned correctly to analyze Business Object’s accused product, i.e. the Broadcast Agent Publisher (Publisher). “[I]nfringement is assessed by comparing the accused device to the claims!;] the accused device infringes if it incorporates every limitation of a claim, either literally or under the doctrine of equivalents.”
Nazomi Commc’ns, Inc. v. Arm Holdings, PLC,
In this case, the district court concluded that Publisher does not contain each of the limitations of the asserted claims:
In Publisher, users are subscribed to “publications,” which are similar to [the] services [disclosed in the ’050 patent], A publication is a “broadcast” of information to a group of “recipients.” The creator of the publication determines who is a recipient of the publication and when it is sent. The publication sent to a recipient is simply information obtained through a query or queries on a database. The Publisher software is only designed to be run with email. In other words, the recipient output device is simply an email address. There are, however, several different formatting options for such email, depending upon the type of email server employed.
*1353
See Patent Judgment,
The district court further determined that MicroStrategy could not “rely on the doctrine of equivalents to prove infringement” because MicroStrategy’s expert “failed to [opine] in a sufficient manner regarding the doctrine of equivalents.”
Id.
at 445 (citing
Zelinski v. Brunswick Corp.,
In brief, the district court properly construed the disputed claim terms and properly concluded that Business Object’s Publisher product cannot infringe. Accordingly this court affirms the district court’s grant of summary judgment of non-infringement.
III.
On MicroStrategy’s four business tort claims, the district court disposed of much of the dispute with various evidentiary rulings that excluded MicroStrategy’s evidence on damages and causation. Mi-croStrategy’s tort case relied heavily on the presentation of its damages expert, David E. Yurkerwieh, 1 and his three expert reports (collectively referred to as “the expert reports”). These three expert reports, however, were excluded primarily due to a flawed methodology that rendered them speculative and unreliable. MicroS-trategy’s tort case also relied on non-expert damage theories that were excluded due to a failure to timely supplement discovery interrogatories. As discussed below, the district court did not abuse its discretion in making these evidentiary rulings.
The district court first excluded Yurker-wieh’s initial expert report, dated July 17, 2002, due to the use of a flawed methodology. The district court found that the initial expert report did not consider relevant factors in its damages analysis, and did not link any single instance of misconduct to a specific amount of damages. MicroStrategy, Inc. v. Business Objects, S.A., Civil Action No. 2:01cv826, slip op. at 5-9 (E.D.Va. Dec. 2, 2002) (Exclusion Order). While Yurkerwieh later attempted to supplement that initial expert report, the district court excluded the additional information as well because it contained the same flawed methodology. Moreover, the “supplement” contained new opinions and doubled the amount of damages, which prevented it from filling the role of a true supplement to a previously filed report. Thus, Yurkerwich’s second expert report was untimely, having been filed in violation of the district court’s scheduling order and not being a true supplement to the initial report. Id., slip op. at 14-19. Finally, the district court refused to allow MicroStrategy to submit a third expert report (the *1354 “revised” report) because, yet again, it contained the same flawed methodology as the initial expert report and the supplement, and because it was filed in violation of the district court’s scheduling order. Id., slip op. at 19-21. Without reports to support any testimony, the district court refused to allow Yurkerwich to testify at trial. These evidentiary rulings (collectively referred to as “the expert rulings”) left MicroStrategy with little evidence of damages or causation.
These expert rulings alone, however, do not tell the complete story. Rather, at trial, the district court also prevented MicroStrategy from introducing its non-expert damages theories because MicroS-trategy had not supplemented discovery interrogatories. The combined effect of the expert rulings and the exclusion of MicroStrategy’s non-expert damages theories left MicroStrategy with little or no evidence of damages or causation.
A brief summary of MicroStrategy’s financial problems sets the scene for review of the district court’s exclusion orders. During the “dot com” bubble burst of the late 1990s, MicroStrategy began to suffer severe financial problems. A major accounting error, however, exacerbated Mi-croStrategy’s problems and required a downward readjustment of its 1997, 1998, and 1999 earnings reports. Exclusion Order, slip op. at 2. In the aftermath, MicroStrategy’s stock plummeted 62% in one day, eventually falling from a high of $313 per share to a low of 49 cents per share. The company also faced a U.S. Securities & Exchange Commission (SEC) investigation and a series of class action law suits. Id. As MicroStrategy fought to remain solvent, it laid off two thirds of its workforce and cut its sales and marketing budget in half. Id. MicroStrategy’s chief executive officer (CEO) summed up this period in three words: “It was painful.”
With this backdrop, the district court properly identified the shortcomings in Mi-croStrategy’s expert reports. Confronted first with the initial expert report, the district court properly concluded that, despite the rather obvious role that MicroS-trategy’s financial instability played in the company’s ongoing struggles, Yurkerwich attributed all of the company’s post 2000 losses solely to the alleged tortious conduct by Business Objects. No wonder that the district court found that the expert report did not link a single misconduct to a specific injury. See Tr. of Pending Mot., No. 2:01cv826 at 43 (E.D.Va. Sept. 19, 2002). 2
MicroStrategy claims that Yurkerwich accounted for these grave market setbacks by selecting the year 2000 as his baseline. However, while the last year of the downward adjustment of income was indeed 1999, Yurkerwich provided no basis for assuming that all of MicroStrate-gy’s financial struggles and corporate restructuring, which were far reaching in scope and breadth, had no lingering effects beyond 1999. The record contained no indication that these economic setbacks had no effect in 2000 and thereafter. Moreover, even if those set-backs could be contained in the period prior to 2000, Yurkerwich’s report also did not account for several other major factors, such as the introduction of new products by Business Objects. In brief, Yurkerwich’s report ignored any significant factor that might have attributed MieroStrategy’s difficulties to factors other than the torts. *1355 Thus, the district court properly perceived that Yurkerwich’s report did not accurately link the alleged damages to the torts. Instead the record suggests that other market factors caused most, if not all, of the damage to MicroStrategy, which highlights the need for reliable proof of the specific amount attributable to the alleged tortious acts.
In the direct, but supportable, terms of the district court, “[t]his report does not pass the red face test. It does not pass the Daubert test. It does not pass the Rule 702 test.... I read the report before I read any of the briefs, and I, frankly, was appalled at it.” Id. Exercising its gatekeeper role, the district court properly excluded the initial expert report on this basis. Exclusion Order, slip op. at 8.
The rule in the Fourth Circuit that an expert need not consider every possible factor in rendering an opinion does not provide a basis for finding that the district court abused its discretion in excluding the initial expert report.
See Westberry v. Gislaved Gummi AB,
This pre-admission determination (i.e., whether or not
enough
factors have been considered to make an expert report
sufficiently
reliable) is committed to the sound discretion of the district court,
not
the jury.
See Hammoud,
In this case, the record shows that the excluded expert report did not link a single loss to a specific misconduct and ignored significant factors that might have excluded the torts as the reason for the losses. For these reasons, the district court was well within its discretion to exclude it.
As to the supplement and revised report, the district court also excluded these reports because they both suffered from the same flawed methodology as the initial expert report. See Exclusion Order, slip op. at 18-19, 21. While challenging those flaws, MicroStrategy admits that the supplemental and revised reports use the same basic methodology and base data as the initial July Report. See id., slip op. at 21. Because this court affirms the district court’s exclusion of the initial report due to^ its flawed methodology, this court affirms the district court’s exclusion of the supplemental and revised reports as well. This court need not address whether the supplement or revised report were timely filed.
The district court also acted within its discretion in preventing Yurkerwich from testifying at trial. See id., slip op. at 9-12. Specifically, Rule 702 of the Federal Rules of Evidence allows for the testimony of an expert witness if:
(1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.
Fed.R.Evid. 702 (effective Dec. 1, 2000). In this case, the district court determined that Rule 702 was not satisfied, in part, because Yurkerwich’s principles and methods, as disclosed in his three expert reports, were speculative and unreliable. For this reason alone, the district court was well within its discretion to prevent Yurkerwich from testifying.
This court is aware of the Fourth Circuit’s rule in
Southern States Rack & Fixture, Inc. v. Sherwin-Williams Co.,
The district court also acted within its discretion in excluding MicroStrategy’s non-expert damages theories for failure to supplement discovery interrogatories. Specifically, during the discovery process, Business Objects served an interrogatory on MicroStrategy that required MicroStrategy to identify its damages theories and the factual basis and methodology for its calculations. At trial, MicroStrategy sought to introduce evidence of damages not disclosed in response to that interrogatory. Therefore, the district court excluded the evidence under Rule 37(c)(1) of the Federal Rules of Civil Procedure.
MicroStrategy now presents three arguments as to why the district court abused its discretion in excluding its non-expert damages theories: (1) a supplemental interrogatory response filed on Oct. 7, 2002 sufficiently disclosed the new damage theories; (2) even if the Oct. 7, 2002 supplement did not sufficiently disclose it, the evidence should not have been excluded *1357 under the Southern States exclusion test; and (3) Business Objects did not properly object to introduction of the evidence when it was introduced. Not one of these theories is persuasive.
MicroStrategy’s first argument directly contradicts statements made at trial, acknowledging no supplements incorporating the non-expert damages evidence were ever filed. Specifically, MicroStrategy sought to excuse its failure to supplement because they had relied on their expert report which the district court excluded on the eve of trial and left no time to supplement the interrogatory responses again:
THE COURT: You made reference to the [expert] report ... which is no longer relevant to this particular case
Mr. MOLL: Hm-hmm
THE COURT: You never supplemented your answers
Mr. MOLL: No, we didn’t, because again, the procedural posture of this was, the [expert] report had been submitted at the time
Based on this exchange (and others in the record), this court must acknowledge Mi-croStrategy’s repeated admissions that it did not properly supplement their answers to Business Objects’ discovery interrogatories.
As to MicroStrategy’s second argument, under the Fourth Circuit’s Southern States test, the trial court applies a five-factor test to justify harmless nondisclosure of evidence:
(1) the surprise to the party against whom the witness was to have testified;
(2) the ability of the party to cure that surprise; (3) the extent to which allowing the testimony would disrupt the trial; (4) the explanation for the party’s failure to name the witness before trial; and (5) the importance of the testimony.
Southern States,
Finally, the record shows that Business Objects properly objected to introduction of the evidence:
THE COURT: Aren’t we really getting to one of the main issues in this case, as to whether or not you all frankly have answered interrogatories appropriately so that there would be any element of damages in this particular case?
THE COURT: I mean I’m really, really concerned about it. I haven’t seen a brief yet from you either.
MR. MOLL: Your Honor, I have—
THE COURT: In response to [Business Object’s] brief.
MR. MOLL: I apologize for that. I have four people here—
THE COURT: I understand that.
MR. MOLL: — I have people that were up all night trying to do things and *1358 have things right, and I apologize that it wasn’t ready.
As demonstrated by these transcripts, Business Objects objected in understandable terms to the introduction of this evidence and even filed a brief to protest introduction of the new damage theories before trial. Thus, this court rejects Mi-croStrategy’s third argument as well.
In sum, this court perceives no abuse of discretion in the district court’s exclusion of MicroStrategy’s expert reports and expert testimony. Nor does this court perceive an abuse.of discretion in the district court’s exclusion of MicroStrategy’s additional non-expert damage theories. Thus, the district court’s evidentiary rulings must be affirmed.
IV.
Turning now to the merits of MicroStrategy’s four business tort claims, MicroS-trategy’s first business tort claim involves misappropriation of trade secrets. The district court tried this issue without a jury. The district court examined eighteen instances where Business Objects had received MieroStrategy information, and determined that only two actually involved misappropriation of trade secrets.
MicroStrategy, Inc. v. Business Objects, S.A.,
The district court did not, however, award damages to MieroStrategy because, prior to trial, the district court granted partial summary judgment on damages in favor of Business Objects on the grounds that MieroStrategy did not “show the amount of damages ... sustained with reasonable certainty” or “a causal connection between the damages it suffered and the actions of [Business Objects].” MicroStrategy, Inc. v. Business Objects, S.A., Civil Action No. 2:01cv826, slip op. at 8 (E.D.Va. Dec. 30, 2002) (Partial Summary Judgment Order). MieroStrategy challenges this grant of partial summary judgment on appeal, arguing that the district court improperly excluded its evidence on damages and causation.
Having already concluded in the preceding section that the district court’s eviden-tiary rulings were proper, this court affirms the district court’s related grant of partial summary judgment of damages on this claim to Business Objects. What little evidence the district court did not exclude was simply insufficient to show causation or damages with any reasonable certainty.
V.
MicroStrategy’s second business tort claim, tortious interference with contract, has two aspects. The first aspect involves a non-solicitation clause in MicroStrategy’s employee contract. The district court declared this clause invalid and unenforceable as a matter of Virginia law in a summary judgment order.
See MicroStrategy, Inc. v. Business Objects, S.A.,
The Non-solicitation Clause
The non-solicitation clause in the employee contract reads:
I agree that, for the period of one (1) year after termination of my employment with MicroStrategy for any reason, I will not, directly or indirectly, seek to influence any employees, agents, contractors or customers of MicroStrategy to terminate or modify their relationship with MicroStrategy.
Non-solicitation Judgment,
As a preliminary matter, when a state court has decided a matter of state law, as in the present case, federal courts should pay careful attention to the state court decision.
See Litton Indus. Prod., Inc. v. Solid State Sys., Corp.,
In Virginia, the ambiguity of contract language is a question of law subject to de novo review.
Eure v. Norfolk Shipbuilding & Drydock Corp.,
(1) Is the restraint, from the standpoint of the employer, reasonable in the sense that it is no greater than necessary to protect the employer in some legitimate business interest?; (2) From the standpoint of the employee, is the restraint reasonable in the sense that it is not *1360 unduly harsh and oppressive in curtailing his legitimate efforts to earn a livelihood?; [and] (3) Is the restraint reasonable from the standpoint of a sound public policy?
Id.
(quoting
Alston Studios, Inc. v. Lloyd V. Gress &
Assocs.,
The state court, however, disagreed:
My admiration for the federal court, and Judge Friedman knows no bounds. Of course, this Court’s not constrained by those opinions, and quite frankly, I think Judge Friedman was straining at nats on paragraph five here.
I don’t find the ambiguity that he finds. I certainly agree that all of these cases are fact dependent. But this is a facial attack and I find facially that this does not violate Virginia law. I think it’s not ambiguous.
[The agreement] says [the former employee] will not seek to influence any employees or agents or contracts or customers to terminate or modify their relationship with Microstrategy. I don’t see how it can be much clearer.
State Court Decision, at 18-19.
Upon review of the district court, this court perceives no invalidating ambiguity under Virginia law. The contract is not ambiguous on its face. Rather the language prohibits former employees from taking any action that drives MicroStrate-gy customers away altogether or prompts a MicroStrategy customer to buy less (but still some) from the company. The words “influence,” “modify,” and “relationship” in context convey this meaning. Under the clause, an employee promised to refrain from “influencing” MicroStrategy “employees, agents, contractors, or customers.” The term “influencing” conveys the meaning of altering or affecting the business conduct of the named parties. The term “modify,” particularly when placed next to the words “terminate or,” conveys the concept of altering or affecting business conduct in some way short of complete termination of relationships with MicroStrategy. Finally, the term “relationship” in this context conveys the meaning of business conduct, whether that of an employee, agent, contractor, or customer, as specified earlier in the contractual clause. The court perceives no fatal ambiguity in this broad, but straight-forward terminology. Moreover, the “direct or indirect” clause does not render the claim ambiguous.
See Foti,
In sum, this court concludes that the district court erred in finding the non-solicitation clause invalid and unenforceable as a matter of Virginia law. This court accordingly remands this aspect of the tor-tious interference with contract claim to the district court for further proceedings. This court is aware that MicroStrategy will have difficulty in showing any damages associated with this claim. Nonetheless this court remands to permit the district court to consider this issue further.
The Confidentiality Clause
The confidentiality clause in ML croStrategy’s employee contracts reads:
I agree that I have no right to use for the benefit of myself or anyone other than MicroStrategy, any of the Confi *1361 dential Information of MicroStrategy or MicroStrategy’s Business Partners of which I become informed during my employment, whether or not developed by me. ... Upon termination of my employment, I shall promptly deliver to MicroStrategy all Confidential Information which is in my possession or under my control.
The district court allowed the confidentiality clause claim to go to trial, but, at the close of MicroStrategy’s case in chief, granted JMOL to Business Objects.
Under Virginia law, a party may sue for tortious interference with contract because “the right to performance of a contract and the right to reap profits therefrom are property rights which are entitled to protection in the courts.”
Chaves v. Johnson,
(1) the existence of a valid contractual relationship or business expectancy; (2) knowledge of the relationship or expectancy on the part of the interferor; (3) intentional interference inducing or causing a breach or termination of the relationship or expectancy; and (4) resultant damage to the party whose relationship or expectancy has been disrupted.
Id.
(citing
Calbom v. Knudtzon,
“The proximate cause of an event is that act or omission which, in natural and continuing sequence, unbroken by an efficient intervening cause, produces the event, and without which that event would not have occurred.”
Atkinson v. Scheer,
In this case, the record shows multiple causes of MicroStrategy’s loss of business and Business Objects’ gain in business. Therefore, the district court correctly concluded that MicroStrategy must demonstrate the amount of damages attributable to Business Objects with- reasonable certainty.
See TechDyn Sys. Corp. v. Whittaker Corp.,
MicroStrategy’s evidence at trial emphasized that it suffered a loss in business during the same period that Business Objects obtained new business. From this temporal connection, MicroStrategy wanted the jury to infer that the purported tortious acts by Business Objects were the sole cause of its losses. Accordingly it sought an award of damages for the entire value of the business gained by Business Objects. Yet, the record contradicts this presentation. For example, MicroStrate-gy’s Chief Operating Officer (COO) admitted at trial that the “principal determination or principal criteria [in convincing a new customer to buy software] is does the software actually provide value, does it do what the customer needs it to do technically.” This testimony suggests that Business Objects’ success during this period may have been partly or wholly attributable to its innovative products. In addition, the COO’s testimony further suggests that MicroStrategy’s loss of sales during this period may be attributable in part to the significant financial problems occasioned by its accounting errors. This testimony coupled with other entries in the record show that, as the district court correctly perceived, a reasonable jury would not be able to infer that the torts caused the damage alleged by MieroStra-tegy. The record does not support the vast inference MicroStrategy invited. Of course, this causation problem springs from the exclusion of MicroStrategy’s expert reports and non-expert damages theories. This court has already determined that the district court properly excluded that evidence under Daubert.
In brief, because MicroStrategy had the burden to prove causation and damages by preponderant evidence, this court finds that the district court properly granted JMOL to Business Objects at the close of MicroStrategy’s case in chief.
See Carr v. Citizens Bank & Trust Co.,
VI.
MicroStrategy’s third business tort claim involves violation of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030. The district court dismissed this claim on summary judgment because, again, Mi-croStrategy failed to show the amount of damage it suffered with reasonable certainty or a causal connection between the damages it suffered and the actions of Business Objects. Partial Summary Judgment Order, slip op. at 6. MicroStra-tegy does not challenge this grant of partial summary judgment on appeal. Thus, this court does not address the propriety of this grant.
VII.
MicroStrategy’s final business tort claim involves conspiracy to willfully and maliciously injure MicroStrategy in its trade, business, profession, and reputation *1363 (the conspiracy claim) per Va.Code § 18.2-499. MicroStrategy pled this claim as predicated on a misappropriation of trade secrets. Partial Summary Judgment Order, slip. op. at 10. Because the Virginia Uniform Trade Secrets Act (VUTSA), Va. Code § 59.1-341(A), preempts claims predicated on a misappropriation of trade secrets, the district court granted summary judgment for Business Objects. This court agrees that the VUTSA preempts MicroStrategy’s claim as pled.
The district court’s interpretation of the VUTSA implicates the meaning of the term “other laws” in the preemption clause. Specifically, the VUTSA’s preemption clause reads:
A. Except as provided in subsection B of this section, this chapter displaces conflicting tort, restitutionary, and other law of this Commonwealth providing civil remedies for misappropriation of a trade secret.
B. This chapter does not affect:
1. Contractual remedies whether or not based upon misappropriation of a trade secret; or
2. Other civil remedies that are not based upon misappropriation of a trade secret; or
3. Criminal remedies, whether or not based upon misappropriation of a trade secret.
Va.Code § 59.1-341 (emphasis added). The question before this court is simply whether or not the district court properly concluded that “other law” includes statutory causes of action.
See Partial Summary Judgment Order,
slip op. at 11 (citing
Smithfield Ham & Prods. Co., Inc. v. Portion Pac, Inc.,
“The starting point of every case involving construction of a statute is the language itself.”
Warner-Lambert,
In this case, the VUTSA contains two sections that are to be read together in addressing the extent to which the act preempts other forms of relief. Section A broadly states that, except as provided in subsection B of this section, this chapter displaces conflicting tort, restitutionary, and “other law” of this Commonwealth providing civil remedies for misappropriation of a trade secret. See Va.Code § 59.1-341(A). Section B then proceeds to exclude all contractual and criminal remedies, whether or not based upon misappropriation of a trade secret, and those civil remedies that are not based upon misappropriation of a trade secret. See Va.Code § 59.1-341(B). When read together, sections A and B preempt all claims for relief, including both common law and statutory causes of action, if they provide a civil remedy for misappropriation of trade secrets unless they are contractual or criminal in nature. The district court properly analyzed this language in its opinion. 3
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The district court also properly concluded that the preemption clause barred MicroStrategy’s claim as pled. Specifically, MicroStrategy argued that even if the VUTSA preempts statutory causes of action based upon misappropriation of trade secrets, courts have allowed parties to proceed with alternative claims until and unless the court can determine whether or not the facts demonstrate that misappropriation of trade secrets actually occurred.
See Stone Castle Fin., Inc. v. Friedman, Billings, Ramsey & Co.,
VIII.
In conclusion, because the district court properly disposed of the patent claim, the misappropriation of trade secrets claim, and the conspiracy claim, this court affirms those decisions. However, because the district court improperly determined that the non-solicitation clause was invalid and unenforceable as a matter of Virginia law, this court remands one aspect of the tortious interference with contract claim for further proceedings.
COSTS
Each party shall bear its own costs.
AFFIRMED IN PART, REVERSED IN PART, and REMANDED.
Notes
. According to Yurkerwich's initial expert report, he is a managing director and chairman of InteCap, Inc., an international consulting firm related to intellectual property and complex commercial disputes.
. The evidentiary rulings initially were ordered by Magistrate Judge Tommy E. Miller, who presided over various portions of the trial below. All of Judge Miller's rulings were upheld by District Court Judge Friedman on appeal. Thus, the rulings of both Judge Miller and Judge Friedman are collectively referred to as “the district court’s rulings” for purposes of this opinion.
. Contrary to this court's holding, one state court has held that the VUTSA does not preempt a statutory conspiracy claim.
See Lockheed Martin Fed. Sys., Inc. v. Cincinnati
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Bell Info. Sys., Inc.,