Tag Archives: Microsoft

Sixth District Holds That Reasonable Royalties Available When a Defendant Has Not Realized a Profit or Other Calculable Benefit

E-Trade
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Today, in Ajaxo Inc. v. E*Trade Financial Corporation, — Cal.Rptr.3d —-, H033631, 2010 WL 3386479 (Cal. Ct. App. 6th Dist. Aug. 30, 2010), the Sixth District held that where a defendant has not realized a profit or other calculable benefit as a result of his or her misappropriation of a trade secret, unjust enrichment is not provable within the meaning of section 3426.3(b). Thus, the trial court had discretion pursuant to section 3426.3(b) to order payment of a reasonable royalty.

Plaintiff Ajaxo Inc. (Ajaxo), sued defendant E*Trade Financial Corporation (E*Trade) for misappropriation of trade secrets under the California Uniform Trade Secret Act.  E*Trade was found liable in a prior jury trial, where a jury determined that E*Trade had willfully and maliciously misappropriated Ajaxo’s trade secrets.  Id. *1.  A second trial determined the extent to which E*Trade had been unjustly enriched by its misappropriation.  Id. Continue reading

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Central District Approves $4,385,000 and 30% Attorney Fee Award in Class Settlement of Cicero v. DirecTV, Inc.

A standard DirecTV satellite dish with Dual LN...
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Judge Avern Cohn of the Central District of California approved a wage and hour class settlement in Cicero v. DirecTV, Inc., 2010 WL 2991486 (C.D. Cal. July 27, 2010) (not reported).  Judge Cohn approved a payout fund to class members of $4,385,000, a 30% attorney fee award of $1,950,000 to class counsel, and incentive awards of $7,500 and $5,000 the representative plaintiffs.

The class action claimed violations of California’s wage and hour laws.  The named plaintiffs are former satellite television installation and service technicians who brought this case individually and on behalf of all other similarly situated current and former satellite installation and/or service technicians against their former employers Mountain Center, Inc., and Ironwood Communications Inc. (currently DirecTV, Inc. doing business as DirecTV Home Services, collectively “Defendant”) for allegedly violating California’s labor and unfair competition laws. Named Plaintiffs alleged that Defendant violated applicable provisions of the Industrial Welfare Commission’s (“the IWC”) Wage Orders, the Labor Code, and the Business and Professions Code by: (1) failing to provide employees duty-free meal periods; (2) failing to reimburse employees for tools necessary to the performance of the employees’ work; (3) failing to pay wages for all hours worked, including hours worked in excess of eight per day and forty per week; (4) failing to pay all wages owed employees upon termination of the employment relationship; and (5) failing to provide accurate wage statements.

The parties engaged in two mediations of the matter before the Hon. William Cahill (Ret.) in March, 2009, and subsequently before the Hon. Diane Wayne (Ret.).

The Court approved the attorneys’ fees request, which represented 30% of the total gross settlement amount.  The Court noted that:

California recognizes the common fund doctrine for the award of attorneys’ fees. Under California and Ninth Circuit precedent, a court has discretion to calculate and award attorneys’ fees using either the lodestar method or the percentage-of-the-fund method. Wersha v. Apple Computer, Inc., 91 Cal.App. 4th 224, 253 (2001); Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir.2002). The Court, in its discretion, finds that the percentage method is a fair, reasonable, and appropriate method for awarding attorneys’ fees in this case. . . .

Overall, although this percentage is slightly higher than the 25% benchmark for fees in class action cases, it is consistent with other wage and hour class actions where the recovery is less than $10 million. Moreover, there have been no objections to the amount of attorneys’ fees. The Court therefore finds that the amount of attorneys’ fees is warranted by the complexity of the case and Class Counsel’s dedication of extraordinary time and resources to the prosecution of this claim.

Id. **6-7.

By CHARLES H. JUNG

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In Trade Secrets Case Related to Barnes and Noble’s Nook Device: Court Grants Partial Summary Judgment Based on Disclosure of Secrets in Patent Applications, But Rejects UTSA Preemption Argument as Premature

Nook
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The Northern District of California granted partial summary judgment to a defendant in a trade secrets case on the ground that plaintiff disclosed its information to the public in its published patent applications.  Spring Design, Inc. v. Barnesandnoble.com, LLC, No. C 09-05185 JW, 2010 WL 5422556 (N.D. Cal. Dec. 27, 2010) (slip op.).  The court rejected defendant’s argument that plaintiff’s UCL claim was preempted by the UTSA because “if the confidential information is not a trade secret, then preemption would not apply because the claim would seek a civil remedy not based on the  misappropriation of a trade secret.” Id. *10.

Background

In 2006 and 2007, Plaintiff filed several patent applications which claim different variations of an eReader with a dual-display design, consisting of an electronic paper display (“EPD”) and a liquid crystal display (“LCD”).  Id. *1.  In 2009, Plaintiff and Defendant explored possible collaboration on an eReader, and the parties entered into a nondisclosure agreement (“NDA”) in which the parties agreed not to disclose, reproduce, transmit or use the other’s confidential information except to certain employees on a need-to-know basis.  Id. From February to October 2009, Plaintiff and Defendant conducted several meetings and exchanged emails regarding Plaintiff’s eReader technology.  But on October 20, 2009, Defendant announced the release of the NOOK—its Android-based, dual-screen eReader.  Id. *2.  In 2010, Plaintiff launched its competing eReader device, the Alex, which is also a dual-screen eReader. Id.

Plaintiff Spring Design, Inc. brought an action Barnesandnoble.com, LLC alleging, inter alia, misappropriation of trade secrets and violations of California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code section 17200, et. seqId. *1.Plaintiff alleged that Barnesandnoble.com used Plaintiff’s confidential information to develop a competing eReader device, the Nook, in violation of the parties’ non-disclosure agreement.Id. The parties brought cross motions for summary judgment.

Discussion

Defendant moved for summary judgment on the UTSA cause of action on the grounds that, inter alia: Plaintiff’s information does not qualify for trade secret protection because Plaintiff disclosed its information to the public in its published patent applications.  Id. **3-4. Continue reading

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