Cases from C.J.

Supreme Court of the State of Delaware
Delaware Supreme Court Says Trade Secret Violation Can Be A Valid Business Judgment

When DuPont wasn’t able to create a product that could compete with “Roundup Ready,” it created a product that combined its own technology with that of Monsanto, the original “Roundup Ready” manufacturer. Monsanto sued DuPont for patent infringement, resulting in a settlement in which DuPont agreed to pay Monsanto $1.7 billion over ten years in exchange for a licensing agreement. One of DuPont’s stockholders, a Pennsylvania pension fund, brought a derivative suit against DuPont for breach of fiduciary duty in connection with DuPont’s “combined technology” product. In May 2015, the Delaware Chancery Court dismissed the derivative lawsuit, but another investor attempted to revive the derivative suit. The Chancery Court said the investor failed to show that the board’s refusal to take legal action was an invalid exercise of business judgment. On January 28, 2016, the Chancery Court affirmed the dismissal of the derivative suit.

United States District Court for the Northern District of Oklahoma
ND Okla. Orders Reasonable Royalties under UTSA

On September 27, 2012, the Northern District of Oklahoma found that “exceptional circumstances” existed in a dispute between competing aerial broadcast camera makers, warranting the imposition of reasonable royalties in place of a prohibitory injunction under Section 87(B) of the Oklahoma UTSA.

A jury found misappropriation of trade secrets belonging to plaintiff Skycam, LLC in September, 2011. On Skycam’s Application for Injunction, the court held that forward-looking relief in the form of a permanent injunction was warranted, finding (inter alia) that “the threatened injury outweighs the harm that the injunction may cause” and that the injunction would not “adversely affect the public interest” as required by Tenth Circuit law.

The court found, however, that because these conditions were not met with respect to a prohibitory injunction, but only with respect to the imposition of a reasonable royalty, the case presented a set of “exceptional circumstances” under the meaning of the UTSA.
First, the court agreed with defendant Actioncam, LLC that a prohibitory injuction would “put [it] out of business,” also noting that the existence of direct competition between the parties, and thus the benefit to Skycam of a prohibitory injunction, was in question. The court further held that a prohibitive injunction would be in derogation of the public interest because it would “eliminate competition and technologal innovation” in the market for aerial cameras.

Damages in the case had been based on a flat and per-event royalty through the date of the judgment. The court therefore ordered further per-event royalties lasting from the date of the judgment and ending 42 months after the defendant’s system had entered the for-profit market. The amount and duration of these royalties were determined on the basis of the plaintiff's expert testimony.