Trade Secret Litigation: ClearOne Wins

Over my time on this blog, I have tried to emphasize and explain the value of trade secretes to a business and the costs in failing to protect those trade secrets. These reports show the costs.

This MarketWatch press release gives some background to the verdict:

A jury trial was held in federal court in Utah in connection with the lawsuit (the "Intellectual Property Case") initiated by ClearOne against Biamp Systems Corporation ("Biamp"); WideBand Solutions, Inc. ("WideBand"); three of WideBand's principals - Dr. Jun Yang, who was a former ClearOne employee, Andrew Chiang, who was previously affiliated with an entity that sold certain assets to ClearOne, and Lonny Bowers; and Versatile DSP, Inc. (collectively, the "Defendants"). ClearOne's complaint brought claims against different combinations of the Defendants for, among other things, misappropriation of trade secrets, breach of contract, breach of the covenant of good faith and fair dealing, and breach of fiduciary duty, primarily in relation to the theft of certain algorithms and computer code. At trial, and throughout the Intellectual Property Case, ClearOne was represented by the Utah law firm of Magleby & Greenwood, P.C.

On November 5, 2008, the jury returned a verdict in the Intellectual Property Case in favor of ClearOne and against all of the Defendants. Accordingly, the jury awarded ClearOne approximately $3.5 million in compensatory damages and $7.0 million in punitive damages. Among other things, the jury found that all of the Defendants willfully and maliciously misappropriated ClearOne's trade secrets. Based on that finding, the court may also award ClearOne exemplary damages and reasonable attorneys' fees. The court left in place the previously-entered preliminary injunction, pending ClearOne's application for entry of a permanent injunction against the Defendants.

Deseret News | Jury awards ClearOne Communications $10 million

ClearOne Communications Inc. this week was awarded more than $10 million by a jury in a case against defendants accused of misappropriating trade secrets and other actions.

The company was awarded $3.5 million in compensatory damages and $7 million in punitive damages in U.S. District Court in Salt Lake City.

ClearOne sued Biamp Systems Corp., WideBand Solutions Inc., three of WideBand's principals and Versatile DSP Inc. Among the allegations were misappropriation of trade secrets, breach of contract, breach of the covenant of good faith and fair dealing, and breach of fiduciary duty, primarily in relation to the theft of certain algorithms and computer code.

The court may also award Salt Lake City-based ClearOne exemplary damages and attorney fees. The court left in place the previously entered preliminary injunction, pending ClearOne's application for entry of a permanent injunction against the defendants.

Business Digest - Salt Lake Tribune

ClearOne wins monetary damages in trade-secret case
Salt Lake City-based ClearOne Communications Inc. said it has received a multimillion-dollar damage award in a federal trade-secret case.
The company had contended that Biamp Systems Corp., WideBand Solutions Inc. and several individuals, including a former employee, misappropriated trade secrets that included algorithms and computer code used in its audio conferencing equipment.
ClearOne said in a news release that a federal jury awarded it about $3.5 million compensatory damages and $7 million in punitive damages.

So what are you doing to protect your trade secrets?