Protecting trade secrets is an expensive and arduous task

The headline reads that Altavion Inc. won a $5 million judgment against Konica Minolta Systems Laboratories Inc. for trade secrets misappropriation. Score one for the little guy, right?

Altavion Inc had developed proprietary technologies that detect document changes, with important uses in detection of check fraud and altered health records, for example.

Altavion attempted to reach a licensing agreement with Konica Minolta in 2004. After receiving assurances in an executed NDA, there were about 40 meetings in 2004 alone to discuss the technology. (It is difficult to imagine good faith negotiations that would take 40 meetings.)

In 2006, Altavion noticed Konica Minolta patent applications that included the referenced Altavion technology. The company sued for trade secret misappropriation in San Mateo County Superior Court and won a $5M judgment finalized just last month, June of 2012, eight years after the 40 meetings and six years after filing suit.

Altavion asked for over $2B in damages. The company won $1 million in damages, $513,400 in prejudgment interest, almost $3.3M in attorneys’ fees, $79,778 in expert fees and $93,813 in costs. Net of expenses, Altavion received just $1.513M, and Konica Minolta plans to appeal.

Protecting trade secrets is an expensive and painful task. It’s important for valuation analysts and trade secrets owners to understand the expense and time involved, and to plan a protection scenario out: what is left of the trade secrets after prolonged license negotiations or litigation?