Trade Secret Damages
Trade secrets are one of the primary forms of intellectual property, along with patents, trademarks, and copyrights. Trade secrets essentially are confidential proprietary information that provide a competitive advantage by not being known or generally available to competitors. As a result, trade secrets are frequently valuable. Unlike patents, trademarks, and copyrights, trade secrets can only be established in court, as the existence of a trade secret is a question of fact to be determined by ...
Johnston v. Vincent
The plaintiffs and defendants in this case, upon appeal to the Supreme Court of Louisiana, appealed certain rulings of the Louisiana Court of Appeals. The defendants asserted that the Court of Appeals failed to apply the manifest error standard correctly in reversing the district court’s findings of what constituted trade secrets and their misappropriation. The Supreme Court reversed the Court of Appeals on this issue. The Supreme Court also reversed the Court of Appeals as to the increase in the amount of lost profits damages. The Supreme Court also affirmed the Court of Appeals in its determination that actual damages must be trebled and that unjust enrichment damages must be awarded in some amount but were not to be trebled.
Louisiana Supreme Court Reverses Appellate Court as to Misapplication of the Correct Manifest Error Standard, Other Damages-Related Issues
The plaintiffs and defendants in this case, upon appeal to the Supreme Court of Louisiana, appealed certain rulings of the Louisiana Court of Appeals. The defendants asserted that the Court of Appeals failed to apply the manifest error standard correctly in reversing the district court’s findings of what constituted trade secrets and their misappropriation. The Supreme Court reversed the Court of Appeals on this issue. The Supreme Court also reversed the Court of Appeals as to the increase in the amount of lost profits damages. The Supreme Court also affirmed the Court of Appeals in its determination that actual damages must be trebled and that unjust enrichment damages must be awarded in some amount but were not to be trebled.
Parties' Motions to Exclude Each Other’s Experts Are Granted in Part and Denied in Part
In this trade secrets and breach of contract case, portions of each expert’s testimony were found to be offering a factual narrative that is within the purview of a lay jury to ascertain. Those portions of testimony were excluded for both experts, but the parties’ arguments as to the qualifications of the experts and supposed reliance of an expert on the work of another were denied.
Redcell Corp. v. A.J. Trucco, Inc.
In this trade secrets and breach of contract case, portions of each expert’s testimony were found to be offering a factual narrative that is within the purview of a lay jury to ascertain. Those portions of testimony were excluded for both experts, but the parties’ arguments as to the qualifications of the experts and supposed reliance of an expert on the work of another were denied.
Value of Coke’s secret formula could end up in Supreme Court
At last week’s New Jersey CPA Society’s Business Valuation and Litigation Services Conference, Barry Sziklay (Friedman LLP) gave an update on the huge battle between Coca-Cola and the IRS over transfer pricing that involves the trademark and secret formula for the soda giant’s iconic beverage.
The Story Behind Your Valuation: Damodaran’s Five-Step Framework
One of the lessons learned from the COVID-19 crisis is that a coherent narrative is more important than ever in business valuation, says Dr. Aswath Damodaran, of New York University Stern School of Business, who gave the keynote address at the CBV Congress 2021. A valuation needs a marriage of narrative and numbers, Damodaran says. In a good valuation, the numbers are “bound together” by a coherent narrative, and storytelling is kept grounded with numbers. Too much emphasis on numbers can make valuations mere “plug-and-point exercises” that may be perceived to be sales pitches or a confirmation of preconceived values.
BVU News and Trends December 2020
A monthly roundup of key developments of interest to business valuation experts.
Alleged reveal of secret KFC recipe points up valuation question
Ever wonder what those secret 11 herbs and spices are in KFC’s original recipe fried chicken?
Court Decides Daubert Exclusion of Expert Testimony for Failure to Apportion Is Premature
In trade secrets dispute, court denies defendant’s Daubert motion, finding exclusion of opposing damages expert testimony for failure to apportion is premature; whether or not entire market value rule applies is determination for jury “after hearing all the documentary and testimonial evidence.”
Pawelko v. Hasbro, Inc.
In trade secrets dispute, court denies defendant’s Daubert motion, finding exclusion of opposing damages expert testimony for failure to apportion is premature; whether or not entire market value rule applies is determination for jury “after hearing all the documentary and testimonial evidence.”
In Misappropriation Case, Expert’s ‘Head Start’ Damages Calculation Survives Appeal
In breach of fiduciary duty and misappropriation case, appeals court upholds arbitration award of “head start” damages; expert for employer calculated value to the employee from owing equity in competing company whose valuation was higher because of employee’s misconduct toward former employer.
Sabre GLBL, Inc. v. Shan
In breach of fiduciary duty and misappropriation case, appeals court upholds arbitration award of “head start” damages; expert for employer calculated value to the employee from owing equity in competing company whose valuation was higher because of employee’s misconduct toward former employer.
Court Says Expulsion Price Determination in Louisiana Buyout Dispute Is Triable Issue
In buyout dispute resulting from expulsion of LLC member, court finds state law does not preclude use of discounts in valuing withdrawing LLC member’s interest; company’s operating agreement is ambiguous on how to value expelled member’s interest, court says, leaving issue for jury to decide.
Complete Logistical Services, LLC v. Rulh
In buyout dispute resulting from expulsion of LLC member, court finds state law does not preclude use of discounts in valuing withdrawing LLC member’s interest; company’s operating agreement is ambiguous on how to value expelled member’s interest, court says, leaving issue for jury to decide.
Court Admits Unjust Enrichment Damages Based on Profit Projections
In Daubert case centering on misappropriation of trade secrets, court says plaintiff expert’s valuation of trade secrets based on defense projections of sales and profits derived from offending product is admissible; defendant failed to show this approach to determine asset’s value is improper.
Grove US LLC v. Sany America Inc.
In Daubert case centering on misappropriation of trade secrets, court says plaintiff expert’s valuation of trade secrets based on defense projections of sales and profits derived from offending product is admissible; defendant failed to show this approach to determine asset’s value is improper.
Majority Says EBITDA Valuations Buttress Damages Award
In business tort case involving unprofitable entity trying to market a trade secret, court upholds damages award; experts’ EBITDA valuations were based on commonly used method and numerous data sources, and experts linked data to conclusions, court says.
Pike v. Tex. EMC Mgmt., LLC
In business tort case involving unprofitable entity trying to market a trade secret, court upholds damages award; experts’ EBITDA valuations were based on commonly used method and numerous data sources, and experts linked data to conclusions, court says.
Prior Deal’s Royalty Formula Captures Trade Secret’s Value
In trade secret case, appellate court affirms award for actual damages stemming from defendant gas & oil company’s misappropriation of plaintiff scientists’ study; expert reservoir engineer properly relied on the compensation formula of plaintiffs’ prior ...
Southwestern Energy Production Co. v. Berry-Helfand
In trade secret case, appellate court affirms award for actual damages stemming from defendant gas & oil company’s misappropriation of plaintiff scientists’ study; expert reservoir engineer properly relied on the compensation formula of plaintiffs’ prior ...