A Blog About Intellectual Property Litigation and the District of Delaware


Entries for tag: DTSA

If law has one guiding principle, it is that words matter. The precise choice of verb or adjective can be the difference between friend and foe, peace and war, victory and defeat.

You've read Faust, you get it.

History's most famous lawyer?
History's most famous lawyer? AI-Generated, displayed with permission

We saw a great example of this principle this week in I-Mab Biopharma, v. Inhibrx, Inc., C.A. No. 22-276-CJB (D. Del. Oct. 17, 2024) (Mem. Order). I-Mab was prought under the DTSA which allows damages to be calculated as either (1) damages for actual loss plus unjust enrichment or (2) a reasonable royalty. 18 U.S.C. § 1836(b)(3)(B).

The defendants—who unsurprisingly preferred a lower damages figure—served an expert damages report that noted that plaintiff's "actual damages" might be "zero." The plaintiff moved to exclude the opinion under Daubert, arguing that their damages theory was based on a reasonable royalty, and thus an opinion that their "actual damages" might be zero was neither here nor there, and was unduly prejudicial.

The defendant countered that the expert had meant that "Dr. Manning is 'not offering an opinion on actual losses, but instead references ‘actual damages’ as reflective of damages I-Mab may be awarded'—in other words, according to Defendants, the zero damages opinion is an opinion that Plaintiff’s reasonable royalty damages may be zero." Id. at 8 (quoting D.I. 364 at 23).

Judge Burke, however, found the expert's choice of words dispositive, and struck the so-called "zero damages opinion"

The Court agrees with Plaintiff that Defendants are ignoring the “actual words” that Dr. Manning used, as he did not opine in the zero damages opinion that Plaintiff’s “reasonable royalty damages” are zero (nor do Defendants point to anywhere else in Dr. Manning’s report where he opined that Plaintiff’s reasonable royalty damages should be zero). Nor do Defendants explain why an opinion that Plaintiff’s “actual damages . . . are zero” should be interpreted to actually mean that Plaintiff’s “reasonable royalty damages are zero.” Moreover, the Court agrees with Plaintiff that Dr. Manning does not seem to provide any facts or analysis in support of the zero damages opinion. Thus, Defendants have not sufficiently explained how, inter alia, Dr. Manning’s zero damages opinion is relevant in light of Plaintiff’s argument to the contrary; therefore it must be excluded.

Id. at 9 (internal citations omitted).

Short answer - yes, obviously.

Long answer - also yes, also obviously, but the timing is important.

AI-Generated, displayed with permission

The issue came to the fore in I-Mab Biopharma v. Inhibrx, Inc., C.A. No. 22-276-CJB (D. Del. Sept. 19, 2024) (Mem. Ord.). I-mAB is a DTSA action alleging the theft of about a dozen separate trade secrets. A few months back, the plaintiff went through a restructuring that resulted in several related entities now owning some or all of the trade secrets. The plaintiff then moved to add these entities as co-plaintiffs. Judge Burke denied the motion due to the potential for delay, given that the case was scheduled for trial int he near future.

Unsurprisingly …

Dollar Bills
Sharon McCutcheon, Unsplash

It's always good to know where the lines are. Today, Judge Williams awarded attorneys fees after the plaintiff in a Defend Trade Secrets Act action maintained an "objectively specious" argument after the close of fact discovery:

A claim is objectively specious where there is a complete lack of evidentiary proof from the party suing. . . . [T]he Court agrees with [defendant] Backer that [plaintiff] ZIM litigated this matter with knowledge that its claims were objectively specious. While Backer contends that ZIM knew that its claims were objectively baseless when it filed the Complaint, the Court finds that ZIM understood that its claims were objectively specious by the close of fact discovery on January 12, …

Exercise Bikes
Jonathan Petit, Unsplash

We don't see too many DTSA cases here (at least in comparison to patent cases), but this one is interesting.

In Peloton Interactive v. iFIT Inc., C.A. No. 20-1535-RGA (D. Del.), a mechanic at defendant iFIT had a childhood friend who was working as a freelance prop man helping shoot some commercials for iFIT competitor Peloton.

According to the Court, the iFIT mechanic found out about his friend's work and, despite allegedly knowing the scripts for the commercials were under an NDA, convinced his friend the prop man to forward him the scripts, which he did (along with a note "Dont [sic] forward or show my name.").

The iFIT mechanic then forwarded the scripts to the hero of this story, an iFIT Vice President of Product Development, referred to in the opinion as "Mr. Willardson." Mr. Willardson immediately shut down the idea of using the competitor's information and involved in-house counsel:

On October 26, 2020, after returning to the office, Mr. Chambers printed a copy of the Scripts from his email. . . . After reading a portion of the Scripts, Mr. Chambers brought the document to his immediate supervisor, Mr. Willardson, VP of Product Development. . . . Mr. Willardson quickly flipped through the Scripts and told Mr. Chambers not to share the document with anyone. . . . Mr. Willardson then put the Scripts in a sealed envelope and gave the envelope to iFIT's in-house counsel. . . . Mr. Chambers and Mr. Willardson have both testified that they never disseminated the Scripts.

They should give this guy a ...

In trade secret litigation, parties often fight bitterly over the level of particularity with which the party asserting misappropriation has described its trade secrets. That dispute frequently plays out in connection with interrogatory responses or other trade secret contentions, served after the initial pleadings are closed.

However, it can arise earlier in the case. In a recent order, Judge Andrews dismissed a federal trade secret misappropriation claim under Rule 12(b)(6) because the complaint identified "large, general areas of information that Plaintiff alleges to have shared with Defendant" but failed to "identify what the trade secrets are within those general areas."

Notably, the order, issued in Lithero, LLC v. Astrazeneca Pharms. LP, C.A. No. 19-2320-RGA (D. Del.), states …