Justia Civil Procedure Opinion Summaries

The dispute centers on allegations by a manufacturer of semiconductor wafers that it developed a novel porous silicon technology in 2018 and entered into a non-disclosure agreement with a group of semiconductor companies and their executives. The parties discussed a potential collaboration, during which the manufacturer claims it disclosed proprietary trade secrets. While negotiations were ongoing, the semiconductor companies filed a series of patent applications, which the manufacturer alleges incorporated its confidential technology without crediting its inventors. The negotiations ultimately failed, and the manufacturer was not included as an inventor on any of the resulting patents.The manufacturer filed suit in the United States District Court for the Central District of California, asserting federal claims for trade secret misappropriation and correction of inventorship, as well as several California state law claims, including trade secret misappropriation and interference with economic advantage. The defendants moved to dismiss and also filed a special motion to strike the state law claims under California’s anti-SLAPP statute, which is designed to quickly dismiss lawsuits targeting protected speech or petitioning activity. The district court granted in part and denied in part the motion to dismiss, and denied the anti-SLAPP motion to strike. The defendants appealed the denial of the anti-SLAPP motion.The United States Court of Appeals for the Federal Circuit held that the denial of a California anti-SLAPP motion to strike is immediately appealable under the collateral order doctrine as a matter of Federal Circuit law. The court found that the district court erred by conflating the two steps of the anti-SLAPP analysis, improperly considering the merits of the trade secret claims at the first step. The Federal Circuit vacated the district court’s denial of the motion to strike and remanded for further proceedings consistent with its opinion. View "IQE PLC v. NEWPORT FAB, LLC " on Justia Law

Several physicians who were employed by an anesthesia practice left their positions and became employees of a hospital with which their former practice had a service contract. The physicians had previously sold their ownership interests in the practice to another entity, and their employment contracts contained restrictive covenants, including non-compete and non-solicitation provisions. After the hospital indicated it might not renew its contract with the practice, the physicians and hospital administrators began discussing future employment arrangements, retaining legal counsel and entering into a common interest agreement. The hospital ultimately sent notice of nonrenewal, and the physicians resigned and signed employment contracts with the hospital. The anesthesia practice and its parent company sued the physicians and the hospital, alleging breach of contract, tortious interference, misappropriation of trade secrets, breach of fiduciary duty, and civil conspiracy. The hospital also sued the practice, seeking to bar enforcement of the restrictive covenants.The Hillsborough County Superior Court (Northern District) issued several orders during discovery, compelling the hospital and physician defendants to disclose certain communications they claimed were protected by attorney-client privilege and the common interest doctrine, and ordering their counsel to sit for depositions. The court found that the crime-fraud exception to privilege applied to alleged breaches of fiduciary duty and tortious interference, and limited the application of the common interest doctrine to communications after litigation was pending. It also ordered disclosure of some privileged communications under a theory of necessity.On interlocutory appeal, the Supreme Court of New Hampshire held that the crime-fraud exception to attorney-client privilege does not apply to claims of breach of fiduciary duty or tortious interference with contractual relations. The court affirmed the trial court’s ruling that the common interest doctrine did not apply until litigation was pending, but vacated the orders permitting depositions of counsel and requiring disclosure of privileged communications under a necessity theory, remanding those issues for further proceedings. The disposition was affirmed in part, reversed in part, vacated in part, and remanded. View "Atl. Anesthesia, P.A. v. Lehrer" on Justia Law

A patent owner brought two infringement lawsuits in the United States District Court for the Western District of Texas against a semiconductor company, alleging that certain integrated circuit products infringed three patents related to electronic circuitry and power-saving features. The accused products included specific chips that allegedly implemented a particular feature. After the lawsuits were filed, the defendant challenged the cases on grounds including improper service, lack of personal jurisdiction, and failure to state a claim. During the litigation, the plaintiff produced a licensing agreement with a third party, and subsequently entered into another agreement covering the accused products. Shortly thereafter, the plaintiff voluntarily dismissed both cases without prejudice.Following the dismissals, the defendant moved for attorneys’ fees, costs, and sanctions, arguing that the lawsuits were baseless. The district court denied the defendant’s motions for attorneys’ fees under 35 U.S.C. § 285, costs under Rule 54(d)(1), and sanctions under Rule 11 and 28 U.S.C. § 1927, but converted the voluntary dismissals to dismissals with prejudice as a sanction. The court also denied the defendant’s discovery requests related to confidentiality and access to certain materials.On appeal, the United States Court of Appeals for the Federal Circuit held that the district court erred in denying fees under § 285 and costs under Rule 54(d)(1), because the defendant became a prevailing party when the dismissals were converted to dismissals with prejudice. The Federal Circuit vacated those portions of the district court’s decision and remanded for further proceedings. The appellate court affirmed the district court’s denial of Rule 11 sanctions and fees under § 1927, finding no abuse of discretion. It also affirmed the denial of the remaining discovery request, concluding that the district court did not abuse its discretion in applying the protective order. The judgment was thus vacated in part, affirmed in part, and remanded. View "FUTURE LINK SYSTEMS, LLC v. REALTEK SEMICONDUCTOR CORPORATION " on Justia Law

Two business compliance companies entered into a partnership to develop a software product, with one company providing “white-label” services to the other. The partnership was formalized in a written agreement, but disputes arose over performance, payment for out-of-scope work, and the functionality of the software integration. As the relationship deteriorated, the company that had sought the services began developing its own infrastructure, ultimately terminating the partnership and launching a competing product. The service provider alleged that its trade secrets and proprietary information were misappropriated in the process.The United States District Court for the Eastern District of Pennsylvania presided over a jury trial in which the service provider brought claims for breach of contract, trade secret misappropriation under both state and federal law, and unfair competition. The jury found in favor of the service provider, awarding compensatory and punitive damages across the claims. The jury specifically found that six of eight alleged trade secrets were misappropriated. The defendant company filed post-trial motions for judgment as a matter of law, a new trial, and remittitur, arguing insufficient evidence, improper expert testimony, and duplicative damages. The District Court denied these motions.On appeal, the United States Court of Appeals for the Third Circuit reviewed the District Court’s rulings. The Third Circuit held that the defendant had forfeited its argument regarding the protectability of the trade secrets by not raising it with sufficient specificity at trial, and thus assumed protectability for purposes of appeal. The court found sufficient evidence supported the jury’s finding of misappropriation by use, and that the verdict was not against the weight of the evidence. The court also found no reversible error in the admission of expert testimony. However, the Third Circuit determined that the damages awarded for trade secret misappropriation and unfair competition were duplicative, and conditionally remanded for remittitur of $11,068,044, allowing the plaintiff to accept the reduced award or seek a new trial on damages. View "Harbor Business Compliance Corp v. Firstbase IO Inc" on Justia Law

Ripple Analytics Inc. operated a software platform for human resources functions and originally owned the federal trademark for the word “RIPPLE®” in connection with its software. In April 2018, Ripple assigned all rights, title, and interest in its intellectual property, including the trademark, to its Chairman and CEO, Noah Pusey. Meanwhile, People Center, Inc. began using the name “RIPPLING” for similar software, though it abandoned its own trademark registration effort. Ripple later sued People Center for trademark infringement and unfair competition, claiming ownership of the RIPPLE® mark.The United States District Court for the Eastern District of New York reviewed the case. During discovery, Ripple produced the assignment agreement showing that Pusey, not Ripple, owned the trademark. People Center moved to dismiss under Federal Rule of Civil Procedure 17, arguing Ripple was not the real party in interest. The district court dismissed Ripple’s trademark infringement claim with prejudice, dismissed its unfair competition claims without prejudice for lack of standing, and denied Ripple’s motion to amend its complaint, finding the proposed amendment futile because it did not resolve the standing issue.On appeal, the United States Court of Appeals for the Second Circuit affirmed the district court’s judgment. The appellate court held that Ripple was not the real party in interest for the trademark infringement claim, as ownership had been assigned to Pusey, who failed to ratify or join the action. The court also held that Ripple lacked standing to pursue unfair competition claims under federal and state law, as it no longer had a commercial interest in the trademark. The denial of Ripple’s motion to amend was upheld because the amendment would not cure the standing defect. The court further found that the district court’s interlocutory order allowing People Center to amend its answer was not properly before it on appeal. View "Ripple Analytics Inc. v. People Center, Inc." on Justia Law

A trading company and a base oil manufacturer entered into a sales agreement in 2016, under which the manufacturer would serve as the exclusive North American sales representative for a high-quality base oil product distributed by the trading company. The agreement included noncompete provisions and was set to expire at the end of 2021. In late 2020, suspicions arose between the parties regarding potential breaches of the agreement, leading to a series of letters in which the trading company accused the manufacturer of selling a competing product and threatened termination if the alleged breach was not cured. The manufacturer responded by denying any breach and, after further correspondence, declared the agreement terminated. The trading company agreed that the agreement was terminated, and both parties ceased their business relationship.The trading company then filed suit in the United States District Court for the Southern District of Texas, alleging antitrust violations, breach of contract, business disparagement, and misappropriation of trade secrets. The manufacturer counterclaimed for breach of contract and tortious interference. After a bench trial, the district court found in favor of the manufacturer on the breach of contract and trade secret claims, awarding over $1.3 million in damages. However, the court determined that the agreement was mutually terminated, not due to anticipatory repudiation by the trading company, and denied the manufacturer’s request for attorneys’ fees and prevailing party costs.On appeal, the United States Court of Appeals for the Fifth Circuit affirmed the district court’s finding that the trading company did not commit anticipatory repudiation and that the agreement was mutually terminated. The Fifth Circuit also affirmed the denial of prevailing party costs under Rule 54(d) of the Federal Rules of Civil Procedure. However, the appellate court vacated the denial of attorneys’ fees under the agreement’s fee-shifting provision and remanded for further proceedings on that issue. View "Penthol v. Vertex Energy" on Justia Law

Quintara Biosciences, Inc. and Ruifeng Biztech, Inc. are both DNA-sequencing-analysis companies that had a business relationship from 2013 to 2019. In 2019, the relationship deteriorated, with Quintara alleging that Ruifeng locked it out of its office, took its equipment, and hired away its employees. Quintara then filed suit, asserting a claim under the federal Defend Trade Secrets Act (DTSA), alleging misappropriation of nine specific trade secrets, including customer and vendor databases, marketing plans, and proprietary technology.The United States District Court for the Northern District of California, referencing a California state law rule, ordered Quintara to disclose its alleged trade secrets with “reasonable particularity” at the outset of discovery. Dissatisfied with the specificity of Quintara’s disclosures, Ruifeng moved to strike most of the trade secrets under Federal Rule of Civil Procedure 12(f). The district court granted the motion, striking all but two of the trade secrets and effectively dismissing Quintara’s claims as to the others. The case proceeded to trial on the remaining trade secrets, and a jury found in favor of Ruifeng.The United States Court of Appeals for the Ninth Circuit reviewed the district court’s actions. The appellate court held that the district court abused its discretion by striking Quintara’s trade secrets at the discovery stage. The Ninth Circuit clarified that, under the DTSA, whether a trade secret is identified with sufficient particularity is a question of fact to be resolved at summary judgment or trial, not at the outset of discovery. The court reversed the district court’s order striking the trade secrets, affirmed the denial of a mistrial, and remanded the case for further proceedings. The main holding is that DTSA claims should not be dismissed at the discovery stage for lack of particularity except in extreme circumstances, and Rule 12(f) does not authorize striking trade secrets in this context. View "QUINTARA BIOSCIENCES, INC. V. RUIFENG BIZTECH, INC." on Justia Law

John Snyder, after working for Guardian Life Insurance Company and obtaining a national customer list (the Guardian Broker List), was employed by Beam Technologies, Inc. Snyder claims that Beam induced him to join and disclose the list, promising compensation. While at Beam, Snyder created state-specific broker lists derived from the Guardian Broker List and inadvertently included the full list in emails to several Beam employees. He did not mark the lists as confidential, restrict access, or inform Beam of their confidential nature. After his employment ended, Snyder did not attempt to recover the list or notify Beam of its confidential status, and he later confirmed to Beam’s CEO that the disclosure was intentional.Snyder sued Beam in the United States District Court for the District of Colorado, alleging misappropriation of trade secrets under federal and state law, as well as several state law claims. The district court granted summary judgment to Beam on the trade secret claims, finding Snyder failed to show he “owned” the Guardian Broker List. The court also granted Beam’s motion to exclude Snyder’s damages expert under Federal Rule of Evidence 702 and, in doing so, barred Snyder from presenting any evidence or witnesses on lost wages for his remaining claims. Snyder’s motion to reconsider this order was denied, and the parties settled or dismissed the remaining claims, leading to a final judgment.The United States Court of Appeals for the Tenth Circuit affirmed summary judgment on the trade secret claims, holding that Snyder failed to take reasonable measures to maintain the secrecy of the Guardian Broker List, a requirement under both the Defend Trade Secrets Act and the Colorado Uniform Trade Secrets Act. However, the Tenth Circuit reversed the district court’s Rule 702 order to the extent it excluded all evidence and witnesses on lost wages, finding that such a dispositive ruling required notice and the procedural protections of summary judgment. The case was remanded for further proceedings on that issue. View "Snyder v. Beam Technologies" on Justia Law

Super Lighting sued CH Lighting for infringing three patents related to LED tube lamps. CH Lighting conceded infringement of two patents before trial. The district court excluded CH Lighting's evidence on the validity of these two patents and granted Super Lighting's motion for judgment as a matter of law (JMOL) that the patents were not invalid. A jury found the third patent infringed and not invalid, awarding damages for all three patents. CH Lighting appealed.The United States District Court for the Western District of Texas initially reviewed the case. The court excluded evidence from CH Lighting regarding the validity of the two patents and granted JMOL in favor of Super Lighting. The jury found the third patent infringed and awarded damages. CH Lighting's motions for JMOL on invalidity and for a new trial were denied, and the court doubled the damages award.The United States Court of Appeals for the Federal Circuit reviewed the case. The court found that the district court erred in granting JMOL on the validity of the two patents because it improperly excluded CH Lighting's evidence. The court held that a new trial was required to determine the validity of these patents. The court also found that substantial evidence supported the jury's verdicts of infringement and no invalidity for the third patent. Additionally, the court instructed the district court to reassess the reliability of Super Lighting's damages expert's testimony under Rule 702 of the Federal Rules of Evidence. Consequently, the court affirmed in part, reversed in part, vacated in part, and remanded the case for further proceedings. View "JIAXING SUPER LIGHTING ELECTRIC APPLIANCE, CO. v. CH LIGHTING TECHNOLOGY CO., LTD. " on Justia Law

CPI Security Systems, Inc. filed a lawsuit against Vivint Smart Home, Inc., alleging that Vivint engaged in deceptive practices to lure away CPI’s customers. Vivint sales representatives falsely claimed that Vivint had acquired CPI, that CPI was going out of business, or that Vivint needed to upgrade CPI’s equipment. These tactics led many CPI customers to switch to Vivint, causing significant losses for CPI. A jury found Vivint liable for violating the Lanham Act, the North Carolina Unfair and Deceptive Trade Practices Act (UDTPA), and for committing the common-law torts of unfair competition and tortious interference with contracts. The jury awarded CPI $49.7 million in compensatory damages and $140 million in punitive damages.The United States District Court for the Western District of North Carolina upheld the jury’s verdict. Vivint appealed, raising several issues, including the requirement of CPI’s reliance on false statements for the UDTPA claim, the sufficiency of evidence supporting the damages award, the application of North Carolina’s cap on punitive damages, and the admission of prejudicial evidence.The United States Court of Appeals for the Fourth Circuit reviewed the case and found no reversible error. The court held that CPI was not required to prove its own reliance on Vivint’s false statements to establish a UDTPA claim, as the claim was based on unfair competition rather than fraud. The court also found that the evidence presented by CPI was sufficient to support the jury’s damages award. Additionally, the court ruled that the district court correctly applied North Carolina’s cap on punitive damages by considering the total compensatory damages awarded. The court further held that the district court did not abuse its discretion in denying Vivint’s motion to bifurcate the trial or in its evidentiary rulings. The reassignment of the trial judge post-trial did not warrant a new trial. Consequently, the Fourth Circuit affirmed the district court’s judgment. View "CPI Security Systems, Inc. v. Vivint Smart Home, Inc." on Justia Law