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Articles

“What the Court Giveth, it May Taketh Away”

April 16, 2014

Articles

“What the Court Giveth, it May Taketh Away”

April 16, 2014

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Texas Appeals Court Erases Verdict of $4.4 Million in Lost Profits for Trade Secret Misappropriation

One monetary remedy often sought by a trade secrets-plaintiff is lost profits.  Want to know what kind of evidence a trade secret-plaintiff needs to marshall and present to support a lost profits damage model?  A recent Texas appeals court provides instructions about how NOT to do it.  Indeed, in Hunter Buildings & Manufacturing, L.P. v. MBI Global, L.L.C., No. 14-12-00246-CV, 2014 WL 1258017 (Tex. App.—Houston [14th Dist.] Mar. 27, 2014, no pet. h.), the court reversed a $4.4 million verdict for lost profits, finding that the proof offered by trade secrets-plaintiff was insufficient to establish that the defendants’ alleged trade secret misappropriation caused the trade secret-plaintiff’s damages.

The dispute in Hunter Buildings arose out of the departure of Milo Nickel and Michael LeBlanc, president and vice-president, respectively, from MBI Global (“Global”)—a company in the business of manufacturing and selling blast-resistant buildings.  Nickel and LeBlanc left in 2009 to form another company, BBG Group.  Although Nickel and LeBlanc both had signed a “Non-competition and Trade Secrets Agreement” at Global, Nickel and LeBlanc formed BBG Group, and went into business with Hunter Buildings to compete against Global. <<Continue reading on Fish’s Litigation Blog>>

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