[00:00:02] Speaker 00:
It pleases the court, and I would like to reserve three minutes for rebuttal.

[00:00:07] Speaker 00:
The jury found that defendant Medaglia willfully and maliciously stole my client EchoSpan's most valuable trade secret.

[00:00:26] Speaker 00:
Medaglia did this by lying to gain access to EchoSpan's system,

[00:00:31] Speaker 00:
and then performing what Medalia's employees called a lift and shift of EchoSpan software into the competing software that Medalia was developing.

[00:00:39] Speaker 00:
The jury awarded $25.7 million in compensatory and exemplary damages, and the district court granted judgment as a matter of law on the issue of damages only, reducing that number to zero.

[00:00:53] Speaker 00:
In doing so, the district court failed to adhere to the strict standard for granting judgment as a matter of law, and it also misapplied the law on damages.

[00:01:01] Speaker 00:
So I'd like to talk about those two issues in turn, keeping in mind that my job first and foremost is to answer any questions this court may have along the way.

[00:01:10] Speaker 00:
In ruling on a judgment as a matter of law, the question is whether no reasonable juror could reach the verdict that the jury reached.

[00:01:19] Speaker 00:
In other words, if there's a way to reconcile the verdict and the evidence, the court must do so and uphold the verdict, drawing all reasonable inferences in favor of the evidence, disregarding conflicting evidence.

[00:01:31] Speaker 00:
In this case, the jury found that Medalia misappropriated fewer than all of the trade secrets EcoSpan alleged.

[00:01:41] Speaker 00:
One.

[00:01:42] Speaker 00:
One.

[00:01:43] Speaker 00:
And so it awarded less than the total damages EcoSpan sought.

[00:01:47] Speaker 03:
What's the causal connection between the appropriation of Secret Six and

[00:01:53] Speaker 03:
$11.7 million in the evidence, because I thought that your expert witness testified that there was no way to apportion the damages caused by the appropriation of several of these items.

[00:02:14] Speaker 00:
So what the expert testified to was that his damages model did not separately break down the trade secrets on a trade secret by trade secret basis.

[00:02:25] Speaker 00:
What he was not testifying was that it was impossible to make any, to draw any, to work down.

[00:02:31] Speaker 00:
Was he asked that question?

[00:02:33] Speaker 00:
He wasn't asked that question, correct.

[00:02:35] Speaker 00:
And so in this case, what did the jury hear?

[00:02:38] Speaker 00:
The jury heard about all of the trade secrets, each of the trade secrets, from both expert witnesses and lay witnesses, saw a demonstration of the trade secrets too.

[00:02:47] Speaker 00:
There was a particular emphasis on trade secret six, which is the one that was found to be misappropriated, the hub that headed the octopus, the most significant trade secret that had its fingers and all the others.

[00:02:58] Speaker 00:
Then we had Medaglia's expert who testified on cross-examination that

[00:03:02] Speaker 00:
The indispensability of a particular trade secret to a unified whole is relevant to determining the amount of damages.

[00:03:10] Speaker 00:
That's relevant evidence of damages.

[00:03:12] Speaker 00:
And then you had EchoSpan's expert.

[00:03:14] Speaker 00:
And he testified that this was an integrated software program.

[00:03:18] Speaker 00:
So 20 years ago, maybe 10 years ago, we would have gone to Best Buy and bought a box that had a CD-ROM in it.

[00:03:25] Speaker 00:
We put that CD-ROM in our computer and install a program.

[00:03:28] Speaker 00:
That's what we're talking about here.

[00:03:29] Speaker 00:
A single program with many parts.

[00:03:32] Speaker 00:
And so when Medaglia performed its lift and shift, it took that program and integrated it into its competing program.

[00:03:41] Speaker 00:
And you also had the EcoSpan's expert testify on page 1827 of volume 9 that even if some trade secrets drop out, if the remaining secret or secrets are value drivers, it is appropriate to award the full amount.

[00:03:58] Speaker 00:
Now, the jury didn't do that.

[00:03:59] Speaker 00:
The jury awarded half of the total amount.

[00:04:02] Speaker 00:
But that is within the range of the evidence.

[00:04:05] Speaker 00:
And according to Georgia law, which governs here, that means it must be affirmed.

[00:04:10] Speaker 01:
I mean, that's all that's required in your position that as long as it's within the range, there doesn't have to be anything else to help us understand why the jury picked that particular number.

[00:04:21] Speaker 01:
They could have picked it out of the air.

[00:04:22] Speaker 01:
But it's less than the full amount.

[00:04:24] Speaker 01:
And they found less than the full amount of violations.

[00:04:26] Speaker 01:
And so good enough.

[00:04:27] Speaker 00:
Under the Georgia cases, the Georgia cases do Trotman and White both say it is within the range of the evidence, so it shall be affirmed.

[00:04:38] Speaker 00:
And I'd like to bring the Court's attention to the Turner Broadcasting case, because in that case, it says specifically that

[00:04:47] Speaker 00:
That that this is so even though it may not correspond with the contentions of either party.

[00:04:53] Speaker 00:
That's a direct quote from Turner Broadcasting So the Georgia cases say that but but we do need a right a reasonable basis, right?

[00:05:00] Speaker 00:
Ultimately what reasonable basis means simply is that it's supported by substantial evidence and again ordinary tort damages rules apply in these cases and

[00:05:10] Speaker 00:
In tort cases, juries are entrusted with determining things like loss of business goodwill, or in more conventional tort cases, emotional distress.

[00:05:20] Speaker 00:
We vest our juries with really wide latitude to determine things that aren't always perfectly capable of precise apportionment.

[00:05:28] Speaker 00:
And in this case, we're talking about Medallia's unjust enrichment from lifting and shifting a unitary product into its other.

[00:05:37] Speaker 00:
So its profits that it gained, its benefits that it reaped, were not reaped on a trade secret by trade secret basis.

[00:05:45] Speaker 00:
They were reaped on a unitary basis.

[00:05:48] Speaker 01:
I guess, and maybe you've answered this, but I'm going to ask it again and you can answer it again if you already have.

[00:05:54] Speaker 01:
You can imagine a case where the evidence comes in and it is basically, you know, we've got these five violations that we're alleging and the total value of these violations is $20 million.

[00:06:04] Speaker 01:
And nothing else is said about how you would break out for each individual violation.

[00:06:09] Speaker 01:
You can imagine a state of the evidence where it's sort of an all or nothing, right?

[00:06:12] Speaker 01:
There's these package of violations.

[00:06:14] Speaker 01:
This is the price tag associated with them.

[00:06:16] Speaker 01:
And the jury or the fact finder is giving no tools to parse.

[00:06:20] Speaker 01:
So here the question is, did the jury have some sort of tools to parse, or is this an all or nothing record?

[00:06:26] Speaker 00:
This is not an all or nothing record.

[00:06:28] Speaker 00:
And that actually brings me to the O2 Micro case.

[00:06:30] Speaker 00:
And the reason that this case is so different from O2 Micro.

[00:06:35] Speaker 00:
In that case, you had disjointed trade secrets.

[00:06:39] Speaker 00:
They were not part of a unified structure.

[00:06:40] Speaker 00:
They were not part of a single program.

[00:06:43] Speaker 00:
multiplexing pins or something of that nature in the back of an LCD screen, which is what our computers and TVs had.

[00:06:51] Speaker 00:
And then, on the other hand, you also had cost data in Microsoft Excel spreadsheets, right off to the side.

[00:06:59] Speaker 00:
In that case, to bundle those all together, under the facts of that case,

[00:07:05] Speaker 00:
The court said out the gate, before trial, you're going to have to go with this on an all or nothing.

[00:07:11] Speaker 00:
But it wasn't dealing with a unified structure.

[00:07:14] Speaker 00:
So in a case like this, where you're dealing with a unified structure, it makes much more sense to look at that unjust enrichment holistically and work down.

[00:07:26] Speaker 00:
And so in ATS, where you had a unified structure, or excuse me, in Bladerum, where you had a unified structure, the court said,

[00:07:34] Speaker 00:
Explicitly that it said that no under California law citing a California civil code section Identical in substance to the Florida section at issue here said there's nothing in the section that requires apportionment You're dealing with the unified structure.

[00:07:48] Speaker 00:
This is a perfectly permissible theory so in that way our case is fully set aside from from o2 micro and and in fact in that case as we as we mentioned in our briefs and

[00:07:59] Speaker 00:
Thinking about just the purpose of rule 702, right?

[00:08:02] Speaker 00:
Federal rule of evidence 702 and the need for expert testimony.

[00:08:07] Speaker 00:
That's required in very limited cases, right?

[00:08:11] Speaker 00:
Only where the jury could not possibly comprehend something without the assistance of an expert.

[00:08:15] Speaker 00:
It's permissible in a wide range of other cases.

[00:08:17] Speaker 00:
This is a case in which, sure, it was permissible, but it was by no means required.

[00:08:23] Speaker 00:
Very different when you're dealing with a complex

[00:08:26] Speaker 00:
Frankly impossible to understand what they are trade secrets at issue in o2 micro Are you saying that would would have not been possible to break out?

[00:08:39] Speaker 04:
To a portion each trade secret with respect to the amount of mr.. Ratner the images were unjust enrichment and

[00:08:46] Speaker 00:
Sure.

[00:08:47] Speaker 00:
Mr. Ratner, the expert, did testify that actually in this type of integrated software bundle, it is not appropriate to do that type of analysis.

[00:08:55] Speaker 00:
And even still, when we look at, he didn't just give the jury numbers.

[00:08:59] Speaker 00:
Mr. Ratner gave the jury explanations, conceptual explanations for each category of unjust enrichment.

[00:09:06] Speaker 00:
So saved costs was measured in terms of person hours, right?

[00:09:09] Speaker 00:
The jury was actually looking at a number of hours over time that people worked or didn't work.

[00:09:15] Speaker 00:
As far as Head Start, it was done on basically a matrix, 12 months, 18 months, 24 months, and 2, 3, and I believe 5 million dollars.

[00:09:25] Speaker 00:
So there was this whole matrix of possible numbers with that 8 million and change being the midpoint.

[00:09:31] Speaker 00:
So in this case, the jury really did get a lot of information.

[00:09:35] Speaker 03:
How did he quantify unjust enrichment?

[00:09:38] Speaker 00:
Unjust enrichment was medallious profits achieved by the misappropriation.

[00:09:44] Speaker 00:
So that was at least as the ill-gotten gains component.

[00:09:49] Speaker 00:
So it was the ill-gotten gains from medallious profits.

[00:09:52] Speaker 00:
It was the person hours saved in saved costs.

[00:09:55] Speaker 00:
And then in head start, it was that matrix of how long and how much are you saving.

[00:10:01] Speaker 00:
So the jury really had a lot of information to work with.

[00:10:05] Speaker 04:
Let me ask you this.

[00:10:10] Speaker 04:
So the jury has all this information, has the expert's testimony from both experts, goes back into the jury room and starts answering the special verdict form.

[00:10:24] Speaker 04:
And they conclude that of the, I guess there were eight or nine, I can't remember now exactly,

[00:10:31] Speaker 00:
Nine trade secrets.

[00:10:32] Speaker 00:
Two had been removed.

[00:10:33] Speaker 04:
Two had been removed, okay.

[00:10:35] Speaker 04:
And they say, they fail to, you know, they conclude that with the exception of trade secret six, that the plaintiff failed to meet its burden of proof.

[00:10:49] Speaker 04:
And so they find no trade, I forget exactly what they did, but they found no protected trade secret.

[00:10:55] Speaker 04:
Right.

[00:10:56] Speaker 04:
Okay, so now they're, and they've got all this information on damages.

[00:11:01] Speaker 04:
So the district court kind of had its theory about what the jury did.

[00:11:08] Speaker 04:
What is your explanation for what the jury did?

[00:11:12] Speaker 00:
Our explanation is simply that the jury looked at the total damages amount

[00:11:16] Speaker 00:
looked at the evidence regarding the role, the importance of trade secret six, that it was the heart of everything, that it was the most important trade secret without which everything else could not function, looked at the expert testimony saying that that is relevant to determination of damages and that it's appropriate even to award all if the primary value drivers remain in play.

[00:11:36] Speaker 00:
And they worked from that and they decided to apportion between trade secret and non-trade secret factors, which juries

[00:11:42] Speaker 00:
under both the Georgia cases and the federal cases are entitled to do, to look at trade secret and non-trade secret factors.

[00:11:49] Speaker 00:
You see it in White.

[00:11:50] Speaker 00:
You see it in Trotman.

[00:11:52] Speaker 00:
You see it in Russo.

[00:11:54] Speaker 00:
You see it in, actually, in Cawdill.

[00:11:58] Speaker 00:
They actually just awarded the full profits.

[00:12:00] Speaker 00:
They didn't even apportion.

[00:12:01] Speaker 00:
Cawdill won trade secret out of four, and they afforded the full profits, and that was affirmed.

[00:12:06] Speaker 04:
Your time is running out, but let me ask you on the motion for a new trial.

[00:12:10] Speaker 04:
Yes.

[00:12:11] Speaker 04:
What do you have to say about that?

[00:12:13] Speaker 00:
Sure.

[00:12:13] Speaker 00:
I mean, it's certainly an unusual circumstance.

[00:12:15] Speaker 00:
But in this case, it's the fact that it is a novel issue of law, as the court recognized, right?

[00:12:21] Speaker 00:
Before trial, it said that it was for the jury to weigh the admissible evidence at trial on this issue.

[00:12:27] Speaker 00:
So before trial, the court approached this like ATS, or excuse me, ATS and Blade Room, where the court said, we don't need expert apportionment testimony.

[00:12:36] Speaker 00:
Then in the middle of trial, the court kicked out two trade secrets.

[00:12:40] Speaker 00:
And even still said, I think it's more of a jury verdict and instruction issue.

[00:12:44] Speaker 00:
So at that point, the court had not decided that the law was, it needs to be all or nothing.

[00:12:50] Speaker 00:
And only after trial did the court reverse course.

[00:12:54] Speaker 00:
no longer acknowledge that this is a novel issue of law and basically say that this has been established all along.

[00:13:00] Speaker 00:
But of course, you know, the court had the right to, the power to reserve that ruling until the end of trial, but the pivot from mid-trial when two were already gone, so the court's reasoning was an equally applicable mid-trial.

[00:13:12] Speaker 00:
So to save that pivot for the end of trial really underscores what a left turn this was.

[00:13:18] Speaker 00:
And then as far as a new trial being available to avoid a miscarriage of justice, $25.7 million, including $14 million in punitive damages, for this willful and malicious theft.

[00:13:30] Speaker 00:
They lied to get access.

[00:13:34] Speaker 00:
It's just a miscarriage of justice.

[00:13:35] Speaker 03:
Exactly.

[00:13:36] Speaker 03:
What remand or what order would you like us to make?

[00:13:39] Speaker 03:
Reinstate the verdict or what?

[00:13:44] Speaker 00:
Reinstate the verdict.

[00:13:46] Speaker 00:
The whole verdict?

[00:13:47] Speaker 00:
The whole verdict.

[00:13:48] Speaker 00:
Yes.

[00:13:48] Speaker 00:
Reinstate the compensatory damages verdict, which would in turn reinstate the punitive damages verdict.

[00:13:54] Speaker 01:
All right.

[00:13:55] Speaker 01:
Let's save some time for rebuttal.

[00:13:56] Speaker 00:
Thank you.

[00:14:11] Speaker 02:
Thank you, Your Honor, and may it please the Court.

[00:14:12] Speaker 02:
Chris Michelle for Appellee Medallia.

[00:14:15] Speaker 02:
EchoSpan brought this case based on a bundle of nine asserted trade secrets arising from a software product that had been widely disclosed.

[00:14:23] Speaker 02:
The district court and the jury together concluded that eight of those nine trade secrets were not trade secrets.

[00:14:30] Speaker 02:
The court then correctly granted judgment as a matter of law to Medalia because EchoSpan, despite multiple warnings and an opportunity in its rebuttal case,

[00:14:38] Speaker 02:
gave the jury no sufficient basis, no causal connection, as Judge Baia put it, to apportion relief to the sole remaining trade secret.

[00:14:46] Speaker 01:
I mean, why didn't the District Court do this before the jury got it, if that was true?

[00:14:51] Speaker 02:
I think the District Court could have done this after throwing out the two trade secrets at Rule 50A.

[00:14:57] Speaker 02:
Instead, the district court in an abundance of caution gave EchoSpan an opportunity in its rebuttal case to try to prove apportionment, but they failed to do that.

[00:15:07] Speaker 02:
I think the same result follows afterward.

[00:15:10] Speaker 04:
What case do you cite, do you rely on to argue that apportionment was required?

[00:15:17] Speaker 02:
Well, I would give two answers, Judge Paias.

[00:15:19] Speaker 02:
First, the general principle that a jury must have a sufficient evidentiary basis for any form of monetary relief that's established in decisions from this court, like Harper and Yeti.

[00:15:30] Speaker 02:
And then it's applied to this particular context of a multiple trade secret case.

[00:15:35] Speaker 02:
All of the courts that have addressed this issue, I'll concede they're mostly district courts.

[00:15:39] Speaker 02:
The O2 micro decision from the Northern District of California, the Versada decision from the Eastern District of Michigan have all said that there's a straightforward rule.

[00:15:46] Speaker 02:
When you have multiple trade secrets, you as the plaintiff can decide to introduce a damages theory.

[00:15:52] Speaker 04:
Not required, though.

[00:15:54] Speaker 02:
Well, you have to make a choice.

[00:15:55] Speaker 02:
What's required is a choice.

[00:15:56] Speaker 02:
You can proceed on an all or nothing theory, and if you prove all the trade secrets, then you can collect all the damages.

[00:16:01] Speaker 02:
or you can proceed on an apportionment theory, and if you don't get liability on all the trade secrets, there's a sufficient evidentiary basis for the jury to award relief on the subset.

[00:16:12] Speaker 02:
The plaintiff has to make that choice.

[00:16:13] Speaker 02:
The plaintiff in this case knew that.

[00:16:15] Speaker 02:
It made the choice to proceed all or nothing.

[00:16:17] Speaker 02:
There's nothing wrong with that choice in the abstract, but it does have consequences.

[00:16:21] Speaker 04:
Now, the judge, the district, I forget who the judge was.

[00:16:26] Speaker 04:
Judge Cousins, yes.

[00:16:27] Speaker 04:
Judge Cousins.

[00:16:28] Speaker 04:
He didn't quite put it in those words, too.

[00:16:30] Speaker 04:
to plaintiff?

[00:16:32] Speaker 02:
Well, I think there was no dispute all along that there was this choice that had to be made.

[00:16:39] Speaker 02:
We, of course, made clear from the beginning that the lack of apportionment was going to be one of our defenses if the plaintiff ended up proving fewer than all of the trade secrets.

[00:16:51] Speaker 04:
We have pretty strong case law.

[00:16:57] Speaker 04:
It's pretty much true in the state courts as well.

[00:17:01] Speaker 04:
that you do everything possible to reconcile jury verdicts with the evidence.

[00:17:08] Speaker 04:
And that's because, you know, we bring these people in and charge them with the responsibility of being finders of fact and to determine liability and damages.

[00:17:20] Speaker 04:
And you just don't want to throw it out, right?

[00:17:24] Speaker 04:
That's why I can't why can't this is counsel just argued why can't this?

[00:17:29] Speaker 04:
Result here the jury's verdict which was half of what the experts testified to why can't it be reconciled here?

[00:17:35] Speaker 04:
There was plenty of evidence in the record about the importance of this particular trade secret Let me offer you know the jury the jury could have you know it could have been they could have found you know all these other trade secrets as protected

[00:17:54] Speaker 02:
The the expert testifies to x y and z right and they could say well now we're only gonna we're gonna cut we're gonna cut 30 percent Let me give you a couple of that a couple of things judge pious first This is the unusual case in which the damages expert the witness that the plaintiff put on to establish its damages case

[00:18:15] Speaker 02:
said in terms, and this is at page 1498 of the excerpts of records, if the jury finds fewer than all of the trade secrets, liability on all the trade secrets, the jury will have, quote, no way to figure out from my calculation what the damages should be.

[00:18:29] Speaker 02:
That's an unusual concession, and it's an important one in this case, because, of course, the jury did go on to find liability on fewer than all the trade secrets.

[00:18:38] Speaker 02:
That sort of hypothetical that the damages expert gave became reality.

[00:18:43] Speaker 01:
I mean, that gets at sort of a question that I was asking your friend across the aisle.

[00:18:47] Speaker 01:
Even if the expert says you're not going to find the answer of how to apportion this in my calculation, that doesn't mean that the record is devoid of tools for the jury to do this analysis.

[00:18:56] Speaker 01:
So why do you think that there was nothing for the jury to wrestle with or work with to make that decision?

[00:19:01] Speaker 02:
Sure.

[00:19:02] Speaker 02:
So I agree with you as a categorical matter.

[00:19:04] Speaker 02:
We're not submitting that there has to be expert evidence.

[00:19:06] Speaker 02:
but there does have to be evidence.

[00:19:08] Speaker 02:
And here, really once you put the expert aside, which was of course their primary damages argument, once you put the expert aside, I think what they're relying on is a handful of statements from the founder of EchoSpan, Mr. Vance, in the rebuttal case, where he says things like, trade secret six was the head of the octopus or the core or the heart of the product.

[00:19:30] Speaker 01:
Couldn't they also sort of make that judgment themselves after seeing demonstrations of this

[00:19:36] Speaker 01:
System and see that trademark six was sort of more important than the others so I I think the demonstration Didn't you know really didn't go to the damages issue?

[00:19:46] Speaker 02:
But I do want to I think there's an important point there Which is that and I think judge Bay I mentioned this in the topside argument the relief here is unjust enrichment my friend And I agree on that the measure of unjust enrichment is its value to medallia the defendant and

[00:20:00] Speaker 02:
And all the testimony that they've referred to, including that demonstration, is about the importance of TradeSecret6 to EchoSpan's product.

[00:20:07] Speaker 02:
He's saying it's important to our product.

[00:20:10] Speaker 02:
But that, by definition, does not speak to its value to Medallia.

[00:20:14] Speaker 02:
As my friend discussed, there were three categories of unjust enrichment.

[00:20:18] Speaker 02:
Medallia's profits, saved costs, and Head Start.

[00:20:22] Speaker 02:
All of those measures of unjust enrichment depend on what was going on inside Medallia.

[00:20:27] Speaker 02:
How much of a Head Start did it get?

[00:20:28] Speaker 02:
How much cost did it save?

[00:20:30] Speaker 02:
What were its profits?

[00:20:31] Speaker 02:
Statements about the value of the trade secret to EcoSpan simply don't address that issue.

[00:20:37] Speaker 02:
Of course, how does a plaintiff normally address that issue?

[00:20:40] Speaker 02:
Through a damages expert, and the damages expert here

[00:20:42] Speaker 02:
tried to do that, except we have this unusual situation where the damages expert, by his own admission, didn't provide evidence that the jury could rely on.

[00:20:51] Speaker 02:
So there is, with respect, a real gap on the fundamental question of how to calculate the unjust enrichment.

[00:20:58] Speaker 01:
Your position is the only other evidence that they had to work with is the statements from echo spans people.

[00:21:03] Speaker 02:
I mean, they could rely on anything in the record.

[00:21:06] Speaker 02:
I just don't think there's anything in the record that supports it, and I think my friend is relying on those statements, so I wanted to take those on.

[00:21:11] Speaker 04:
Let me ask you this.

[00:21:12] Speaker 04:
When you prepared the, whoever prepared the special verdict, why wasn't there a question, why wasn't there an instruction?

[00:21:20] Speaker 04:
Because a special verdict is a form of an instruction.

[00:21:23] Speaker 04:
Why wasn't there an instruction that if you don't find

[00:21:29] Speaker 04:
violation of all the If you don't find if you do not find that that all of the trade secrets are protected Then you're to award no damages I Believe we asked for that instruction.

[00:21:47] Speaker 02:
I believe we did ask for that instruction in the district court didn't give it I don't although I think the district court

[00:21:52] Speaker 02:
correctly set out the law, nevertheless, it wasn't required to give that instruction.

[00:21:57] Speaker 02:
It's possible that it could have been clearer, but that the instruction could have been clearer.

[00:22:02] Speaker 02:
But I think the principle is still established by this court's cases, and in particular... Just under that principle, why shouldn't they get a new trial?

[00:22:12] Speaker 02:
Well, they shouldn't get a new trial because I think there's no legally sufficient basis in the record.

[00:22:19] Speaker 04:
Maybe if they had been told, I mean, if they knew at the outset what they had to do, they would have met that burden.

[00:22:24] Speaker 02:
With respect, Judge Pais, I think they did know at the outset, based on the legal principles that- At the outset, before trial, the district court told them otherwise.

[00:22:33] Speaker 02:
I have to disagree with that premise.

[00:22:35] Speaker 02:
The district court never said anything like you don't have to apportion in this case.

[00:22:41] Speaker 02:
Quite to the contrary, the district court allowed the testimony from Mr. Ratner, but he

[00:22:48] Speaker 02:
recognized that there could be argument on what to draw from that.

[00:22:53] Speaker 02:
And then he could not have been clearer when he granted the Rule 50A motion that they had, quote, a big problem because they had now lost some of the set of trade secrets and yet had a damages theory that relied on all of the trade secrets.

[00:23:07] Speaker 02:
There is nothing wrong with proceeding on all or nothing damages theory.

[00:23:11] Speaker 02:
That is a strategic choice that litigants are entitled to make.

[00:23:14] Speaker 02:
But they do have to live with the consequences of that choice if they don't prove all of the trade secrets.

[00:23:19] Speaker 02:
And of course here, not only did they not prove all of the trade secrets, they only proved one of the nine trade secrets.

[00:23:25] Speaker 02:
We submit that O2 Micro is pretty much, as Judge Cousins said, a dead-on bullseye for this case.

[00:23:33] Speaker 02:
It's fair to say the leading opinion in the nation on this question about apportionment in multiple trade secret cases.

[00:23:40] Speaker 02:
We recognize it's a district court decision, but I think it's a well-reasoned district court decision from the Northern District of California.

[00:23:47] Speaker 02:
It's been cited all over the country.

[00:23:48] Speaker 02:
It's been relied on in the Prasada case.

[00:23:50] Speaker 02:
It was relied on in the Sixth Circuit in the Cottle case.

[00:23:52] Speaker 02:
It's been relied on by the trade secret treatises.

[00:23:55] Speaker 02:
And most importantly, I think it's an application of the fundamental principle that there has to be an evidentiary basis.

[00:24:04] Speaker 04:
Doesn't that make it almost impossible for a plaintiff with a trade secret to prove?

[00:24:11] Speaker 04:
Not at all.

[00:24:11] Speaker 04:
But they have like, just like this one, this was like an integrated whole.

[00:24:15] Speaker 04:
So a couple of responses.

[00:24:16] Speaker 04:
First of all, not at all.

[00:24:18] Speaker 04:
It's common.

[00:24:19] Speaker 04:
You shop around and you find an expert who's willing to testify.

[00:24:22] Speaker 04:
Well, I guess people do that anyway.

[00:24:24] Speaker 04:
You just shop around and you find an expert who's willing to support your theory and get up and testify.

[00:24:31] Speaker 04:
Correct?

[00:24:32] Speaker 02:
I think if there's a good faith basis for that kind of expert testimony, of course, that's what plaintiffs should do, and they do that frequently in trade secret cases.

[00:24:40] Speaker 02:
I want to respond to a part of your question that my friend mentioned also, and that's this unified structure theory.

[00:24:46] Speaker 02:
This is a critical point.

[00:24:47] Speaker 02:
Judge Cousins found, and I think it's absolutely correct, that this cannot be considered a unified structure.

[00:24:54] Speaker 02:
And the reason is that trade secret five, that's the trade secret that was thrown out at the Rule 50A stage,

[00:25:00] Speaker 02:
is not integrated with the rest of the product.

[00:25:02] Speaker 02:
The rest of the product has to do with how a client uses the employee review software.

[00:25:11] Speaker 02:
Trade secret five has to do with how EchoSpan manages its clients.

[00:25:15] Speaker 02:
It's called the client management portal.

[00:25:18] Speaker 02:
And this is a little bit in the weeds, but Judge Cousins lays this out in detail at pages 25 through 27 of the excerpts of record when he's issuing his post trial decision.

[00:25:27] Speaker 02:
and Mr. Vance conceded during his testimony that Trade Secret 5 was separate from the rest of the product.

[00:25:34] Speaker 02:
He also conceded that other features of the product, some of the other individual trade secrets like 7 and 8,

[00:25:39] Speaker 02:
separately drive values.

[00:25:41] Speaker 02:
So this unified structure concept simply doesn't work with the evidence here.

[00:25:44] Speaker 04:
So let me see if I understand that in a different way, which is that because in your view it wasn't a unified structure, Medallion could just go in and take whatever it needed to enhance its own software.

[00:25:59] Speaker 02:
Not at all, Your Honor.

[00:26:00] Speaker 02:
Not at all?

[00:26:01] Speaker 04:
If the jury had found... So you didn't have to go in and snatch the whole thing and merge it with yours.

[00:26:06] Speaker 02:
If the jury had found that these were secret, remember the jury on six of the seven remaining trade secrets when it got to the jury, found that they were not secret.

[00:26:14] Speaker 02:
So if something is not secret, there's not a trade secret violation if you go in and snatch it to users.

[00:26:19] Speaker 04:
Well, they were a little bit troubled with what you did because they did award punitive damages.

[00:26:23] Speaker 02:
They did award punitive damages?

[00:26:25] Speaker 04:
I mean, you don't award punitive...juries don't award punitive damages just, you know, willy-nilly.

[00:26:30] Speaker 02:
I don't know, but that is a categorical matter.

[00:26:33] Speaker 02:
But in this case, I don't think the punitive damages are.

[00:26:35] Speaker 04:
Well, the court's not going to instruct them on punitive damages unless there's some evidence, correct?

[00:26:40] Speaker 02:
That's right.

[00:26:40] Speaker 02:
We dispute the punitive damages were available, but I think everybody agrees here that if the unjust enrichment award for trade secret six falls, the punitive damages award has to fall, has to fall too.

[00:26:52] Speaker 02:
And so our principle submission is that there is no evidentiary basis.

[00:26:58] Speaker 02:
There's no, in the, in the text of the statute, Judge Bea, it says that the unjust enrichment has to be caused by the trade secret misappropriation.

[00:27:06] Speaker 02:
18 USC 1836 B3B.

[00:27:10] Speaker 02:
So this causation requirement is there.

[00:27:12] Speaker 03:
But isn't there evidence from which the jury could find that simply stealing number six can cause the damages?

[00:27:21] Speaker 02:
There was nothing in the record, this is the critical point, there was nothing in the record that would allow them to find that.

[00:27:26] Speaker 02:
Remember that the damages expert said that if there were fewer than all they would have no way to figure it out.

[00:27:31] Speaker 03:
The way of figuring out his calculation, but not necessarily not figuring out another calculation I mean they could have just taken that the requested twenty three point four million in Compensatory damages and said plaintiff is exaggerating this will give him fifty percent eleven point seven, but I don't think so your honor It may have happened once or twice in the history of jury

[00:27:59] Speaker 02:
I do think there has to be some basis in the evidence for the verdict.

[00:28:05] Speaker 02:
I think just arbitrarily cutting it in half would be the kind of conjecture or guesswork or speculation that this court has consistently said is not enough.

[00:28:16] Speaker 02:
I will say this 50% theory and this

[00:28:19] Speaker 02:
is something that my friend respectfully didn't raise in the district court and raises here for the first time.

[00:28:25] Speaker 02:
And there's a good reason for that.

[00:28:27] Speaker 02:
The best way to understand the verdict form itself is that the court, that the jury awarded all of the head start and saved costs awards.

[00:28:36] Speaker 02:
And we go through that in our brief.

[00:28:39] Speaker 02:
But in that case, there's no 50% cut.

[00:28:42] Speaker 02:
And this is how Judge Cousins understood it too.

[00:28:44] Speaker 02:
And his reading of the verdict is entitled to deference under cases like service employees.

[00:28:49] Speaker 02:
That's an important point, because understanding the verdict that way means there was no apportionment, no 50% cut.

[00:28:54] Speaker 02:
They did exactly what they were not allowed.

[00:28:56] Speaker 01:
That's the point of just sort of like, how can we know one way or another?

[00:28:59] Speaker 01:
And if it's possible that it's not that reading and it's the reading that Judge Bay had just advanced, then don't we have some sort of reasonable basis for this jury verdict that we can't touch?

[00:29:09] Speaker 01:
I mean, you talk about deference to the district court, sure, but deference to the jury is a big deal.

[00:29:14] Speaker 02:
I understand that point, but there would still need to be something in the evidence that would support this 50% cut if that's how you want it.

[00:29:22] Speaker 01:
And the something in the evidence, I guess, is sort of the point that I was talking about with your friend across the aisle.

[00:29:27] Speaker 01:
You find less than all the violations.

[00:29:29] Speaker 01:
You award less than all the damages presented.

[00:29:32] Speaker 01:
Some sort of correlation.

[00:29:33] Speaker 02:
Right.

[00:29:34] Speaker 02:
But I think the problem is there's nothing that allows the jury to get to this number.

[00:29:38] Speaker 02:
There's certainly 50% was never mentioned until this court.

[00:29:41] Speaker 02:
So that couldn't be what it was, and with respect

[00:29:44] Speaker 02:
There was just nothing else in all of the rest of the record that would lead to this to this 50% result Thank you

[00:30:03] Speaker 00:
All right, your honors, I would like to talk quickly about the unified structure issue.

[00:30:07] Speaker 00:
I would like to give an example here.

[00:30:09] Speaker 00:
We probably all use either Microsoft Windows or Apple operating system.

[00:30:15] Speaker 00:
There's a lot of portions of that operating system that are user-facing, right?

[00:30:19] Speaker 00:
But also on the back end, Apple and Microsoft can do things too.

[00:30:23] Speaker 00:
They can push through security patches, updates.

[00:30:26] Speaker 00:
Windows is an integrated software program.

[00:30:28] Speaker 00:
It is a unified structure.

[00:30:30] Speaker 00:
That's what we're dealing with here.

[00:30:32] Speaker 00:
So just because one portion was EchoSpan facing doesn't mean it's not a unified software system.

[00:30:39] Speaker 00:
I'd also like to bring the court's attention to the standard in Georgia under the Kenton Plaza case that only where there's a complete absence of competent evidence on the issue of damages can you take that away from the jury.

[00:30:50] Speaker 00:
That's not what we have here.

[00:30:52] Speaker 00:
In fact, that's the identical to the lenient standard in Cawdill.

[00:30:56] Speaker 00:
A case in which one out of four trade secrets was found to have been misappropriated, but because it was incorporated into the offending products, four products, the plaintiff got all of the unjust enrichment without apportionment.

[00:31:12] Speaker 00:
At the end of the day, the judgment is within the evidence shown under all of these cases in Georgia law and federal law.

[00:31:21] Speaker 00:
I think you just must reverse.

[00:31:24] Speaker 01:
All right.

[00:31:25] Speaker 00:
Thank you.

[00:31:25] Speaker 01:
I think council for their helpful arguments, the matter of echo span versus medallia is submitted.