court properly granted summary judgment the second is whether the forest district court properly struck all three of sensational expert witnesses this case is a little unusual in that there were two summary judgment motion also should take into consideration they care a suspicion because we have to district court judges list looking at essentially the same facts i read the expert witnesses are different but the facts of the case are the same and they came to radically different decisions and we  of projects that were commercialized and so the court made an error beginning that just manifests also we asked for reconsideration with respect to the striking of judge sand and in along with that because for reconsideration we included a declaration from her that declaration shows that she has twenty five years of experience working in the field she worked for big companies like gerber pillsbury kraft general foods she has actually seven different projects  commercialized brought the commercial position she also wrote a book called the packaging value chain which explains how you do commercialization and when we presented all this information to judge far as on our motion for reconsideration we got back on one page decision and the judge did not address these qualifications at all simply didn't respond one way or another what she did then was to move on to methodology saying that judge sands had no methodology well we believe that she did have a methodology which is a methodology that's based on experience she had this twenty five years experience she looked at the facts of the case she compared them to her experience and she then rendered a series of opinions throughout a report and we believe that if you look to the advisory notes to section seven zero two they visor notes particularly say that were experiences the background the quote the method is the application of experience to the facts that's precisely what dr sands did so she did have a methodology the methodology is confirmed in the advisory opinion i mean advisory roles and is also confirmed in the  so here you have the court again making another error and terms of how to treat this case i can mention that also in terms of methodology that same experience methodology was used by judge had started by dr cadwallader so she applied both she essentially created this kind of gauntlet for our expert witnesses and she ran all of our witnesses through the gauntlet and pepsi's expert witnesses got to wave around the the gauntlet because their expert for example dr there's a very small likelihood that this product would have been commercialized but that's a major hurdle for you we believe if she had considered the evidence she would not come to that conclusion there starting face to that all of the problems that we had been solved that this project in four months was to be prepped to launch this was the understanding of both coke and pepsi but she struck it as being hearsay on the basis that she thought it was created by a sensational employee when it wasn't in fact we had pointed out to the court in a statement of fact thirty five are entered the pepsi statement of fact that thirty five that it had been done by a coke employee who even cited to a document appendix forty two thirty which is an e mail from a coke employee distributing the memo to other people and also repeating some of the same things that is in the memo that essentially it is we're ready pepsi patent and i noticed for i read it correctly pepsi hasn't commercialize this product that's true they were accused of  tried to do it on their own and they failed miserably trying to do it on their own and that's why they didn't commercialize it and what the panel here is that even though they didn't commercialize they put it in patent applications so the information became published and it was during that same week from september twelfth through to september twentieth with all of this good information about both coke and sensational being ready to commercialise suddenly came to an end when the coke legal department found the  patent application that i know the judge says well there's no way of showing whether or not that application caused to be terminated but that's simply not true and that period from september twentieth through to november sixteenth when it was finally terminated there is a series of e mails back and forth between the parties and it only thing they are discussing is the pepsi application the fact that they asked for indemnification what happens if pepsi sues that fit the only thing they were concerned and ultimately the ter minator the project said that the risk was too high for codes internal problems if you look to also the issue of damages the district judge said that they were all s believe that this record in fact misunderstood the law the law in the second circuit is that if the plane of demonstrates a genuine issue of fact as to the existence of actual damages then summary judgment is inappropriate even if the price the precise amount or extent of damage is somewhat uncertain or speculative and so we had a quantum of damages judge forrest ferrous keris and actually said those were huge there's a quantum of damages that you've established we also had the project p two of the project was understood quantum that scarce referred to he did not specifically identify you just looked at the overall evidence that we presented and said you've established they entitled to a quantum of damages not necessarily to the certain amount that your expert witnesses said but i can give you some idea even after the case was put on legal hold the coke management asked us to continue in the phase two even without an agreement and our people did that when the whole was finally turned into a terminations and september it ended we actually got paid for that part of the work but we didn't get paid for completing that phase two part of the project it is clear beyond a reasonable doubt that but for this interference we've got the rest of the money for phase two and that's well over one hundred thousand dollars so that's a quantum of damage that gets us past summary judgment and gets us to the point where we can talk about trying to establish what our total damages are but isn't there i mean you're asking for a lost problem yes long right i'm sorry you were asking for a last profit yet in this case probably will we were asking for what we lost as a result of the  misappropriation it includes the loss of profit from the completing of phase two as well as the loss of profit from the commercialized product and in terms of what we had to show for the commercialized product on september twentieth sensational internally calculated what kind of income they would get based on the information in the memo of september twelfth and they came to numbers that would support a figure of like ten million dollars per year eventually as a stream of income for them with this project that's the kind of information where it's done internally as part of the business of the company that a an expert can rely upon in order to term what the  in order to determine the amount of money that they can be covered a brief comment on our expert or our damages expert it was said that he had the methodology but his deposition he had then to fight the methodology didn't used it was said that he relied only on dr sands and the client he actually took the clients information including their tax records and reviewed them completely before making his determination the one issue may be that this counting he said in his report yes the number that i get needs to be discounted but i can't tell how to discount it now relying on this court's decision in the energy capital case it's said that discounting is done as of the time of the judgment and at that time there was no judge and so he couldn't follow the rules address the argument that he raises with respect to her background however again you just need to look to her opinion at appendix thirty six through thirty seven where she talks specifically about the d has experience or experience at craft and how that did not constitute experience and also aspects of successful commercialization she was digging into the c v she was digging into the background of the expert to look at the qualifications she also independently look at in an independent step look to the methodology with respect to commercialization about that that was unacceptable as well that there was too much factual narrative there is too much looking at things like the motives of the parties and the like and make those determinations again by looking carefully at the facts and ensuring that believe approximately sixty pages of opinions with respect to the daubert issues that's with respect to sand and i made a point with respect to sans methodology in talking about sand in terms of basing her expertise her on her experience and i think he does look to the correct place which is the advisory notes to  federal rule of evidence seven o two that were adopted in two thousand but what mr garner did not mention or talk about was how specifically there are three requirements talked about in those knows it's been adopted by courts in the second circuit talking about how that expert if they're going to rely on experience has to tie that experience to the conclusion that is reached has to talk about why that experience is sufficient and then has to explain how that experience reliably applied to the facts that was not done here instead the trial court at great in great detail by breaking in the seven categories of testimony that dr sand had undertaken went through each one to look at whether or not dr sand had put forward the right type of analysis thoroughness and whether or not if she was going to base it on experience tired out in the way that those requirements are discussed excuse me of the rule of evidence seven of two were discussed in resolution and elsewhere with respect to rely on the damages expert which i think it was his final point just a reminder to the court that what she did for that with the trial court did was found that his methodology was unacceptable because in two ways what he did was he did not account for risk he did not account for risk he basically cherry picked from two different methodologies the damages experts oftentimes use with loss profit but he didn't use those portions that are the check the check that look to basically account for risk but that doesn't have to be your pred final for striking this damages expert didn't really cover that he said right i believe that the judge would address the development fees issue in the summary judgment motion but let me do it here and now the alternative so when we turn in the summ quick points to one they are characterizing those as lost property and if they're going to characterize it as was proper damages up to two issues or two problems with with what they're doing the first is they have put forward no evidence that it was agreed to in terms of a contractor type of thing setting out the obligations going forward but more fundamentally even that is if they're claiming it's lost profits they put forward no evidence showing with the cost was with respect to this development fees or what the profit lost profit might have been having created lost profits nationally and all situation where you have sales corrector here there were never any sales believe it was mentioned in since ational summary judgment brief your honor but in doing so the this court has the opportunity under the rays in the context of being  proportional loss profit they called sensational maintains that they are seeking i believe exclusively lost profits in this case they do not characterize the development fees as actual damages your honor it's in the portion of their brief that's talking about lost profits compared to the seventy three million dollars being sought of lost profits generally we're talking about something that while they market is confidential i refer you to the to the briefing and that it is in the low hundreds of thousands of dollars with respect to this development if you want but that's it nonetheless if they have raised it and if as you suggested earlier that judge addressed it and presumably rejected that as a basis for the coverage then it puts a diff the case in a different light than what it might be if all we were talking about is the lost profits in the conventional sense of that term they have they have rather different it seems to me arguments with respect to face to payment versus whatever would have happened after commercialization if commercialization fair enough in terms of the distinction but if they're going to create a distinction on the development fees for phase two and they're going to characterize it as lost profits in order to create a material issue a fact on that issue they need to put forward evidence of what the profit was a material issue of fact that there was some profit gained or some evidence with respect to what their cost was going forward they put forward an unsigned agreement that basically lists out that they drafted that there is no evidence in the record was agreed to definitively by coca cola for going forward and they're going to use that as a lost profit lost profit and that was used seems to me not nearly as important as the substance of what was going on now i thought the substance of what was going on is there was not a signed agreement with respect to phase two but there was an understanding between the parties that phase two would continue and phase two apparently did continue and they continued to be paid for phase two until the term the nation and september twenty second letter it was then they have an argument that the in all likelihood they would have at least been able to complete phase two and been paid for i think difficulty again is there's two or three difficulties one is with respect to the doctrines that they base that on whether that provides a proper basis for creating a material issue of fact on that the second is as to whether or not again that characterizes lost profits and how they're going to create a material issue of fact on it and whether they've properly raised that issue they have not raised that issue as an actual damages issue in their briefing and talked  what they claim to be lost profits i believe mr garner did that today i don't know that it's terribly helpful to be saying that they call that the wrong thing if they made perfectly clear what they were they were asking for and that seems to mean that the what we are tending to ok if they get the wrong let's let's go with all the assumptions that they got it right or that they're getting the right place they still have to put forward a material issue a fact with respect to the creation of the agreement the performance it would take place and what their profits would be agreed with with respect to creating a material issue of fact on summary judgment and they haven't done that here they make reference to the agreement they don't make any claim in terms of what those damages are they say that they claim that they should be entitled to the full amount of the  of of the development fees that they that they were going to go forward to get but that never took place and they claim all of it and not the profit that would result from it that sounds like a breach of contract claim it does this and it sounds like a breach of contract claim really for actual damages and again this is what we were dealing with with respect to their arguments but there were trade secret claims end in the alternative breach of causation point before turning to damages on summary judgment causation there were some characterization characterizations of the record by mr garner and i just like to remind the court of the analysis that the trial court did and citations that she made to the record that included again the really uncontroverted testimony from the coca cola witnesses who were subpoenaed and deposed by counsel for sensational who had testified that at that at the time of terminations the likelihood of commercialization was quote very low talked about how even in that later state where they were talking about things such as prep to launch that it was still very far  out that that would just be the beginning stages that's found in the read brief of page twelve joint appendix thirty one of six above and beyond that another witness mr ronda who testified that the technology never worked so i cannot assume that it was going to work and that can be found at the joint appendix thirty twenty six and in the red brief at pages ten and twenty two finally mr rhonda's testimony  regarding business commitment and that no business unit was committed to the project that's a quote that is found at the joint appendix at three thousand and twenty nine and at the read brief at page forty three so again there is a clear set of evidence with respect to the company that was responsible for in going to be seeing this through to commercialization which was coca cola that in their opinion there were there were significant issues remaining that made commercialization on likely that's why the sand opinion was so important in terms of the dauber that what sam had done taking the thirty five percent likely testimony from the cope with the very unlikely testimony and transform that into a high likelihood of commercialization that's what judge forrest was looking at on the daubert in terms of whether or not to allow her testimony on commercialization to go forward she acted within her discretion to whether they were misappropriated why wouldn't the plaintiffs at least in theory be entitled to nominal damages even if their theory for the recovery of lost profits or the face to damages w i'll get to it i think i've got your question which is so we've got our arguments with respect that we were successful in summary judgment with respect to causation and then independently with respect to damages we had additional arguments at the trial court level with respect to the existence of the trade secret and the misappropriation address addressed you haven't been addressed yet were addressed by the district court and your question is if all four elements are found to to exist in terms of creating a material issue of fact to go to a jury would they be entitled to nominal damages well if if the elements of misappropriate of existence and misappropriation were saps right even in the absence of proof of causation and damages in the form of loss of profits the downstream consequences of misappropriation i think i agree with you in the sense that there is still that the fundamental causation problem that they are seeking recovery for an injury that they claim is a result of the misappropriation of the existence of the trade secret and they have to make that link the point that we were making below in that we believe should be affirmed here today is that they have failed to create a material issue of fact with respect to that causal link that i've seen it listed in elements by some new york courts and not listed in other elements by other new york courts i've talked i've seen analysis and discussion of it as being necessary for recovery of damages whether or not those making but but if in fact it's true that it is that damages the showing of actual temperature is not an element of the cause of action or misappropriation of trade secrets that would they not be entitled at least to have that question resolved by the court and potentially get nominal then again i don't think if they have failed to show causation i think there would still have to be some kind of link to think i don't think they're i am not aware of the case law that says that their title to nominal damages without creating any kind of link between their existence and misappropriation claim it's hard misappropriation assertion and the injury pepsico that there was no recognizable there was no trade secret in existence and then that there was a second no misappropriation of that trade secret instead that the trial court issued its summary judgment on two independent grounds causation and damage i would like to address some of the issues raised by my worthy colleague of the testimony that mr and mr read that did not actually work on the project he was not at the meeting that was held on september twelfth he talked about issues with the project not working which occurred before september twelfth the very critical nature of this separate them for twelve memo is that it points out the fact that the issues that had been raised before as to whether or not this is a viable project had been overcome and that we were moving on to  commercialization also it should be pointed out that mr gibbs did say he believed that at the time of the term nation the likelihood of commercialization was thirty five percent but look and it was that the bottom coke is at the top of the court pick one sentence that even if it was a pleasure meeting you last week and the court said they simply cannot support an inference of commercial commitment well of course it doesn't but if you read the rest of the email what you see is that both parties agreed that they would together we're going to make the project a great success and the very sentence after that when the president said that he was looking forward to some breakthrough work that is not the mind of a person about to cancel a project it's a person who believes they're going to go ahead with the project and who expects the show this project in january in prep to launch phase there was also an e mail on september twentieth as appendix this legal hold were of a mindset that they were going to continue on and that this was going to be a commercialized product and only four years in only four months away there are some other issues that we should look at  interest the district court improperly struck the testimony of our damages expert yes he looked at the proper information he use a well understood technology well interested methodology and arrived at reasonable figures and he's entitled to rely on an expert report even at that is the expert report of dr sands even if it's contested he still allowed to under the rules to rely on that he's allowed to rely on the client's information that's provided as long as he analyze it and he did so we believe that that's not the correct standard and in terms of the advisory notes that we think that in reviewing the sands as well as the ca opinions you will see that they did precisely what the advisory in those areas will they set forth their criteria they looked at the factors in the record to show what was important in their mind and they rendered opinions based on that that's explicitly what this was supposed to happen center i believe it's broader than that if you read the case but nevertheless that's where we cited it what you have to do is understand that them the commercialization project was so important to cover that even after the legal hold they asked us to continue ahead and to continue to work on it because they believed in the project and compass of the large the largest bottling company in the world they're sophisticated they market i can't mention the number but it's billions of these things that we're talking about and the mister harper said that we put no evidence in you can look at forty one twenty nine  appendix forty one eighty one forty two zero eight through nine and forty one eighty eight and with that basically shows that there was an understanding they just asked to do it their big client we did it and that we sent them a bill at the end of the project and that they paid it's reflected in our income tax statement which is here so and the question is ok what's the cost differential you have two guys doing whatever they can to get this damaged whether it's lost profits with this lost profits from a project we've heard damage and fact our dentist go even wider because they ruined an agreement that we had with coke where if this was successful it was going to rule out through a bunch of products within the code industry and that it's a clear indication of the difference between when damages this speculative oh my oh i'm sorry yes you are