court some in front of this court multiple times on important bankruptcy matters i've been for the supreme court on bankruptcy matters so i know how bankruptcy works and thinks i'm a bankruptcy professor as well and we tend to look for an equitable result the problem in this case jot of this lengthy lengthy record however i understood the mandate of this court to be that the that the judge needed to go back and state a reasoned explanation for the amounts of damages that she had awarded that is correct and the case went back and she wrote a very very lengthy explanation for each amount that she awarded and the district court largely affirmed the only twist being i think attorney's fees  the west not not the virus and what not so yes so that having been done i don't see much in your brief that disputes that she did this or that she did this job so i'm not quite sure why you're complaining here unless it's to say or it is decisions are clear air while that is what i'm saying and i do want to correct some from the truth so judge jones she did not assess the merits of your damages award on appeal and that is therefore why we are here today and if we go through each step each step where she did explain her award she did not comply with the second part of amanda one which was you must have a rational the issue of the value of death toll in property she said i'm going toward four hundred thousand dollars because that's how much mr coleman would make for forty years of future salary at what not well do you did concede that when you talk about these property  logics and that's what mandel once and that's what texas law and i disagree a bit i believe the texas law very clearly says you must prove these damages with reasonable certainty and the district court actually agree with you on that so certainly because of the mandate rule this court is looking at purported to value wiping out one that said it was worth one point five billion dollars for a company that never made a product never got any real investments never generated a dollar of revenue never dreamed of a dollar of profit another expert said like now might could be worth a few hundred million optimistic but i do not find them in a miscible and you're basically saying they were in the midst norma along and she picked the very bottom of the range for everything i do not sure what you're saying is that they didn't there's no evidence to but facebook didn't have any profits google didn't have any profits for years and yet they were valued in the billions of dollars because of the kind of you know i mean that's just the way it is a person these were reputable experts employment contract again texas law could not be cleared you can have them just for fraudulent inducement an employment contract but you must liquidate the future value of that contract to present value and you must induct judge jones whatever mr coleman could for conspiracy than it is for it to have to fight he jones if you were sitting in the first time around and this was the first panel your points would have i think i was sitting the first time around in the first panel i would have been shocked by by the by the number of allegations and causes of action that were sustained and that is why i would have remanded and asked the judge to give reasoned explanation for the damages and that's when we listen to time to look at the record reconsider it knew in light of the guidance of the fifth circuit and come up with reasonable numbers ok so how so then let's look at her million dollar award to mr fresher fifty intellectual property again intellectual property what does she do she looks at a failed state court settlement from ten years ago between differ successful internet companies and that ranges between one million and some high number but taylor also said eighty percent of these companies fail fail period so the reason why she dismissed taylor's opinion the first time around was because she tailored didn't even take into account what the white nile was or would have been successful before we even got into that range now on remand she and again i have unbelievable respect for her as as the panel will know because i've been very hard here damages are fuzzy so i'm going to pick a number within a range this court said you cannot do that bankruptcy judge you cannot pick a number within a range even if it's reasonable you must have evidence and your number must be resolutely related the judge again was erroneous standard is entitled to review the credibility and judge rose in the district court in the first panel said that expert didn't take into account the eighty percent of companies that failed here we go into the other factors in the other evidence again a failed business of software and he tried to manipulate it in monetize it mr coleman and mr fresh are kept out software at all times eleven years have gone by judge and they have not made a red penny from that doesn't mean it doesn't matter your honor it does because it's evidence if that thing never had of value well the point is well worth the damages that when he's when he stole the high pay damages were the value of the software the pig when he stole it and no matter how but instead it said we're convinced they must be damages here and therefore we're remanding for the court to give another explanation that's exactly right and now now that explanation having been given we're given because again in some instances of was lawyer how can you say that the value of the intellectual property stolen in two thousand and six is based on a failed court settlement from three years later between different parties how can you say that the value of that property still when you've got to make some minister men in obviously mr mand must have been pretty stupid if he stole it and thought it had no that you know knew it had no value which is what you're arguing now and that's exactly what you want to be the case he was pretty stupid to have stolen it because it had no value to anyone and noted this court looks at it independently certainly all for your view or well first of these issues i just don't see it as a matter of law as a matter of logic as a matter of anything how one valued stolen intellectual property based on these other things and that's why i tell you i grant that the judge had a difficult time finding the damages model i grant the court should be lenient in looking to recommit was but comes up towards i granted but after all of these years eleven days of trial your hon are going through mental gymnastics instead of having one witness that says the value is x was credible or having one document that the close of the transaction to save the value is why was credible we're having to pick metrics from here in here in here and here and here and here the question of no evidence and said well we can't get off the hook here we were we was we can't get off the hook here and no evidence it's got to go back because no evidence was something that we could have looked at then and should have apparently  you please the court i would like to just address some of those comments or statements of counsel we don't need statements of counsel what we need is did the court comply with the mandate of th and i and you know has made your argument is that the basically all of her conclusions are inconsistent with their findings judge the mandate was clear it's on page nine of the of the book opinion that says we're sending this back so that you can we decide you can explain it or review it and then in the conclusion it said you can have a new hearing if you want one or just do an explanation more importantly your honor was exactly correct the court the prior panel looked at this and said we see four or five damaged theories and apparently the judge has rejected them all actually in paragraph ninety three she only rejected one of them by saying it wasn't helpful the last asset theory she did that in two thousand levon that's going to be important in a second and they said since we we we don't have an opinion that ties theories of recovery for misappropriation the evidence we're going to send back and let judge rhodes try this again your honor she most certainly did she most certainly articulated at least three separate bases including reasonable royalty the value of benefit to mandela from his ownership interest in white and in next floor and the value of next floor which was the replacement for white nile so she did all of  boer suggest to this court that will logic is not the law of texas the logic said look where you have a situation where you cannot place an exact value with reasonable difference actually i think will logic says the law of texas your honor this if there were a difference in texas was actually more strenuous than well logics which applies in this case this would be the texas law and the most recent announcement is southwest energy production company for ninety one southwest third six ninety nine it was decided in sixteen so it was not not available to us back in two thousand and eleven was not available to judge rhodes back in two thousand and eleven southwest says this each case is controlled by its own peculiar facts and circumstances and under heading a actual damages says in texas a flexible and imaginative approach is applied to the calculation of damages in a misappropriation of trade secrets case that's precisely what will logic said well logics was a case where the you had this i p that the court was trying to value and they based it on the destruction of the value of the company because the company was destroyed we argued that same damage model of weight can lead to judge rhodes in two thousand and eleven and i like to claim a crystal ball but that's exactly the way we logics did it and southwest energy in the us or the texas supreme court says that's exactly the way you should do it so in this case judge came the original appeal because this will provide context for how we get where we are here and a few of the things i'm going to say there were two appeals of the damages mr mandella said no liability and zero damages no evidence of damages having not objected to any of the expert boards having let in all the experts come in without a dog bear challenge and have been a valuation by now somebody they say is not a good expert a fellow by the name of peter jackson who was an advisory board member to white tile known to rod martin who came in testified mr jackson they were the advisory management so the other appeal judge came the other pill was we said you haven't given us near enough so when you read judge rhodes opinion she doesn't spend any time trying to explain why it's not zero because the court had already told her it's not zero it reads like why it isn't fifty million dollars because that was our position on remained well i'm not sure i interpret that but it just said right more well  judge jones do this flexible and imaginative report approach that comes from the u s supreme court i don't care what it is i mean my mind my point is simply that she had this wide range of estimates based on the only thing that's troubling is that he flipped her view of the persuasiveness of what they wrote but having was not that she was at the very lowest band of their estimate and i think our pres cite you hear from the sixty's and roe says in this circumstance under that we mean she could we decide that issue and we cited your case from walking into bankruptcy court he doesn't even challenge that so it is something to figure in in our review talk about the damages sure because we're talking in generalities and i want to talk about the four hundred thousand dollars damages based upon the salary of one hundred thirty three thousand dollars for three years that again on a sale admissable opinion testimony placed it at a range between a million and fifty six million did it consider that most businesses fail in its field well interestingly enough you can just look at judge rhodes opinion to see how she was wrong about that because she says while eighty percent of these internet startups fail we were just looking at and brad taylor pony pulled comparables that more search engine companies there were twenty two of them valued it thirty four separate instances and they did range in value from a million dollars to three hundred thirty four million dollars but he merrily bit down to just those that were in the search industry many of which tried to say they had the same type of technology that ultimately got patented in this case and then he did an analytical approach called money harlow now they say judge rhodes to say why it's not worth fifty six million says we had bad executive management we didn't finish the prototype product there was litigation that ensued and and that and that next floor next floor gave up on the search engine if you really look at the evidence and the executive management the executive management was dr fire up the idea coleman who was helping to promote the idea rod martin of pay pal gil amelio gil amelio was the c e o of apple and the c e o of national semiconductor he was on our board of advisors the reason that litigation killed white not you know how can white not after mandela took the stuff to next floor he got lawyers to represent white nile coleman so the litigation started not with rapture and not with thrasher and coleman and rod martin mandela use white nile the remnants of it to sue them to pin them down dr m that was what destroyed the value why didn't we have a prototype working because of mandela's tortious conduct he didn't put in the three hundred thousand he said it was going to put in all another word all of the time doug that judge r wants to discount this down to the lowest range was conduct by the court fees or and judge jones that's why i want to go back to where this flexible approach came from it came to us from the u s supreme court in the twent eastman kodak and it not only adopted the flexible approach with the approximation language but it said why it said because a defendant cannot rely upon uncertainties his tortious conduct creates they came back in story in one nine hundred thirty one it's really prosaic and i ask you to read it but the sum and substance of it is to do so what judge rhodes did what judge rhodes did is knock us down from fifty million dollars based on uncertainties of the tortious conduct of man down and in one nine hundred thirty one the supreme court said to do so is a perversion and denial of justice but you know what ju at the end of the day we didn't reappear all this because i think you are correct i don't think it makes a whit of difference that this is a truck bench trial versus a jury trial i think that she did what the court asked her to do the first time and as the trier of fact said we didn't need our burden of persuasion on fifty million you get a million and his reliance upon these uncertainties which the law in the supreme court said you ought not to use is absolutely property white house intellectual property and using it to compete against white nile at next floor the analysis would be identical to the analysis of thrasher and calm in the same models of the same measure now did she do that no she did not do that she did not do that because she believed that the white now three hundred thousand wasn't remanded on appeal but if you read her conclusion if you read her conclusion she says you know if i'm wrong about this and judge clark says you're wrong it was all remanded and therefore i'm going to increase it by the hundred ninety seven you want to do increase it for the money they stole the three hundred thousand had to be based upon the same misappropriation breach of  duty analysis she'd already made now what are the actual damages that thrasher incurred as a result of mandela failing to invest in one night the loss of fifty million dollars worth of ip the actual damages that those would be those four hundred thousand dollars to pay off a receiver that shouldn't that should have never been necessary you know the judge said i don't think that it's a good idea to rely on the settlement agreement either because the settlement agreement at that point we would have said if you've got litigation if you don't have clear title it kills it and so that's why you should just know that judge rhodes would've made the same conclusion about the three hundred thousand it's been eleven years it's time to jones pointed out the valuation of this ip was based on comparables that were carefully selected to companies that were similarly situated without products without granted patton's at the nascent infancy stage they have valuations based on investments mr taylor used those investments you know what every one of those companies had the same risk of failure be it eighty percent or otherwise that white now have so the risk of failure is necessarily priced into the comparables he used cool see you i l actually had subsequently fail and they asked him does the fact that it subsequently failed change your opinion and he said no because the task i've been given  the right of that ip at the time it was stolen that's based on what the transactions were at that time and backup point judge jones made there were a lot of people that make a lot of money on companies that ultimately fail in transactions take place and  monies exchanged on companies that ultimately fail before they fail and what the court held was a tortfeasor who's wrong is the one who should bear the risk of that ip ultimately failing when he has deprived the defendant are in this case the person who has been stolen from of the opportunity to exploit it he can't drive it into the ground himself and they claim to get a windfall for something that's never going to be successful and it's now say well as a matter of the record there is no record about what has happened with this ip afterwards there's no subsequent proceedings and for him to speculate that it has no value is outside the scope of what's before the court so any testimony that is just misplaced can you help me with the three hundred thousand for the out of the contract was it from that contractor not from the from the four hundred thousand that was awarded for for mr goldman yes the i would start by suggesting that we didn't argue that contract was any basis for his dam's weighted that at the base she appears to have used that but i think that what judge clark correctly pointed out is that he was trying to grapple with a willing buyer willing seller reasonable royalty this court found as did judge clark as did judge rhodes that mr coleman assigned his ip his work product and his patents to white now pursuant to that consulting agree so mr mandela's contention that it bears no relation to the ip is contrary to what this or the district we're in the bankruptcy court found he did transfer for that and what i think judge rose was getting at th pleading is that in the mr coleman's contract he was to get primarily cash as opposed to an interest and white nile if it had been successful that equity interest would have been worth a whole lot more than it was but she said what i have on the record in front of me is i know he was getting primarily cash as opposed to mr thrasher someone used the cash value he was to be the chief creative officer in to impart his intellectual property and trade secrets into white nile so that we're that those were the services to be performed i think and still think that those damages to mr coleman for his ip were worth far more than four hundred thousand dollars as was supported by the testimony of taylor and emilio in jackson but like mr mad recognize that judge rhodes was sitting as a fact finder and entitled to implement her discretion and in her discretion she chose to stick to that lower number based on a contract because she had in front of us that mr coleman had been willing to accept space applying this court's rationale and with logic as to how would that be value mr coleman was the co inventor of one of the two patents that issued and was the author of the sykora documents so we would posit that something between a twenty five percent and a fifty percent interest of the ip that reverted back to coleman and thrasher would have been the appropriate thing for the court to have done and to base it off the value of the intellectual property and not off this contract but we are acknowledg thousand in a legitimate way with the top levels that mr taylor utilized for the value of the ip which we had at fifty six million dollars which included risk of failure is a did if i bought cool which ultimately did fail i mean it was the current value of that ip at that time and it already price is in the risk of failure so the proper way to get there was pick with the ip number is and then pick an approximation of how you would differentiate that number between mr coleman white knowledge mr thrasher as to get how much of those things and judge rhodes did that she gave mr thrasher a million she gave white now three hundred thousand she gave mr coleman four hundred thousand in the evidence before the court justifies those same evidence your record that even the flexible will logic standard has been met the court said would explain why the court said and quoting unlike the present case the trial you are a factor in will logics calculated of damages awarded the credit in the evidence presented  paragraph eighty seven of judge rules his findings just this is about brad taylor in his one two whatever multibillion dollar range the court however is not persuaded by taylor's analysis or his expert report taylor's calculations of market value fail to adequately account for the extremely high failure rate of companies like like not just with the holy percent with due respect to mr smith the one to whatever range was not somehow factored in for interesting amelio also recognized that eighty percent of companies at least like what niall failed to become profitable the white males potential would not be bankable for years and that emilio would not perform i would not invest in the company also a mule did not testify that it was worth fifty six million he testified that it might be we're pretty system so judges we have a failure of the evidence and we have a bankruptcy court that suffered and struggled with the other than seeking a fair result but here is what mandel once said the damages must be the plaintiff lost profits nope no evidence the defendants actual profits from the use of the secret no evidence in fact judge world said that an explorer almost immediately abandoned any attempt to exploit this the value of what a recent reasonably put into investor would have paid for the trade secret no evidence because all of the experts were valuing the stock of like model which as you heard included many things including coleman's ip no one try to value the actual ip deal with stolen the development costs the defendant avoided for misappropriation the defendant never developed this he stole it and then almost immediately banned in the orca reasonable world two judges mr mandela has been found to be a bad guy he's a young man with