UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

YOUNG DESIGN, INCORPORATED, 

Plaintiff-Appellee,

v.  No. 01-2474

TELETRONICS INTERNATIONAL,

INCORPORATED,

Defendant-Appellant. 

Appeal from the United States District Court

for the Eastern District of Virginia, at Alexandria.

Leonie M. Brinkema, District Judge.

(CA-00-970-A)

Argued: June 3, 2002

Decided: July 19, 2002

Before MOTZ and KING, Circuit Judges, and

Robert R. BEEZER, Senior Circuit Judge of the

United States Court of Appeals for the Ninth Circuit,

sitting by designation.

Affirmed by unpublished per curiam opinion. 

COUNSEL

ARGUED: Maurice Ulman Cahn, CAHN & SAMUELS, L.L.P.,

Washington, D.C., for Appellant. Mary Catherine Zinsner, TROUTMAN, SANDERS, MAYS & VALENTINE, L.L.P., McLean, Virginia, for Appellee. ON BRIEF: Frederick N. Samuels, CAHN &

SAMUELS, L.L.P., Washington, D.C., for Appellant.
Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c). 

OPINION

PER CURIAM: 

Defendant, Teletronics International, Incorporated, appeals from

the district court’s denial of its motion for an award of attorneys’ fees.

Teletronics asserts that the Plaintiff, Young Design, Incorporated, initiated and maintained in bad faith its claim for misappropriation of

trade secrets (the "Trade Secrets Claim"), thereby warranting a fee

award under the Virginia Unfair Trade Secrets Act ("VUTSA"). The

district court found that Young Design had not pursued the Trade

Secrets Claim in bad faith, and it declined to award Teletronics its

attorneys’ fees. Young Design, Inc. V. Teletronics Int’l, Inc., Memorandum Opinion, 00-970-A (E.D. Va. Nov. 9, 2001) (the "Fee Opinion"). As explained below, we affirm. 

I.

A.

Young Design and Teletronics are direct competitors in the market

for wireless communications equipment. In January 1998, at a

national industry conference, representatives of Young Design

inquired whether Teletronics was interested in purchasing Young

Design’s bi-directional external amplifiers (the "YDI Amplifiers"). At

that time, Teletronics did not itself manufacture such products.1

Teletronics responded favorably to Young Design’s offer, and it

1An external amplifier serves to increase the range and performance of

wireless radio modems and local area networks. As of 1998, only two

domestic companies, Young Design and its competitor, Hyperlink, produced such amplifiers. Teletronics was interested in the YDI Amplifiers

because it had received complaints from customers that the modems that

it produced, containing internal amplifiers, did not meet their power

needs. 

2 YOUNG DESIGN v. TELETRONICS INTERNATIONAL
thereafter purchased twenty-eight YDI Amplifiers and tested their

performance. As part of the sales transactions, Young Design provided Teletronics with an electronic version of its user and installation

manual with respect to the YDI Amplifiers. The purchase orders

reflecting these transactions did not restrict either Teletronics’s use of

proprietary information or its use and disposal of the YDI Amplifiers.

Upon testing the YDI Amplifiers, Teletronics discovered a problem

in their performance: the amplifiers would suddenly lock into transmit

mode at high air temperatures. It notified Young Design of this problem and, in response, Young Design advised Teletronics that the

problem had been solved by the installation of a thermistor on the

YDI Amplifiers.2 Teletronics, however, made no further purchases of

them. 

About a year later, in April 1999, Young Design learned that

Teletronics was then manufacturing external amplifiers. After examining a Teletronics amplifier, Young Design concluded that the YDI

Amplifiers had been copied by Teletronics, and it confronted

Teletronics. Teletronics denied the accusation, explaining that it had

begun designing its own amplifier in the summer of 1997, and asserting that it had completed its first amplifier prototype in August 1998.

B.

On June 14, 2000, Young Design filed a five count complaint

against Teletronics in the Eastern District of Virginia, asserting, along

with the Trade Secrets Claim, claims for breach of contract, fraud and

constructive fraud, copyright infringement, and trover. In response,

Teletronics filed a six count counterclaim, alleging malicious interference with economic relationships, tortious inducement to breach an

existing contract, three counts of unfair competition, and trover. 

This lawsuit culminated in a three-day bench trial in the district

court, which was conducted in January 2001. In light of the court’s

pre-trial rulings, the only two claims involved in the trial were the

Trade Secrets Claim and the copyright infringement claim asserted by

2A thermistor is a specialized commercially-available resistor that corrects for temperature variances. 

YOUNG DESIGN v. TELETRONICS INTERNATIONAL 3
Young Design.3

 At trial, Young Design presented only one live witness (Michael Young), who testified both as a fact witness and as an

expert in radio frequency engineering. The court, however, was not

impressed with his testimony, finding it to be "often self-serving and

marred by exaggeration." Young Design also presented at trial the

deposition evidence of Michael Chen, a former Teletronics vicepresident, but the court found that his "language problem undercut our

confidence in the accuracy of his testimony." In its case, Teletronics

called two live witnesses — an expert in radio frequency technology

and electrical engineering, and one of its current vice presidents.

Teletronics also presented the deposition evidence of five other witnesses. 

On July 31, 2001, the district court ruled on the two claims of

Young Design, which it had tried six months earlier. Young Design,

Inc. v. Teletronics Int’l, Inc., Memorandum Opinion, 00-970-A (E.D.

Va. July 31, 2001) (the "Trial Opinion"). Pursuant thereto, the court

concluded that Young Design had not sustained its burden of proof

on the Trade Secrets Claim, and that Claim was dismissed. The court

then ruled in favor of Young Design on the copyright infringement

claim, and it entered an order permanently enjoining Teletronics from

copying the manual which had accompanied the YDI Amplifiers.4

C.

Following the trial and the filing of the court’s Trial Opinion,

Young Design and Teletronics made cross motions for attorneys’

fees. In its Fee Opinion of November 9, 2001, the court denied both

3Prior to trial, the district court dismissed Young Design’s claims for

breach of contract and fraud and constructive fraud, and it awarded summary judgment to Young Design on its trover claim. In addition, the

court awarded Teletronics summary judgement on its trover counterclaim, and it awarded summary judgment to Young Design on all of the

remaining counterclaims. 

4Teletronics admitted that the manual used for its amplifiers included

portions copied from Young Design’s manual. Because the parties

agreed that Teletronics was no longer copying Young Design’s manual,

the court referred to its permanent injunction against Teletronics as a

"symbolic injunction." Fee Opinion at 4. 

4 YOUNG DESIGN v. TELETRONICS INTERNATIONAL
of the attorneys’ fees motions, observing that the litigation was a

"very hard fought, contentious civil action [which] should be characterized as a draw." Fee Opinion at 1. With respect to the Trade Secrets

Claim specifically, the court concluded that, although Young Design

was unable to sustain its burden of proof, its Claim withstood the "no

chance of success" test applicable under VUTSA. Id. at 10-11. The

court also observed, in denying the attorneys’ fees motion of

Teletronics, that the Trade Secrets Claim had survived numerous pretrial motions and that the court had spent several weeks fully evaluating the trial evidence relating to it. Id. at 11. Teletronics then filed a

timely notice of appeal from the Fee Opinion. We possess jurisdiction

pursuant to 28 U.S.C. § 1291.5

II.

We review "the denial of an award for attorney fees for abuse of

discretion." People for Ethical Treatment of Animals v. Doughney,

263 F.3d 359, 370 (4th Cir. 2001) (citing Shell Oil Co. v. Commercial

Petroleum, Inc., 928 F.2d 104, 108 n. 6 (4th Cir. 1991)). And an

abuse of discretion only arises if the district court’s "conclusions are

based on mistaken legal principles or clearly erroneous factual findings." Id. (citing Westberry v. Gislaved Gummi AB, 178 F.3d 257, 261

(4th Cir. 1999)). 

III.

Teletronics seeks its attorneys’ fees award pursuant to VUTSA,

which permits recovery of attorneys’ fees by a prevailing party "[i]f

the court determines that . . . a claim of misappropriation [wa]s made

in bad faith." Va. Code Ann. § 59.1-338.1. In this connection,

Teletronics concedes that the issue of bad faith is to be determined by

the court, utilizing an "objective reasonableness" standard, and that

the district court applied this standard in its Fee Opinion. As such,

Teletronics’ sole contention on appeal is that the court clearly erred

in finding that Young Design did not act in bad faith in pursuing the

Trade Secrets Claim. More specifically, Teletronics maintains that

5Young Design did not appeal the Fee Opinion’s denial of its motion

for attorneys’ fees. Furthermore, no appeals have been taken in connection with the other rulings made by the district court in this litigation. 

YOUNG DESIGN v. TELETRONICS INTERNATIONAL 5
Young Design’s failure to sustain its burden of proof on all elements

of the Trade Secrets Claim mandates a finding that it pursued the

Claim in bad faith.6

In concluding that Young Design had not pursued the Trade

Secrets Claim in bad faith, the court recognized that the Claim was

not legally insufficient. Fee Opinion at 11 (stating that court did "not

find that [Young Design’s] claims had no chance of success under the

Act"). The court also observed that, even though the trial evidence

supporting the Trade Secrets Claim was weak, Young Design had

nonetheless offered evidence which, if credited, could have substantiated the Claim. Furthermore, the court recognized that the Trade

Secrets Claim had "survived extensive pretrial motions and that the

[c]ourt needed several weeks to evaluate the trial evidence fully." Id.

In light of this record and the various other findings and rulings of the

district court, we see nothing to suggest that it clearly erred in concluding that Young Design did not pursue its Trade Secrets Claim in

bad faith. As a result, the attorneys’ fees claim of Teletronics must fail.7

6

In order to prove the Trade Secrets Claim, Young Design was obliged

to establish, as the district court properly recognized, the following four

elements by a preponderance of the evidence: (1) whether an express or

implied confidential relationship existed between the parties; (2) whether

Young Design took reasonable efforts to maintain the secrecy of its

alleged trade secrets; (3) whether the trade secrets were, in fact, either

publicly revealed or generally known; and (4) whether there were sufficiently substantial differences between the products. Trial Opinion at 10-

11; see also Va. Code Ann. § 59.1-336; Dionne v. Southeast Foam Converting & Packaging, 397 S.E.2d 110, 113-14 (Va. 1990). 

7Teletronics has also filed with us a motion to strike portions of Young

Design’s Brief, maintaining that it relied on materials outside of the

record on appeal. Pursuant to Rule 10 of the Federal Rules of Appellate

Procedure, "[t]he following items constitute the record on appeal: (1) the

original papers and exhibits filed in the district court; (2) the transcript

of proceedings, if any; and (3) a certified copy of docket entries . . . ."

Furthermore, Local Rule 28(f) allows a party to rely on material found

in the record on appeal, even though not contained in the Joint Appendix.

In response to the motion to strike, Young Design concedes that the

deposition testimony of Messrs. Jamal and Fang, referred to on pages 30

and 31 of its Brief, was not introduced at trial, and it has agreed that

these references should be stricken. As such, we grant Teletronics’s

motion to strike these references in Young Design’s Brief. We deny the

balance of the motion to strike, however, because the material relied

upon is in the record on appeal. 

6 YOUNG DESIGN v. TELETRONICS INTERNATIONAL
IV.

Pursuant to the foregoing, the district court did not abuse its discretion, and we affirm.

AFFIRMED

YOUNG DESIGN v. TELETRONICS INTERNATIONAL 7