NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

PROOFPOINT, INC.; CLOUDMARK, LLC,

Plaintiffs

- Appellants,

v.
VADE USA, INC.; et al.,

Defendants

- Appellees. No. 23

- 16085

D.C. No. 3:19

- cv
- 04238

- MMC

MEMORANDUM *

PROOFPOINT, INC.; CLOUDMARK, LLC,

Plaintiffs

- Appellants,

v.
VADE USA, INC.; VADE FRANCE, SAS,

Defendants

- Appellees,

and

OLIVIER LEMARI É

,

Defendant. No. 23

- 16175

D.C. No. 3:19

- cv
- 04238

- MMC

Appeal from the United States District Court for the Northern District of California Maxine M. Chesney, District Judge, Presiding

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36

- 3. 

# FILED

AUG 30 2024

MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS2 Argued and Submitted August 12, 2024 San Francisco, California
Before: GRABER, CALLAHAN, and KOH, Circuit Judges.
Plaintiffs Proofpoint, Inc. and Cloudmark LLC, which are affiliated
cybersecurity companies, brought this action under the Defend Trade Secrets Act,
18 U.S.C. § 1836 et seq., against Vade, a rival company, and Vade’s former Chief
Technology Officer, Oliver Lemarié. A jury found that Vade and Lemarié had
misappropriated Plaintiffs’ trade secrets and that Vade’s misappropriation was
willful and malicious. The jury awarded Plaintiffs approximately $13.5 million in
damages for unjust enrichment but zero dolla rs for actual loss. In th ese timely
appeal s , Plaintiffs challenge the district court’s denials of their requests for a jury
trial on exemplary damages, an adverse

- inference instruction, injunctive relief, and

attorney ’s fees. We affirm.
1. The district court recognized that 18 U.S.C. § 1836(b)(3) is ambiguous
because it begins by stating that “a court may” grant a list of remedies, some of
which (such as an award of attorney ’s fees) are clearly for the court alone and some
of which (such as damages for actual loss) are for the jury. The court then ruled as
a matter of law that, for purposes of § 1836(b)(3)(C), which allows an award for
exemplary damages, “court” means only the judge and not the jury. The court
decided to award no exempl ary damages.3

Plaintiffs argue that “court” means only the jury in that paragraph or, if the
statute is ambiguous, that the Seventh Amendment requires a jury trial for
exemplary damages. We need not resolve the questions whether such damages are
always for the judge or the jury under the statute or, if so, whether the statute
would be constitutionally infirm. Assuming
, without deciding
, that the Seventh
Amendment always requires a jury trial for exemplary damages that enhance an
award for actual loss, the jury in this case found no actual loss. Where, as here, an
award for unjust enrichment rests on disgorgement of the defendant’s profits, it is
an equitable remedy. See Liu v. SEC , 591 U.S. 71 , 80 (2020) (“Decisions from
this Court confirm that a remedy tethered to a wrongdoer’s net unlawful profits,
whatever the name, has been a mainstay of equity courts.”). As the Supreme Court
recently noted, the Seventh Amendment embraces all suits that are not in equity or
admiralty jurisdiction. SEC v. Jarkesy , 144 S. Ct. 2117, 2128 (2024). Thus the
Seventh Amendment extends to a statutory claim only if that particular claim is
legal in nature, id. , which disgorgement is not. Accordingly, any error by the

district court is harmless.
2. Because we do not remand the case for a jury trial on exemplary
damages, we need not reach Plaintiffs’ argument regarding an adverse

- inference

instruction.4

3. The district court did not abuse its discretion in denying Plaintiffs’ motion
for a permanent injunction. See Theme Promotions, Inc. v. News Am. Mktg. FSI
, 546 F.3d 991, 1000 (9th Cir. 2008) (stating standard of review). The court
reasonably concluded that Plaintiffs failed to demonstrate an irreparable injury.
4. The district court did not abuse its discretion in denying Plaintiffs’ motion
for attorney ’s fees. See Jones v. Riot Hosp. Grp. LLC , 95 F.4th 730, 738 (9th Cir.
2024) (stating standard of review). The court permissibly concluded that Vade’s
misappropriation of trade secrets, though willful and malicious, was insufficient to
require an award of fees

.
AFFIRMED.