Opinion ID: 325023
Heading Depth: 3
Heading Rank: 1

Heading: Appropriation of Trade Secrets:

Text: 142 1. Telex claims that the court erred in its award of damages based upon the misappropriations because it derives largely from the hiring of former IBM employees and the paying of large bonuses to them to produce copies of IBM products. It is said by Telex that the damages which the court found amounting to $20.9 million is based largely on circumstantial evidence. 143 2. Telex says that it did not invade IBM's rights because they were free generally to copy those products that were on the market and thus in the public domain. Further, that these were not secrets; that they were known throughout the industry and neither innovative nor novel. Finally, they maintain that IBM was misusing their secrets in any event; that they were furthering their monopolistic activities with them and therefore the secrets were so contaminated that no recovery could be allowed. 144 3. A specific objection is raised as to the.$4.5 million lost on tape rentals and $3 million in indeterminate damages. Telex says that there is no way of knowing whether IBM would have had the.$4.5 million and says that the $3 million award is too vague. 145 4. Regarding the award of $10 million to IBM based on misappropriation of trade secrets growing out of IBM's Merlin disk system, Telex says that it abandoned this matter midway in its development and sold it to another corporation. Since it never finished its program, IBM did not suffer any damages. It says that the $10 million award really represented the sum that Telex would have lost in its attempt to copy Merlin had it not used IBM's trade secrets. It says that it was impermissible for the court to use this kind of an approach to the award of damages. 146 5. Telex contends that the award of $3 million to IBM for increased security expenses and the award of $400,000 resulting from having to manufacture a component in-house due to fear of misappropriation were ill-founded awards. It says that it should not be penalized for IBM's apprehensions about security. 147 6. Telex also contends that it was error to award the punitive damages. It argues that the award is inappropriate in view of the IBM antitrust violations.