Opinion ID: 470034
Heading Depth: 1
Heading Rank: 12

Heading: remedies and other matters

Text: 62 We now come to the issue of remedies available to Metallurgical. The district court apparently found crucial Smith's inability to operate its furnace profitably. Because there was no commercial use, it concluded that damages were unavailable. We have already concluded that Smith did not use the alleged secrets Bielefeldt provided; to say that this circumstance precludes all remedies goes too far, however. The court failed to distinguish consideration of the individual appellees; Smith is out of the picture, but Bielefeldt remains. Should he be found liable on retrial, the appropriate damages should be based on the tenets of Lykes-Youngstown. We there adopted the concept of the reasonable royalty. This does not mean a simple percentage of actual profits; instead, the trier of fact, should it find Bielefeldt liable, must determine the actual value of what has been appropriated. 504 F.2d at 537, quoting Vitro Corp. v. Hall Chemical Co., 292 F.2d 678, 683 (6th Cir.1961). We later expounded this concept: 63 [T]he proper measure is to calculate what the parties would have agreed to as a fair price for licensing the defendant to put the trade secret to the use the defendants intended at the time the misappropriation took place. 64 In calculating what a fair licensing price would have been had the parties agreed, the trier of fact should consider such factors as the resulting and foreseeable changes in the parties' competitive posture; the prices past purchasers or licensees may have paid; the total value of the secret to the plaintiff, including the plaintiff's development cost and the importance of the secret to the plaintiff's business; the nature and extent of the use the defendant intended for the secret, and finally whatever other unique factors in the particular case might have been affected by the parties' agreement, such as the ready availability of alternative process. 65 Id. at 540. Estimation of damages, however, should not be based on sheer speculation. If too few facts exist to permit the trier of fact to calculate proper damages, then a reasonable remedy in law is unavailable. In that instance, a permanent injunction is a proper remedy for the breach of a confidential relationship. Zoecon Industries, 713 F.2d at 1180, citing Huffines, 314 S.W.2d at 778. In this case, moreover, an injunction against Bielefeldt in no way depends on whether Smith achieved commercial use. Should Metallurgical prove its point on retrial, therefore, it has a remedy available to right the wrong done it. 66 We emphasize the limited consequences of today's decision. In no way do we pass judgment on whether Bielefeldt committed any wrong; that task is for the trier of fact. We hold only that the opportunity for this determination to be made must be given. It may be that on retrial Bielefeldt can successfully show that his knowledge came from somewhere else or that the process of modification was no secret. 67 We conclude by recognizing the other appellees in this case. Our decision has focused exclusively on Bielefeldt and Smith. Metallurgical, however, also named the other officers of Fourtek as appellees. 9 It thereby forced Norman Montesino, Gary Boehm, and Michael Sarvadi to file an appellate brief. Only in their brief do we learn that Metallurgical itself moved to dismiss all counts against these three, a motion which the court granted. No evidence in the case was presented against them. Only in Metallurgical's reply brief, moreover, do we discover that Metallurgical does not urge this appeal as to Montesino, Boehm, and Sarvadi.... We regard the naming of these three as appellees, thus forcing them to submit a brief, as constituting a frivolous appeal. We therefore award attorney's fees and single costs to Montesino, Boehm, and Sarvadi in accordance with Fed.R.App.P. 38. On remand, they are to submit their claims for fees to the district court. 68 The district court's order is AFFIRMED in part, REVERSED in part, and the cause is REMANDED.