Court Opinion

ID: 2656984
Source: CourtListenerOpinion
Date Created: 2014-03-18 15:18:57.70724+00
Date Added: 2024-06-11T13:02:54.732946
License: Public Domain

NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
                 ______________________

 GABRIEL TECHNOLOGIES CORPORATION, AND
       TRACE TECHNOLOGIES, LLC,
            Plaintiffs-Appellants,

                            v.

QUALCOMM INCORPORATED, SNAPTRACK, INC.,
        AND NORMAN KRASNER,
            Defendants-Appellees.
           ______________________

                       2013-1205
                 ______________________

   Appeals from the United States District Court for the
Southern District of California in No. 08-CV-1992, Judge
Anthony J. Battaglia.
                ______________________

                Decided: March 18, 2014
                ______________________

    ROBERT G. KNAIER, Chapin Fitzgerald LLP, of San Di-
ego, California, argued for plaintiffs-appellants. With him
on the brief were KENNETH M. FITZGERALD and KEITH M.
COCHRAN.

    STEVEN M. STRAUSS, Cooley LLP, of San Diego, Cali-
fornia, argued for defendants-appellees. With him on the
2   GABRIEL TECHNOLOGIES CORP.   v. QUALCOMM INCORPORATED

brief were TIMOTHY S. TETER, JEFFREY S. KARR, and LORI
R. MASON, of Palo Alto, California.
                 ______________________

    Before LOURIE, MAYER, and CHEN, Circuit Judges.
PER CURIAM.
    Gabriel Technologies Corporation (“Gabriel”) and
Trace Technologies, LLC (“Trace”) appeal a final order of
the United States District Court for the Southern District
of California awarding Qualcomm Incorporated (“Qual-
comm”), SnapTrack, Inc. (“SnapTrack”), and Norman
Krasner attorneys’ fees pursuant to 35 U.S.C. § 285 and
the California Uniform Trade Secrets Act (“CUTSA”), Cal.
Civ. Code § 3426.4. See Gabriel Techs. Corp. v. Qual-
comm Inc., No. 08-CV-1992, 2013 WL 410103 (S.D. Cal.
Feb. 1, 2013) (“Attorneys’ Fees Order”). We affirm.
                      BACKGROUND
    The district court provided a comprehensive account
of the history of this case in its summary judgment deci-
sions, see Gabriel Techs. Corp. v. Qualcomm Inc., No. 08-
CV-1992, 2012 WL 4574550, at *1-3 (S.D. Cal. Oct. 1,
2012) (“Inventorship Decision”); Gabriel Techs. Corp. v.
Qualcomm Inc., 857 F. Supp. 2d 997, 1000-02 (S.D. Cal.
2012) (“Trade Secrets Decision”), and its Attorneys’ Fees
Order, 2013 WL 410103, at *1-2, and we need only pro-
vide a brief summary here. William Clise and Michael
Crowson founded Locate Networks, LLC (“Locate”), a
company which sought to incorporate global positioning
system (“GPS”) technology into paging systems. Trade
Secrets Decision, 857 F. Supp. 2d at 1000. In 1999, Locate
entered into a licensing agreement with SnapTrack,
under which Locate obtained a license to use SnapTrack’s
GPS software. Id. The licensing agreement stipulated
that the parties would share ownership in technology
which was jointly developed in connection with the licens-
ing agreement. Id.
GABRIEL TECHNOLOGIES CORP.   v. QUALCOMM INCORPORATED     3

     Qualcomm acquired SnapTrack in March of 2000. In
2004, Locate sold its assets to Trace, and then transferred
its interest in Trace to Gabriel. Locate subsequently went
out of business.
    On October 24, 2008, Gabriel and Trace (collectively
the “Gabriel plaintiffs”) filed suit against Qualcomm,
SnapTrack and Krasner (collectively the “Qualcomm
defendants”), seeking more than $1 billion in damages.
J.A. 206-39. Their complaint contained eleven causes of
action, including claims for correction of inventorship,
breach of the 1999 license agreement, fraud/fraudulent
inducement, unfair competition, and misappropriation of
trade secrets. J.A. 231-78. Each of these claims was
grounded on the contention that individuals affiliated
with Locate conceived of the inventions disclosed in
several Qualcomm patents. The Gabriel plaintiffs assert-
ed that “[o]ver time, Krasner, SnapTrack, and Qualcomm
surreptitiously misappropriated Locate’s valuable ena-
bling technology and other . . . intellectual property
rights.” J.A. 243.
    In September 2009, the district court dismissed six of
the Gabriel plaintiffs’ eleven causes of action, concluding
that they had failed to state a viable claim for breach of
the 1999 license agreement, J.A. 492-95, and that their
unfair competition claims were preempted under CUTSA
because they were premised on the same conduct that
gave rise to their trade secret misappropriation claims,
J.A. 507. Three months later, the court dismissed the
Gabriel plaintiffs’ cause of action for fraudulent induce-
ment, concluding that they had failed to plead that claim
with the particularity required by Federal Rule of Civil
Procedure 9(b). J.A. 616-18.
    On September 20, 2010, the district court required the
Gabriel plaintiffs to post a bond of $800,000 as a condition
for continuing their suit. J.A. 2400-23. The court deter-
mined that the bond was necessary because the Qual-
4   GABRIEL TECHNOLOGIES CORP.   v. QUALCOMM INCORPORATED

comm defendants had “presented significant, unrebutted
evidence that” the suit filed by the Gabriel plaintiffs was
“likely unmeritorious, and brought in bad faith to salvage
Gabriel.” J.A. 2421. The court explained that although
the Gabriel plaintiffs had “been investigating their claims
for several years,” they had failed “to draw any meaning-
ful connection between Locate’s technology and the alleg-
edly misappropriated information found in [Qualcomm’s]
patents.” J.A. 2421. The court further noted that Gabriel
had “a long history of corrupt officers and directors who
[were] not above taking illegal and fraudulent actions to
guarantee their own personal gain.” J.A. 2421 (footnote
omitted). According to the court, there was a “strong
likelihood” that the Qualcomm defendants would be
awarded their attorneys’ fees pursuant to section 285 at
the conclusion of the litigation. J.A. 2421.
     The Gabriel plaintiffs then posted the required
$800,000 bond, J.A. 2435-36, and the parties proceeded
with discovery. In March 2012, the district court granted
the Qualcomm defendants’ motion for partial summary
judgment, concluding that the trade secret misappropria-
tion claims asserted by the Gabriel plaintiffs were time-
barred. Trade Secrets Decision, 857 F. Supp. 2d at 1002-
10. Following additional discovery, the district court
granted summary judgment against the Gabriel plaintiffs
on their remaining inventorship claims, concluding that
they had failed to produce any evidence that individuals
affiliated with Locate made an inventive contribution to
the disputed Qualcomm patents. Inventorship Decision,
2012 WL 4574550, at *4-9.
    On February 1, 2013, the trial court issued an order
declaring the case exceptional under section 285 and
awarding the Qualcomm defendants more than $12
GABRIEL TECHNOLOGIES CORP.   v. QUALCOMM INCORPORATED      5

million in attorneys’ fees. 1 The court held that the claims
advanced by the Gabriel plaintiffs “were objectively
baseless and brought in subjective bad faith,” Attorneys’
Fees Order, 2013 WL 410103, at *4, noting that they
“brought and maintained [inventorship] claims without
knowing the identity of the allegedly omitted inventors,
the most basic prerequisite for a successful correction of
inventorship patent claim,” id. at *5. An award under
section 285 was warranted because the Gabriel plaintiffs
were well aware that they “lacked the requisite evidence”
to support their claims, but “opted to pursue their claims
nonetheless.” Id. at *4 (footnote omitted). The court was
“particularly struck by [the Gabriel plaintiffs’] decision to
pursue their claims further following [its] warning that
the case would likely be found exceptional based on the
evidence before [it] at the bond hearing.” Id. at *5. In
addition, the court concluded that an award of fees and
costs was appropriate under CUSTA, see Cal. Civ. Code
§ 3426.4, because the trade secret misappropriation
claims advanced by the Gabriel plaintiffs “were objective-
ly specious and . . . brought and maintained . . . in subjec-
tive bad faith.” Attorneys’ Fees Order, 2013 WL 410103,
at *7.
    The Gabriel plaintiffs then filed a timely appeal chal-
lenging the district court’s award of attorneys’ fees under
both section 285 and CUTSA. 2 We have jurisdiction
under 28 U.S.C. § 1295(a)(1).

    1    In this appeal, the Gabriel plaintiffs challenge the
merits of the district court’s decision to award attorneys’
fees under section 285 and CUTSA, but have not appealed
the court’s determination as to the appropriate quantum
of fees.
     2   The Gabriel plaintiffs also filed a separate appeal
challenging the trial court’s judgments on the merits of
their inventorship and trade secret misappropriation
6   GABRIEL TECHNOLOGIES CORP.   v. QUALCOMM INCORPORATED

                       DISCUSSION
                  I. Standard of Review
     The Supreme Court recently granted certiorari to de-
termine whether a district court’s determination that a
party’s litigation position was “objectively baseless” for
purposes of a section 285 fee award is subject to de novo
review on appeal. See Highmark, Inc. v. Allcare Health
Mgmt. Sys., Inc., 687 F.3d 1300, 1309 (Fed. Cir. 2012),
cert. granted, — U.S. —, 134 S. Ct. 48 (2013). Here, even
applying de novo review—as opposed to a more deferen-
tial standard—we conclude that the district court correct-
ly determined that the claims advanced by the Gabriel
plaintiffs were objectively baseless.
    In contrast to the objective baselessness component of
the exceptional case determination, the question of
whether a litigant acted with subjective bad faith is
reviewed for clear error. Id. at 1310. Furthermore,
“[u]nlike the objective prong, which is a single retrospec-
tive look at the entire litigation, the subjective prong may
suggest that a case initially brought in good faith may be
continued in bad faith depending on developments during
discovery and otherwise.” Id. at 1311. We likewise
conclude that the district court correctly determined that
the Gabriel plaintiffs acted with subjective bad faith by
stubbornly continuing to press their claims long after they
realized that those claims were without evidentiary
support.
         II. The Exceptional Case Determination
    The determination as to whether to award attorneys’
fees under section 285 is a two-step inquiry. Eon-Net LP

claims. Today we affirm those judgments pursuant to
Federal Circuit Rule 36. See Gabriel Techs. Corp. v.
Qualcomm Inc., No. 2013-1058 (Fed. Cir. Mar. 18, 2014).
GABRIEL TECHNOLOGIES CORP.   v. QUALCOMM INCORPORATED      7

v. Flagstar Bancorp, 653 F.3d 1314, 1323 (Fed. Cir. 2011).
First, a district court “determine[s] whether the prevail-
ing party has proved by clear and convincing evidence
that the case is exceptional.” Id. Second, if the court
finds the case exceptional, it must decide whether the
award of attorneys’ fees is warranted. Id.; see Brooks
Furniture Mfg., Inc. v. Dutailier Int’l, Inc., 393 F.3d 1378,
1382 (Fed. Cir. 2005) (“Even for an exceptional case, the
decision to award attorney fees and the amount thereof
are within the district court’s sound discretion.”). Under
existing precedent, “[a]bsent misconduct in conduct of the
litigation or in securing the patent, sanctions may be
imposed [under section 285] only if both (1) the litigation
is brought in subjective bad faith, and (2) the litigation is
objectively baseless.” Brooks Furniture, 393 F.3d at
1381. 3
                III. Objective Baselessness
     The record here amply supports the trial court’s con-
clusion that the inventorship claims advanced by the
Gabriel plaintiffs were objectively baseless. The Gabriel
plaintiffs “did not know the identity of the allegedly
omitted inventors when they filed [their] action in 2008 or
at any later point in the case.” Attorneys’ Fees Order,
2013 WL 410103, at *4. Indeed, “they were never able to
find individuals that would take credit for inventing any
of the relevant patents or profess knowledge of specifics
relating to the patents.” Id. Simply put, the Gabriel

    3   The Supreme Court has also granted certiorari to
consider whether a prevailing party seeking attorneys’
fees under section 285 is required to establish both that
the litigation was objectively baseless and that it was
maintained in subjective bad faith. See Icon Health &
Fitness, Inc. v. Octane Fitness, LLC, 496 F. App’x 57, 65
(Fed. Cir. 2012), cert. granted, — U.S. —, 134 S. Ct. 49
(2013).
8   GABRIEL TECHNOLOGIES CORP.   v. QUALCOMM INCORPORATED

plaintiffs played a game of “inventor musical chairs,”
Defs.-Appellees Br. 23, repeatedly shifting positions as to
which individuals from Locate were omitted inventors. In
the end, none of the Gabriel plaintiffs’ fact or expert
witnesses provided support for the contention that indi-
viduals from Locate made a specific inventive contribu-
tion to any Qualcomm patent. 4 See J.A. 5618-42; 5775-98;
6410-12.
     For example, the Gabriel plaintiffs asserted and
maintained a claim for correction of inventorship on
Qualcomm’s 6,799,050 patent (the “’050 patent”), notwith-
standing the dearth of evidence showing that any Locate
employee contributed in a substantive manner to the
conception of the invention disclosed in that patent. The
’050 patent, which issued on September 28, 2004, listed
Krasner as the sole inventor. J.A. 6178-92. When they
filed their original interrogatory responses, the Gabriel
plaintiffs failed to identify any individual associated with
Locate who was a purported omitted inventor. Inventor-
ship Decision, 2012 WL 4574550, at *4. They subsequent-
ly amended their interrogatory responses to assert that
Philip DeCarlo, a Locate employee, was an omitted inven-

    4   The Gabriel plaintiffs argue that the declarations
they submitted from “highly-credentialed experts” were
sufficient to demonstrate that Locate “conceived of valua-
ble contributions to the technology that was later included
in [Qualcomm’s] patents.” We decline to discuss the
particulars of these expert declarations since they were
filed under seal in the district court and have been
marked confidential on appeal. J.A. 2899-3087. We have
reviewed these declarations, however, and conclude that
they fail to adequately identify: (1) any specific inventive
contribution that any particular Locate employee made to
the Qualcomm patents; or (2) any specific trade secret
that was misappropriated by the Qualcomm defendants.
GABRIEL TECHNOLOGIES CORP.   v. QUALCOMM INCORPORATED      9

tor. Id. DeCarlo, however, “testified that he did not
invent the ’050 patent, never told anyone he should be a
named inventor, and did not know why he was listed as
an omitted inventor.” Id. The Gabriel plaintiffs then once
again revised their interrogatory responses, this time
asserting that Clise was the sole inventor on the ’050
patent. Clise, however, acknowledged that he did not
conceive of important technologies disclosed in the ’050
patent, and failed to produce any documentation or other
credible evidence corroborating his claim of inventorship.
Id. at *5. In fact, during his deposition Clise was unable
to identify any specific information that he had provided
to Krasner which might even arguably qualify him as an
inventor on the ’050 patent. J.A. 5899-900.
     On appeal, the Gabriel plaintiffs “acknowledge that it
took them some time to precisely identify all omitted
inventors,” but argue that “identification of omitted
inventors and correlation of their efforts to specific patent
claims [was] a difficult and time consuming task.” In
support, they note that “Locate developed its inventions
in 1999 through 2001, ten years before discovery com-
menced,” and that many potential omitted inventors “had
relocated, requiring extensive travel by Plaintiffs’ coun-
sel.” The problem for the Gabriel plaintiffs, however, is
not that it took “some time” to identify the allegedly
omitted inventors, but that even after nearly four years of
litigation they were unable to produce any credible evi-
dence that anyone affiliated with Locate made any specif-
ic inventive contribution to the relevant Qualcomm
patents.
    The Gabriel plaintiffs further contend that the trial
court imposed an unduly rigorous standard for joint
inventorship. In their view, the trial court improperly
“considered it dispositive that Locate inventors had not
met the named inventors, repeatedly stressing direct
communication as a necessary condition for a co-
inventorship claim.” Contrary to the Gabriel plaintiffs’
10 GABRIEL TECHNOLOGIES CORP. v. QUALCOMM INCORPORATED

assertions, however, the trial court did not reject their
joint inventorship claims simply because Locate employ-
ees had never met with the named inventors. Instead,
the court properly concluded that Locate employees could
not be deemed joint inventors because there was no
evidence that anyone affiliated with Locate made any
inventive contribution to the Qualcomm patents. See
Attorneys’ Fees Order, 2013 WL 410103, at *4. To qualify
as a joint inventor, a party “must contribute in some
significant manner to the conception of the invention.”
Falana v. Kent St. Univ., 669 F.3d 1349, 1357 (Fed. Cir.
2012) (citations and internal quotation marks omitted).
                 IV. Subjective Bad Faith
     The Gabriel plaintiffs argue that the record contains
strong evidence demonstrating their subjective good faith
and that the trial court “committed clear error in ignoring
it.” In their view, their willingness to post the $800,000
bond required by the district court constitutes “powerful
evidence that they believed in the merits of their claims.”
They further assert that the fact that their trial counsel,
after performing “substantial due diligence,” agreed to
take on their case on a contingency fee basis “corroborated
and strengthened [their] subjective good faith belief in
their case.”
    We do not find this reasoning persuasive. In many
cases, unearthing evidence sufficient to establish a liti-
gant’s subjective bad faith is challenging. See Kilopass
Tech., Inc. v. Sidense Corp., 738 F.3d 1302, 1311 (Fed. Cir.
2013) (noting that “[s]ubjective bad faith is difficult to
prove directly”). This is not such a case. The record
contains emails demonstrating that the Gabriel plaintiffs
maintained their suit long after they recognized that their
claims were without merit. In January 2010, after Gabri-
el’s original attorneys, Munck Carter PC (“Munck
Carter”), withdrew, John Hall, a Gabriel board member,
GABRIEL TECHNOLOGIES CORP.    v. QUALCOMM INCORPORATED 11

sent an email to Maurice Shanley, Gabriel’s chief finan-
cial officer, which stated:
       [W]e are looking for financing, a new law firm,
   but with what[?] The cu[p]board is bare. The
   case [h]as never been developed beyond filing a
   complaint over something that happened 10 years
   ago. There is no package with the 20 most im-
   portant documents and the narrative that sup-
   ports the case. It doesn’t exist. . . .
       We have been turned down everywhere we go.
   Why would anyone invest a dime[?] Not even
   Guido will give us money and why would he[?]
   The case will cost $10 [million] all in, with half
   that to be spent the first year.
       There are only a few full contingency firms
   that can afford to take on a case of this size and
   complexity. They won’t touch this case because we
   have no case. Just a lot of talk.
J.A. 5992 (emphasis added).
    Likewise, in December 2009, Allan Angus, Gabriel’s
former chief technology officer, sent an email stating that
he was “done with” Gabriel because “[t]he real value was
never there anyway. The real value was always going to
be . . . in the fight . . . how to respond to an opposing
attorney’s questions, how to make the case.” J.A. 6006
(emphasis added). The Gabriel plaintiffs assert that these
emails simply reflect frustration that Munck Carter had
resigned and they were left with no collection of the key
documents necessary to pursue their case. The trial court
properly rejected these assertions, however, explaining
that “[w]hile the emails certainly express frustration
towards . . . [Munck Carter], the repeated references to
the utter lack of a case suggest that, not only did [the
Gabriel plaintiffs] not have the necessary evidence to
bring their claims against [the Qualcomm defendants],
12 GABRIEL TECHNOLOGIES CORP. v. QUALCOMM INCORPORATED

they were aware of the evidentiary deficiencies during the
early stages of litigation.” Attorneys’ Fees Order, 2013 WL
410103, at *4.
    The Gabriel plaintiffs’ willingness to post the
$800,000 bond required by the district court is insufficient
to establish that they had a good faith belief in the merits
of their claims. They raised the money for the cost of
their lawsuit from outside investors. The fact that the
Gabriel plaintiffs were willing to gamble with someone
else’s money does not establish that they had a bona fide
belief in the viability of their claims. Nor does the fact
that the Gabriel plaintiffs were, after considerable effort,
able to locate a law firm that would agree to pursue their
suit on a contingency basis preclude a finding of subjec-
tive bad faith. 5 Indeed, as discussed previously, one of
Gabriel’s board members recognized in January 2010 that
most law firms would not agree to take on its suit “be-
cause [it had] no case. Just a lot of talk.” J.A. 5992.
     In the September 2010 order requiring the $800,000
bond, the trial court noted that although the Gabriel
plaintiffs had “been investigating their claims for several
years,” they had been unable “to draw any meaningful
connection” between Locate’s technology and the inven-
tions disclosed in Qualcomm’s patents. J.A. 2421. The
court made clear, moreover, that there was “a strong
likelihood” that the Qualcomm defendants would be
awarded fees under section 285 at the conclusion of the
litigation. J.A. 2421. The Gabriel plaintiffs’ obdurate
refusal to abandon their suit—even after being specifical-

   5    The Qualcomm defendants also sought attorneys’
fees from the Gabriel plaintiffs’ lead trial counsel, Hughes
Hubbard & Reed LLP (“Hughes Hubbard”). They subse-
quently entered into a confidential settlement agreement
with Hughes Hubbard regarding the payment of fees. See
Attorneys’ Fees Order, 2013 WL 410103, at *1 n.1.
GABRIEL TECHNOLOGIES CORP.   v. QUALCOMM INCORPORATED 13

ly warned about the obvious shortcomings in their
claims—strongly supports the trial court’s conclusion that
they maintained this litigation in bad faith. See Kilopass,
738 F.3d at 1311 (emphasizing that a “misguided belief,
based on zealousness rather than reason, is simply not
sufficient by itself to show that a case is not exceptional in
light of objective evidence that [a litigant] has pressed
meritless claims”); Highmark, 687 F.3d at 1309 (explain-
ing that subjective bad faith can be established by show-
ing that the “lack of objective foundation for the claim was
either known or so obvious that it should have been
known by the party asserting the claim” (citations and
internal quotation marks omitted)); see also Eon-Net, 653
F.3d at 1327 (affirming a trial court’s determination that
a patentee “acted in bad faith by exploiting the high cost
to defend complex litigation to extract a nuisance value
settlement” from the accused infringers). Significantly,
the trial court awarded attorneys’ fees under section 285
only for the period after September 20, 2010, the date of
the bond order which expressly notified the Gabriel
plaintiffs of the evidentiary deficiencies in their claims.
Attorneys’ Fees Order, 2013 WL 410103, at *10; see Com-
puter Docking Station Corp. v. Dell, Inc., 519 F.3d 1366,
1379 (Fed. Cir. 2008) (“If the patentee prolongs litigation
in bad faith, an exceptional finding may be warranted.”).
                 V. Litigation Misconduct
     “[I]t is well-established that litigation misconduct and
unprofessional behavior may suffice, by themselves, to
make a case exceptional under § 285.” MarcTec, LLC v.
Johnson & Johnson, 664 F.3d 907, 919 (Fed. Cir. 2012)
(citations and internal quotation marks omitted). Alt-
hough the district court’s exceptional case determination
was grounded primarily on its conclusion that the claims
advanced by the Gabriel plaintiffs were objectively base-
less and brought in subjective bad faith, the court also
held that the Qualcomm defendants had established “a
persuasive case for finding litigation misconduct based
14 GABRIEL TECHNOLOGIES CORP. v. QUALCOMM INCORPORATED

upon [the Gabriel plaintiffs’] less-than-honest actions
throughout the case.” Attorneys’ Fees Order, 2013 WL
410103, at *5 (footnote omitted). We agree that the record
contains significant evidence of litigation misconduct. For
example, the Gabriel plaintiffs attempted to reassert
fraud claims which had previously been dismissed with
prejudice. Furthermore, in a ploy to avoid posting the
$800,000 bond, Gabriel asserted that it had moved its
principal place of business to a residential apartment in
California. At the time, however, Gabriel’s own website
stated that its corporate headquarters was in Omaha,
Nebraska. See Old Reliable Wholesale, Inc. v. Cornell
Corp., 635 F.3d 539, 549 (Fed. Cir. 2011) (“Litigation
misconduct generally involves unethical or unprofessional
conduct by a party or his attorneys during the course of
adjudicative proceedings.” (footnote omitted)).
      VI. The California Uniform Trade Secrets Act
     CUTSA authorizes the award of reasonable attorneys’
fees to the prevailing party in a trade secret misappropri-
ation case. See Cal. Civ. Code § 3426.4. A party seeking
fees under CUTSA must demonstrate that: (1) the trade
secret claim was objectively specious; and (2) it was
brought in bad faith or for an improper purpose. See
FLIR Sys., Inc. v. Parrish, 95 Cal. Rptr. 3d 307, 313 (Cal.
Ct. App. 2009); Gemini Aluminum Corp. v. Cal. Custom
Shapes, Inc., 116 Cal. Rptr. 2d 358, 367-69 (Cal. Ct. App.
2002). An award of fees under section 3426.4 of CUTSA
“is entrusted to the trial court’s discretion and will not be
overturned in the absence of a manifest abuse of discre-
tion, a prejudicial error of law, or necessary findings not
supported by substantial evidence.” Yield Dynamics, Inc.
v. TEA Sys. Corp., 66 Cal. Rptr. 3d 1, 28 (Cal. Ct. App.
2007).
    As the district court correctly determined, the trade
secret misappropriation claims advanced by the Gabriel
plaintiffs were objectively specious and maintained in
GABRIEL TECHNOLOGIES CORP.   v. QUALCOMM INCORPORATED 15

subjective bad faith. Contrary to the Gabriel plaintiffs’
assertions, the trial court did not assess fees under sec-
tion 3426.4 because they failed, at the pleading stage, to
specifically identify any trade secrets that had allegedly
been misappropriated.       Instead, attorneys’ fees were
assessed because the Gabriel plaintiffs “made seven failed
attempts to articulate their trade secrets,” but were never
able to identify the specific secrets that the Qualcomm
defendants had allegedly taken. 6 Attorneys’ Fees Order,
2013 WL 410103, at *7.

    6   The Gabriel plaintiffs complain that the trial
court improperly limited the scope of discovery related to
their trade secret misappropriation claims. We disagree.
Although they were given multiple opportunities to specif-
ically identify the trade secrets purportedly pilfered by
the Qualcomm defendants, their trade secret designations
were ultimately “condemn[ed] . . . to intolerable vague-
ness.” J.A. 5291. Because the Gabriel plaintiffs failed to
identify their trade secrets with reasonable particularity,
the trial court appropriately restricted discovery on their
misappropriation claims. See Herbert v. Lando, 441 U.S.
153, 177 (1979) (Discovery abuse can be prevented if
“judges [do] not hesitate to exercise appropriate control
over the discovery process.”); see also In re MSTG, Inc.,
675 F.3d 1337, 1346 (Fed. Cir. 2012) (emphasizing that
“[c]ourts are required to limit the frequency or extent of
discovery otherwise allowed” in situations where “the
burden or expense of the proposed discovery outweighs its
likely benefit” (citations and internal quotation marks
omitted)); Advanced Modular Sputtering, Inc. v. Superior
Ct., 33 Cal. Rptr. 3d 901, 907 (Cal. Ct. App. 2005) (em-
phasizing that a plaintiff alleging trade secret misappro-
priation under CUTSA must “identify or designate the
trade secrets at issue with sufficient particularity to limit
16 GABRIEL TECHNOLOGIES CORP. v. QUALCOMM INCORPORATED

     From an early point in the litigation, moreover, it be-
came clear that the trade secret misappropriation claims
were time-barred. In January 2003, Clise, after viewing a
publically-available SnapTrack presentation, sent an
email stating that he thought SnapTrack had “rip[ped]
off” Locate’s technology. J.A. 4462. Likewise, Shanley
testified that he became suspicious that Qualcomm was
attempting to misappropriate Locate’s intellectual proper-
ty in the summer of 2004 when Qualcomm proposed that
Gabriel enter into an amended license agreement which
deleted the “proprietary rights” section from the original
licensing agreement. See Trade Secrets Decision, 857 F.
Supp. 2d at 1007. Because the Gabriel plaintiffs knew
that they had a potential trade secret claim by the sum-
mer of 2004, at the very latest, 7 and yet failed to file suit
within three years of that date, their suit was untimely.
See Cypress Semiconductor Corp. v. Superior Ct., 77 Cal.
Rptr. 3d 685, 692-94 (Cal. Ct. App. 2008) (explaining that
a claim for trade secret misappropriation must be brought
within three years of the date a plaintiff knows, or should
know, that proprietary information has been taken). The
Gabriel plaintiffs acted with subjective bad faith when
they obstinately refused to abandon their trade secret
claims even in the face of unequivocal evidence that those
claims were barred by CUTSA’s three-year statute of
limitations. See FLIR, 95 Cal. Rptr. 3d at 319 (explaining
that “[a] trade secrets claim could be brought in good faith
but warrant attorney fees” when the claim is pursued
beyond the point at which it becomes clear that the claim
lacks merit).

the permissible scope of discovery” (citations and internal
quotation marks omitted)).
    7   As the district court correctly noted, there was ev-
idence that the Gabriel plaintiffs became aware that they
had a potential trade secret misappropriation claim as
early as 1999. J.A. 2414.
GABRIEL TECHNOLOGIES CORP.   v. QUALCOMM INCORPORATED 17

                      CONCLUSION
   Accordingly, the order of the United States District
Court for the Southern District of California is affirmed.
                      AFFIRMED