Ajaxo, Inc. v. E*Trade Financial Corp.Annotate this Case
In 2003, jury found E*Trade liable for trade secret misappropriation and for breach of a mutual nondisclosure agreement with Ajaxo. The jury awarded damages only for the breach of contract after the court granted a nonsuit on the issue of damages for trade secret misappropriation. On remand, in 2008, a jury found no net damages for unjust enrichment and awarded nothing. The court denied Ajaxo’s request to seek a reasonable royalty under the California Uniform Trade Secret Act (Civ. Code 3426-3426.11). On second remand, the court held a bench trial, declined to award any royalty, and awarded E*Trade its costs as the prevailing party.
The court of appeal affirmed. The trial court did not abuse its discretion by declining to award any reasonable royalty despite the available evidence from which a reasonable royalty theoretically might have been derived, considering its findings on the evidence, application of apportionment principles from patent law, exclusion of expert testimony and analysis of Ajaxo’s royalty model, and treatment of the “Georgia-Pacific factors” for determining a royalty rate in intellectual property disputes. The trial court did not err in its prevailing party determination and costs award despite the practical effect of Ajaxo having already obtained full satisfaction of what became a separate, final judgment in its favor following the 2006 remittitur from the first appeal, including costs.