Ajaxo Inc. v. E Trade Group, Inc.

Opinion

ELIA, J.

Introduction

Following a seven-week trial, on April 22, 2003, a jury found that E*Trade Group Inc. (E*Trade) had breached a mutual nondisclosure agreement it had with Ajaxo Inc. (Ajaxo) by disclosing protected information to Everypath Inc. (Everypath).

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The jury assessed $1.29 million in damages against E*Trade for breach of the nondisclosure agreement.

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In addition, the jury found that Ajaxo was the owner or licensee of a trade secret. The jury found that E*Trade disclosed that trade secret to Everypath without Ajaxo’s consent, and that E*Trade knew or had reason to know that E*Trade’s knowledge of the trade secret was acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use. The jury determined that Ajaxo proved by clear and convincing evidence that E*Trade acted willfully and maliciously in misappropriating Ajaxo’s trade secret.

As to Everypath, the jury found that Ajaxo proved that Everypath acquired and used Ajaxo’s trade secret without Ajaxo’s express or implied consent. Furthermore, the jury found that Ajaxo proved that Everypath knew or had reason to know that Everypath’s knowledge of the trade secret derived from or through a person who owed a duty to Ajaxo to maintain its secrecy. Moreover, the jury found that Ajaxo proved by clear and convincing evidence that Everypath acted willfully and maliciously in misappropriating Ajaxo’s trade secret.

Issues on Appeal

~E*Trade’s Issues on Appeal

E*Trade raises three issues on appeal. First, E*Trade contends that some of the court’s evidentiary rulings deprived E*Trade of its right to a fair trial. Second, the court erred in denying E*Trade’s motion for judgment notwithstanding the verdict. Finally, the court abused its discretion in finding that Ajaxo was the “prevailing party” under Civil Code section 1717.

Ajaxo’s Issues on Appeal

Ajaxo raises five issues on appeal. First, Ajaxo contends that the court erred in granting E*Trade’s and Everypath’s motion for nonsuit on damages for E*Trade’s and Everypath’s misappropriation of Ajaxo’s trade secret. Second, the court erred in granting E*Trade’s and Everypath’s motion for nonsuit on Ajaxo’s claim for a reasonable royalty. Third, the court’s erroneous grant of nonsuit on damages deprived Ajaxo of an award of exemplary damages. Fourth, the trial court erred in denying Ajaxo injunctive relief. Finally, the court erred in failing to award attorney fees for pretrial work.