The Massachusetts Supreme Judicial Court ("SJC") recently analyzed the use of expert testimony regarding "lost profits" damages in a case from Suffolk Superior Court's Business Litigation Session, and provided some guidance relative to the appropriate measure of damages in cases involving misappropriation of trade secrets.
In LightLab Imaging, Inc. v. Axsun Technologies, Inc., LightLab Imaging, Inc. ("LightLab") filed suit in Suffolk Superior Court, alleging that a competitor, Volcano Corporation ("Volcano"), was using its trade secrets relative to certain laser technology after a joint venturer, Axsun Technologies, Inc., ("Axsun") secretly offered itself for sale to Volcano and divulged LightLab's specifications for that technology. At the outset of the case, the court granted a preliminary injunction. Later, a jury returned a favorable verdict for LightLab, concluding that Axsun had violated the confidentiality provision of its contract with LightLab. The jury also found that Volcano tortiously interfered with LightLab's contract and business relationship with Axsun, and that Volcano had misappropriated LightLab's trade secrets. On a separate count under M.G.L. c. 93A, the court found that Axsun and Volcano acted knowingly and willfully, thus entitling LightLab to $400,000 in damages plus attorney's fees totaling $4,500,000.