8th Circuit Nixes Expert Testimony on Trade Secret Damages in Storage Technology's Suit Against Cisco Systems
The Eighth Circuit has published an opinion upholding the trial court's exclusion of testimony from the damages expert for Storage Technology Corporation in its trade secrets case against Cisco Systems.
Prior to its acquisition by Cisco at a price of $450 million, an entity known as NuSpeed Internet Systems, Inc., had hired away key Storage Tech employees to build an internet data storage product. The Eighth Circuit held that inducing a rival's employees to breach their noncompetition and nondisclosure agreements could constitute an actionable harm for which a restitutionary remedy is available under Minnesota law, but affirmed the trial court's exclusion of Storage Tech's expert evidence on unjust enrichment damages. The panel particularly faulted the expert for imputing the entire $450 million acquisition value of NuSpeed to trade secrets misappropriated from Storage Tech even though NuSpeed concededly had other assets. The panel emphasized evidence that Cisco acquired NuSpeed to exploit NuSpeed's expertise in storage networking software incorporating the then-emergent iSCSI ("internet, Small Computer Systems Interface") standard -- an idea that nobody contended was appropriated from Storage Tech.
See Storage Tech. Corp. v. Cisco Sys., Inc., No. 03-3673 (8th Cir. Jan. 26, 2005) (Loken, Gibson, & Bye, JJ.).
Prior to its acquisition by Cisco at a price of $450 million, an entity known as NuSpeed Internet Systems, Inc., had hired away key Storage Tech employees to build an internet data storage product. The Eighth Circuit held that inducing a rival's employees to breach their noncompetition and nondisclosure agreements could constitute an actionable harm for which a restitutionary remedy is available under Minnesota law, but affirmed the trial court's exclusion of Storage Tech's expert evidence on unjust enrichment damages. The panel particularly faulted the expert for imputing the entire $450 million acquisition value of NuSpeed to trade secrets misappropriated from Storage Tech even though NuSpeed concededly had other assets. The panel emphasized evidence that Cisco acquired NuSpeed to exploit NuSpeed's expertise in storage networking software incorporating the then-emergent iSCSI ("internet, Small Computer Systems Interface") standard -- an idea that nobody contended was appropriated from Storage Tech.
See Storage Tech. Corp. v. Cisco Sys., Inc., No. 03-3673 (8th Cir. Jan. 26, 2005) (Loken, Gibson, & Bye, JJ.).
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