Judge Slices $50M From Corporate Theft Award

HOUSTON (CN) - Software company Wellogix can either roll the dice with a new trial or accept a $50 million reduction to it exemplary damages award, a federal judge ruled.

After hearing Wellogix's state claims against Accenture for both misappropriation and theft of trade secrets related to software, a jury awarded Wellogix $26 million in compensatory damages and $68.2 million in exemplary damages.

Accenture countered the May 2011 verdict with a renewed motion for judgment as a matter of law and a motion for new trial or remittitur.

U.S. District Judge Keith Ellison rejected Accenture's argument that applicable patents took the mystery out of Wellogix's technology.

"Texas law recognizes that information published in a patent application becomes public and loses trade secret status," Ellison wrote Friday. "However, Texas law also recognizes that trade secret status may be maintained along with patent protection in situations where the patent does not disclose the exact information or details that a plaintiff contends are trade secrets."

Evidence that Wellogix distributed certain documents without a confidentiality agreement and posted information on a publicly available website failed to sway the judge.

Ellison found that Wellogix adequately demonstrated to the jury that Accenture had access to trade secrets and that it misused that information in projects involving BP America and SAP America. BP and SAP were originally named as co-defendants along with Accenture, but the court dismissed SAP for improper venue and Wellogix arbitrated its claims against BP.

Wellogix determined compensatory damages by measuring lost business value, the 31-page order states. One expert "testified that the value of Wellogix dropped to zero after the misappropriation."

But Ellison found that the jury had been too generous in awarding exemplary damages of $68.2 million when Wellogix had asked only for $18.2 million.

Since the extra $50 million was excessive but not unconstitutional, the judge said Wellogix can either accept a reduced exemplary damages award of $18.2 million or face a new trial.

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