Cases & Deals

Applied Medical Distribution's jury trial win on trade secret misappropriation unanimously upheld by California Court of Appeals

Client(s) Applied Medical Resources Corporation

Jones Day client Applied Medical’s favorable jury trial result was unanimously upheld by the California Court of Appeals, maintaining the permanent injunction against the plaintiff. In 2021, following a seven-week trial, a jury rendered a verdict finding that our client Applied Medical had established that its former employee misappropriated trade secrets and breached the terms of his proprietary information agreement. Based on the jury’s determinations, the trial court granted Applied Medical a permanent injunction, and thereafter awarded attorneys’ fees and costs totaling over $550,000. However, in their decision, the trial court granted a non-suit on the issue of whether plaintiff’s conduct was willful and malicious and granted a motion to exclude Applied from introducing certain evidence on the issue of its damages. Plaintiffs appealed entry of the permanent injunction and Applied cross-appealed the order granting the nonsuit, the evidentiary ruling that prevented it from presenting a substantial component of its claim for damages, and the order regarding attorney’s fees.

On March 8, 2024, the California Court of Appeal issued a unanimous published opinion that upheld the trial court’s decision to grant a permanent injunction and affirmed that Applied Medical prevailed on its trade secret claim; reversed the entry of the nonsuit; as a matter of first impression, held that a plaintiff in a trade secret misappropriation case may recover, as an element of damages, the expert fees incurred to stop or mitigate misappropriation; and concluded that the court abused its discretion in reducing Applied attorneys’ fees award. The Court of Appeal’s opinion will permit Applied Medical the opportunity to present evidence to the jury on its full damages theory and revisit whether plaintiff’s conduct was willful and malicious, in addition to recovering further attorneys’ fees.

Applied Medical Distribution Corp. v. Jarrells, No. 30-2019-01049441 (Cal. App. 4th)