Wellogix, Inc. v. Accenture, L.L.P.

Summarized by:

  • Court: Intellectual Property Archives
  • Area(s) of Law: Trade Secrets, Damages
  • Date Filed: 05-15-2013
  • Case #: 11-20816
  • Judge(s)/Court Below: United States Court of Appeals for the Fifth Circuit
  • LexisNexis Citation: 2013 U.S. App. LEXIS 9758
  • Westlaw Citation: 2013 WL 2096356
  • Full Text Opinion

Punitive damages are appropriate when trade secrets are maliciously appropriated.

Opinion (Higginson): Wellogix, Inc., ("Wellogix") a company that provides software services to oil companies, entered into an agreement with Accenture, LLP ("Accenture") to promote its software. Wellogix shared source code and access to its technology with both Accenture and BP, subject to confidentiality agreements. Accenture began to secretly develop software with SAP for the oil company client, BP America, Inc. (“BP”), using Wellogix's shared information. Wellogix sued BP, Accenture, and SAP in 2008 alleging that they had stolen and misappropriated trade secrets. During arbitration with BP the judge found that Wellogix's source code was a trade secret, and BP breached its confidentiality agreement with Wellogix by making that information available to Accenture and SAP. A suit against Accenture proceeded to trial and the jury returned a verdict for Wellogix in the amount of $26.2 million in compensatory damages and $68.2 million in punitive damages. Accenture appealed. The Court found that the existence of a trade secret is a question of fact to be decided by the judge or jury, and misappropriation under Texas law is established by showing: (1) a trade secret existed; (2) the trade secret was acquired through a breach of a confidential relationship or discovered by improper means; and (3) use of the trade secret without authorization from the plaintiff. Further, evidence at trial supported the jury's finding that Accenture acted with malice. Malice exists if there is a specific intent by the defendant to cause substantial injury, or harm, to the claimant.The Gore guideposts used in this case, reprehensibility and the ratio between punitive and compensatory damages, did not require the Court to find that the punitive damages award was grossly excessive. Accordingly, the Court AFFIRMED the district court's judgment.

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