BladeRoom Group Ltd. et al. v. Facebook et al.

Northern District

U.S. District Judge Edward J. Davila

Plaintiffs' Lawyers: Jeffrey M. Fisher, Julia F. Kropp, Eugene Y. Mar, Erik C. Olson, James A. Reese, Farella Braun & Martel LLP

Defense Lawyers: Rudolph A. Telscher Jr., Steve E. Holtshouser, Husch Blackwell LLP; John Christopher Jaczko, Melinda M. Morton, Procopio Cory Hargreaves & Savitch LLP

BladeRoom Group Ltd. started collaborating with Facebook Inc. and Emerson Electric Co., an engineering services provider, to build one of its next-generation data centers for the technology company in 2011.

After completing the project, Emerson started to market its own data centers that were suspiciously similar to BladeRoom's designs, the plaintiffs said.

Three years after filing the initial complaint, plaintiffs' attorneys Jeffrey M. Fisher, Julia F. Kropp, Eugene Y. Mar, Erik C. Olson and James A. Reese of Farella Braun & Martel LLP were able to convince a San Jose federal jury that Emerson used trade secrets learned from its collaboration with BladeRoom to build its own data centers.

The result was a $30 million verdict, including $10 million for lost profits and $20 million for unjust enrichment, against Emerson in May after settling with Facebook for an undisclosed amount a month earlier. BladeRoom Group Ltd. et. al. v. Facebook et al., 15-CV01370 (N.D. Cal, filed March 23, 2015).

More damages may come down the road because plaintiffs' attorneys were able to prove Emerson's trade secret misappropriation was willful and malicious.

"The jury was out for only a couple of hours and that was among the findings they made," Fisher said, adding that his team filed motions for enhancement of the jury award in addition to attorney fees and an injunction prohibiting Emerson from continuing to market BladeRoom's data center designs.

Mar said the legal team's strategy was to take the jury through a "compelling timeline of facts" that illustrated "just how innovative our client's technology was."

Plaintiffs' attorneys pointed to testimony by BladeRoom CEO Paul Rogers, who did an effective job of explaining, showing and drawing pictures of how unique were their solutions to common data center problems, such as overheating.

"The jury came away with a good sense of his depth of knowledge," Mar said.

Emerson argued that BladeRoom's information was neither confidential nor a trade secret, and that it did not use the plaintiffs' building methods in breach of the nondisclosure agreement. The defense was represented by Rudolph A. Telscher Jr. and Steve E. Holtshouser of Husch Blackwell LLP.

U.S. District Judge Edward J. Davila, who presided over the case, denied the defense's motion for judgment as a matter of law in August.

Holtshouser said Emerson would "definitely" appeal the verdict.

"The importance of this case is that the smaller company with the novel technology was able to prevail despite going up against a large corporation," Fisher said. "It sends a message related to the importance of nondisclosure agreements and protecting technology."

-- Winston Cho