Facts

Plaintiff Eldorado Stone LLC is a leading, San Diego faux-stone precast veneer manufacturer. Defendants included Alfonso Alvarez, a former employee and Renaissance Stone, a company Alvarez helped to start with the assistance of defendants Rob Hager and Joseph Smith. Alvarez was hired by Eldorado Stone as a process engineer to document and protect the precise formulas used to make its faux-stone veneers.

Plaintiff contended that Alvarez stole dozens of formulas for mix designs and specific manufacturing processes for stone building veneers, by copying the trade secrets to a CD-ROM and then leaving to help start a new company. Plaintiff's forensic computer expert offered evidence of a link to a deleted folder on a seized Renaissance computer which matched a folder name from Eldorado listing its core products. Another engineer testified that the color and production formulas of the two parties, as well as every product offered by Renaissance, were virtually identical.

Plaintiff's counsel also offered evidence that defendants targeted construction jobs plaintiff was set to provide stone veneers for, and then offered the "same" product at a discounted price of 30 percent less.

Result

Jury awarded plaintiff $20,884,775 (includes $15 million for misappropriation of trade secrets and $3,850,000 for punitive damages). The jury found that Alvarez and Renaissance investor Robert Hager misappropriated Eldorado's trade secrets, infringed on plaintiff's trademarks and copyrights, and interfered in the economic relationships between plaintiff and its customers. The jury also found Renaissance president Joseph Smith liable for copyright infringement. The judge decided in post-trial motions to award an additional $1,150,000 in exemplary damages for the misappropriation of trade secrets. Plaintiff's motion for attorneys' fees and costs is currently pending.

Other Information

Plaintiff agreed to remittitur. A motion is pending for a new trial. Plaintiff stipulated in open court that the verdict be reduced. FILING DATE: Dec. 23, 2004.

Length

two weeks