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Fighting intellectual property theft – securing the largest trade secrets verdict in the U.S. in 2021

A pandemic-caused mistrial couldn’t stop Hogan Lovells from winning $152.29 million in damages for its client ResMan, in this high-stakes case about stolen trade secrets.

Introduction

ResMan, a property management software company, faced a serious threat to its business. Two companies—Karya, a customer, and Expedien, a software development company—were developing a rival software platform. And they were stealing proprietary information from ResMan to do it.

To stop them, ResMan sued Karya and Expedien.“Ultimately, without our intellectual property, the company doesn’t exist,” says Nick Olsen, a ResMan co-founder and its corporate representative at trial. The suit had been going on for about a year when ResMan decided to hire new counsel and contacted Hogan Lovells. We took over the case in June 2020, less than five months before trial.

Solution

For our client to win, our trial team - led by Maria Boyce and Cristina Rodriguez - had to present a solid case and overcome unprecedented COVID-19 challenges. The evidence was on our side: Expedien illegally accessed ResMan’s system more than 1,000 times. But we had to build the case remotely, and we didn’t meet our witnesses in-person until one week before trial.

We argued for two kinds of damages: compensatory and punitive. To qualify for punitive damages, we needed to prove that the defendants acted wilfully and maliciously. A text message from Kayra’s CEO stating, “You messed with the wrong person,” provided an example of malicious intent.

Five days into trial in November 2020, all was going well. But on day six, several people who had been present in the courtroom tested positive for COVID-19. The Judge was forced to declare a mistrial when only five jurors were able to continue with the trial. For ResMan, it was devastating. “The defendants had basically seen our entire playbook,” says Olsen. “The thought crossed my mind; can we do this again?”

The answer was yes. In starting over in March 2021, we turned the situation to our advantage. Four months later, the case was back in court with a new jury. This time, we could use the important admissions we had obtained in our cross-examinations of the defendants’ executives during the first trial to make our case even stronger.

After nine days of trial, the jury began deliberations. They took only two hours to return a unanimous verdict awarding ResMan $32.29 million in compensatory damages plus $120 million in punitive damages—$30 million more in punitive damages than requested.

The Court also issued a permanent injunction to prevent the defendants from misappropriating ResMan’s trade secrets going forward.

Outcome

Olsen’s fight to save his company, his ideas, and his work was an emotional journey. “We had a genuine bond with the trial team,” says Olsen. “They really looked out for our best interests, and they believed in what we were trying to accomplish.” The Jury agreed and awarded ResMan the largest trade secrets misappropriation verdict in the United States in 2021.

$32+m

jury awarded in compensatory damages 

$120m

jury awarded in punitive damages