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Atl. Inertial Sys., Inc. v. Condor Pac. Indus. of Cal., Inc.

United States District Court for the Central District of California

June 18, 2015, Decided; June 18, 2015, Filed

Case No. 2:08-cv-02947-CAS(PJWx)

Opinion

CIVIL MINUTES - GENERAL 'O' JS-6

Proceedings: (IN CHAMBERS): ORDER RE: PLAINTIFF'S REQUEST FOR AWARD OF A REASONABLE ROYALTY

In February and March of 2011, this trade secret case was tried to a jury by the Court, the Hon. Judge Jacqueline H. Nguyen, United States District Judge, presiding.1 On March 4, 2014, the jury returned a complete defense verdict. Dkt. 300. Subsequent to the verdict, plaintiff filed a motion requesting, among other things, that Judge Nguyen award a reasonable royalty pursuant to Cal. Civ. Code § 3426.3(b). Dkt. 306. On August 25, 2011, Judge Nguyen denied plaintiff's motion. Dkt. 345. Plaintiff appealed. On October 30, 2013, the Ninth Circuit issued a memorandum disposition reversing Judge Nguyen's order declining to award plaintiff a reasonable royalty. The Ninth Circuit remanded to this Court "to determine whether a royalty award is warranted and, if so, in what amount." Dkt. 372 at 3.

I. BACKGROUND2

A. The Original Action

In the 1960s, defendant Sidney Meltzner founded Condor Pacific Industries, Inc. ("Condor I") to manufacture gyroscopes. Condor I produced these gyroscopes for the U.S. military, which integrated them into aircraft as navigational devices. In 2002, Meltzner sold Condor I, including all of its intellectual property, to BAE Systems Inertial Products ("BAE"). Plaintiff Atlantic Inertial Systems Inc. ("AIS") acquired BAE in 2007.

After expiration of the Condor I-BAE sale agreement's non-compete provision, Meltzner founded a new gyroscope-manufacturing corporation with the name Condor Pacific Industries of California, Inc. ("Condor II"). Condor II hired Condor I's former employees, and began operating out of Condor I's old plant in Westlake Village, California.

On May 6, 2008, AIS filed suit against Meltzner and Condor II ("defendants"), alleging that Condor II had misappropriated intellectual property that BAE owned by virtue of Meltzner's sale of Condor I. AIS accused Meltzner of resurrecting Condor I and using the exact same gyroscopic [*3]  drawings sold to AIS in order to sell nearly identical gyroscopes to the U.S. government. AIS' First Amended Complaint ("FAC"), the operative pleading in this action, asserted claims for (1) false designation of origin, (2) infringement of a common law mark, (3) common law unfair competition, (4) misappropriation of trade secrets relating to pricing information, (5) misappropriation of trade secrets related to drawing packages, (6) state law unfair competition and (7) interference with prospective economic advantage. Dkt. 37.

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2015 U.S. Dist. LEXIS 79331 *; 2015 WL 3825318

ATLANTIC INERTIAL SYSTEMS INC. v. CONDOR PACIFIC INDUSTRIES OF CALIFORNIA, INC. ET AL.

Prior History: Atl. Inertial Sys. v. Condor Pac. Indus. of Cal., 2014 U.S. Dist. LEXIS 29242 (C.D. Cal., Mar. 4, 2014)

CORE TERMS

royalty, misappropriation, gyroscopes, drawings, trade secret, defendants', parties, license, factors, patent, negotiations, manufacture, documents, invention, unjust enrichment, royalty rate, damages, secret, misappropriation of trade secrets, intellectual property, terminating sanctions, license agreement, calculating, infringer, Pretrial, licensee, licensor, supplier, competitors, discovery