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Where there is a lack of proof indicating what the parties thought the trade secret was worth, courts are then guided by what the plaintiff has proved, whether that be the plaintiff's lost profits or an accounting for the defendant's profits. A complainant may recover either his own lost profits or the defendant's profits, whichever affords the greater recovery.
Appellant Saforo & Associates had originally entered into an arrangement with appellee Porocel Corporation whereby appellee would perform the washing step of the Bayer Scale. At the time the wash water system ultimately used by appellee was constructed, appellant William Evans supervised the construction and operation of the wash system at Porocel. Within a short time, the business relationship between appellee and Saforo deteriorated, and Saforo began looking for an alternative processor of his Bayer Scale. Ultimately, appellant GEO Specialty Chemicals was contracted by Saforo to process the Bayer Scale. Appellee brought an action seeking to enjoin the appellants from processing the Bayer Scale at the GEO facility which had been utilized at Porcel. Appellee also sought damages for the misappropriation of a trade secret, as well as contract damages from Saforo & Associates for failure to pay for the processing completed by appellee. The trial court found that appellants had misappropriated appellee’s trade secret, and consequently, issued an injunction. The court further found that appellee had been damaged in the amount of $ 88,092.73 by the misappropriation of the trade secret and awarded appellee $ 63,500.00 against Saforo, on a theory of an implied contract. Additionally, the court found that the misappropriation was willful and malicious and awarded appellee attorney's fees in the amount of $ 15,000.00, but declined to award prejudgment interest. Appellants challenged the decision, arguing that the trial court erred in finding that the appellee's wash water system constituted a trade secret under Ark. Code Ann. § 4-75-601, and in finding that the appellants willfully misappropriated a trade secret.
Adopting and applying the six factor Vigoro test, there was substantial and credible evidence to support the finding that a trade secret existed that was protected under the Arkansas Trade Secret Law. There was overwhelming evidence that appellants intentionally misappropriated the secret, as appellant employer hired appellant employee, a former plant manager that worked on the secret wash water system, to implement the secret. Although Ark. Code Ann. § 4-75-606 was ambiguous in its allowance of recovery for actual losses, the court reversed the award of damages based on a mixed lost-profit and appellants' gain theory. Finding the American Law Reports Annotation compelling on the subject, the court found that appellee was entitled to only one of lost profits or defendants' gain, not a combination of the two. The award of damages for breach of an implied contract was affirmed because defendants failed to provide receipts to verify their alleged setoff.