Both federal and California state courts recognize that lost profits are necessarily an estimate, and that their amount cannot be shown with mathematical precision. The court upholds awards of lost profit damages so long as they are supported by substantial evidence.
A consulting company sued a foreign manufacturer of data storage card technology and a foreign holder of a data storage card trademark for alleged misconduct arising from the failure to consummate a partnership agreement. The consulting company alleged that the manufacturer breached the agreement to provide data storage technology which the company intended to market to the healthcare industry. The jury determined that the manufacturer breached the agreement and that the company was entitled to use the subject trademark in the United States market.
Was a jury decision that a consulting company entitled to use the subject trademark in the United States market supported by substantial evidence?
The appellate court affirmed the decision of the trial court. It first held that the manufacturer was not a party to the agency agreement between the company and the manufacturer's subsidiary, and thus the integration clause in the agency agreement did not bar evidence of the oral agreements between the company and the manufacturer. Further, the company's invocation of equitable estoppel to bar a statute of frauds defense did not preclude an award of lost profits, the expert testimony sufficiently supported the award of estimated lost profits, and the total amount of damages awarded was not unreasonable. Finally, the proper retroactive application of trademark registration procedures clearly indicated that the company was the owner of the trademark in the United States.