Aristo Vojdani v. Pharmasan Labs, Incorporated , 741 F.3d 777 ( 2013 )


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  •                                In the
    United States Court of Appeals
    For the Seventh Circuit
    Nos. 13-1354 and 13-1242
    ARISTO VOJDANI and
    IMMUNOSCIENCES LAB, INC.,
    Plaintiffs-Appellees/Cross-Appellants,
    v.
    PHARMSAN LABS, INC. and
    NEUROSCIENCE, INC.,
    Defendants-Appellants/Cross-Appellees.
    Appeals from the United States District Court for the
    Western District of Wisconsin.
    No. 10-cv-37-wmc — William M. Conley, Chief Judge.
    ARGUED SEPTEMBER 10, 2013 — DECIDED DECEMBER 20, 2013
    Before WOOD, Chief Judge, and EASTERBROOK and
    HAMILTON, Circuit Judges.
    HAMILTON, Circuit Judge. Plaintiffs Immunosciences Lab,
    Inc. and its owner, Dr. Aristo Vojdani, were in the business of
    developing and selling medical tests and testing materials. In
    2007, defendants Pharmsan Labs, Inc. and NeuroScience, Inc.
    —sister companies offering medical testing to consumers—
    2                                     Nos. 13-1354 and 13-1242
    wanted to expand their offerings. Vojdani and
    Immunosciences (we refer to them collectively as “Vojdani”)
    and Pharmsan and NeuroScience (collectively “NeuroScience”)
    decided to collaborate, but the business relationship fell apart
    within two years.
    These appeals concern two trials and two claims for breach
    of contract brought by Vojdani against NeuroScience. In the
    first trial, a jury decided the first claim—that NeuroScience did
    not pay Vojdani what it had contracted to pay for medical
    testing materials—in favor of NeuroScience. But the district
    court ordered a new trial on that claim, concluding that this
    verdict was undermined by flawed special verdict questions.
    The jury in the second trial found for Vojdani but awarded him
    much less money than he was seeking. NeuroScience contends
    on appeal that the court’s grant of a new trial was an abuse of
    discretion. Vojdani cross-appeals, arguing that the court
    abused its discretion by allowing NeuroScience to argue in the
    new trial that the parties had orally modified their written
    contract.
    The second claim is that NeuroScience breached a separate
    confidentiality agreement by continuing to use Vojdani’s
    testing methods after the parties ended their business relation-
    ship. The jury in the first trial awarded Vojdani nearly $1.2
    million on this claim, but the district court granted judgment
    as a matter of law for NeuroScience, explaining that Vojdani
    had relied on an impermissible damages theory. As part of his
    cross-appeal, Vojdani seeks reinstatement of the original
    verdict on this claim.
    Nos. 13-1354 and 13-1242                                      3
    We affirm the district court’s judgment in all respects. As
    we explain in Part I, the court acted within its discretion in
    granting the new trial on the first claim and including Neuro-
    Science’s contract modification theory within the scope of the
    second trial. We explain in Part II that the award for breach of
    the confidentiality agreement was not based on a permissible
    measure of damages that had actually been presented to the
    jury, so the district court correctly entered judgment as a
    matter of law for NeuroScience on that claim.
    I. First Claim — Breach of the Letter of Intent
    A. Factual and Procedural Background
    Vojdani and NeuroScience signed a “letter of intent” in
    June 2007, and despite that provisional title, both sides agree
    it was a binding contract. The letter of intent provided in part
    that Vojdani’s company would ship medical testing plates and
    components to NeuroScience accompanied by “an invoice for
    the material at 50% of client price.” The parties would “absorb
    their own costs of operation,” and NeuroScience would pay the
    invoices “according to [NeuroScience’s] monthly sales.” The
    agreement in the letter was set to expire after 180 days, during
    which time a longer-term agreement was to be hammered out.
    After the parties signed the letter of intent, Vojdani regu-
    larly shipped testing plates and components to NeuroScience
    and submitted monthly invoices for 50 percent of the price that
    NeuroScience would charge customers for each test. NeuroSci-
    ence interpreted its obligation to pay Vojdani “50% of client
    price” according to its “monthly sales” as an obligation to pay
    only for those tests it actually sold. Vojdani accepted these
    payments without complaint and never included a past-due
    4                                     Nos. 13-1354 and 13-1242
    amount on any invoice. That pattern continued for the 180
    days covered by the letter of intent and during an oral exten-
    sion of the agreement that lasted for several months. No
    written agreement ever replaced the letter of intent, though
    several draft agreements were exchanged. In June 2009,
    NeuroScience notified Vojdani that it would no longer do
    business with him. All shipments and payments then ceased.
    Vojdani responded to NeuroScience’s decision to sever ties
    with him by suing in federal court for breach of contract.
    Federal jurisdiction was based on diversity of citizenship.
    (Vojdani and Immunosciences are citizens of California;
    Pharmsan and NeuroScience are citizens of Wisconsin.) Of the
    numerous claims that went to trial, the first of the two involved
    in these appeals was that NeuroScience breached the letter of
    intent by not paying Vojdani’s invoices in full.
    In the first trial, NeuroScience attempted to defeat this
    claim by arguing that the ambiguous terms of the letter of
    intent did not require full payment of the invoices. Vojdani’s
    acceptance of payments for only those tests that were actually
    sold, without complaining that he was being short-changed,
    reflected the parties’ actual agreement according to NeuroSci-
    ence. In the alternative, NeuroScience argued, even if the terms
    of the letter of intent did in fact require payment in full, the
    parties had modified the terms in line with what NeuroScience
    had actually paid.
    On this claim, the first jury was instructed on contract
    modification, including the point that contracts can be modi-
    fied orally or by “conduct or other means of expression”
    indicating that “strict performance was not insisted upon.” The
    Nos. 13-1354 and 13-1242                                      5
    problem here arose from the design of the special verdict form,
    which did not include any question about contract modifica-
    tion. Although NeuroScience had asked (somewhat vaguely)
    for questions that would allow the jury to consider “what
    happened” after the contract’s execution and had opined that
    the proposed questions were confusing, the court dismissed
    the company’s concerns. The jury was asked on this claim only:
    (1) whether Vojdani had proven by a preponderance of the
    evidence that NeuroScience “agreed in the June 21, 2007 letter
    of intent … to pay plaintiff the invoiced amount for each
    [testing] plate sent to defendant NeuroScience whether the
    plate was sold to a client or not,” and (2) whether Vojdani had
    proven by a preponderance of the evidence that NeuroScience
    “did not pay the plaintiff the full amount of the invoices … .”
    The jury answered the first question yes but answered the
    second no, thus reaching a verdict for NeuroScience on the
    claim.
    Vojdani then filed a motion under Federal Rule of Civil
    Procedure 59(a) seeking a partial new trial on this claim. He
    argued that the manifest weight of the evidence was against
    the jury’s answer of no to the second verdict question. Neuro-
    Science’s witnesses, he pointed out correctly, had conceded
    that the invoices were not paid in full. NeuroScience argued
    that the jury’s answer to the second question was its way of
    accounting for the contract’s modification.
    The district court granted Vojdani’s motion because
    NeuroScience admittedly had not paid the full amount of the
    invoices. But the court settled on a broader scope for the new
    trial than Vojdani wanted. The new jury, unlike the first, would
    be asked expressly whether the parties had modified the
    6                                     Nos. 13-1354 and 13-1242
    written contract after its execution. The first jury’s yes answer
    to the first special verdict question—whether NeuroScience
    had agreed in the letter of intent to pay the invoices in full—
    would stand. Vojdani objected to any question about modifica-
    tion. He argued that NeuroScience had waived such questions
    by not requesting them in the first trial. The court responded
    that NeuroScience had sufficiently preserved the issue.
    Just before the second trial, the case was reassigned from
    Judge Crabb to Chief Judge Conley for scheduling reasons. The
    second jury found in response to more specific verdict ques-
    tions that the parties had orally modified the contract six
    months after its execution so as to allow NeuroScience to pay
    for only those tests it actually sold. Based on stipulations about
    the amount invoiced before the modification and the amount
    NeuroScience actually paid, the district court entered judgment
    in favor of Vojdani for $187,000 on this claim.
    B. Analysis
    NeuroScience argues on appeal that the district court’s
    grant of the partial new trial should be reversed. In its view,
    the jury’s finding that Vojdani had not “proven by a prepon-
    derance of the evidence that defendant NeuroScience did not
    pay the full amount of the invoices” could be understood as an
    acknowledgment that the parties had modified the contract.
    The court was obliged to read the verdict that way, NeuroSci-
    ence contends, and thereby to reconcile the evidence with the
    verdict.
    We review for abuse of discretion a district court’s decision
    to grant a new trial under Rule 59(a). ABM Marking, Inc. v.
    Zanasi Fratelli, S.R.L., 
    353 F.3d 541
    , 543 (7th Cir. 2003); Medcom
    Nos. 13-1354 and 13-1242                                                      7
    Holding Co. v. Baxter Travenol Labs., Inc., 
    106 F.3d 1388
    , 1397 (7th
    Cir. 1997).1 A jury’s answers to flawed special verdict questions
    should stand if the answers can be reconciled with the evi-
    dence and with one another in any reasonable way, Medcom
    Holding, 
    106 F.3d at
    1401–02, but that standard allows for
    judgment and discretion.
    The district court here used its superior vantage point to
    make a decision well within its discretion. The court reason-
    ably concluded that the jury’s answer to the second question
    on the verdict form in the first trial was contrary not only to the
    manifest weight of the evidence but to the undisputed evi-
    dence. The jury’s answer to the second question—that Vojdani
    had failed to prove that NeuroScience did not pay the invoices
    —was inconsistent with NeuroScience’s admission that it did
    not pay the invoices in full. NeuroScience’s theory—that the
    jurors agreed with its modification argument and expressed
    their conclusion by answering no to the second question—
    might be true, but it remains purely speculative because of the
    way the special verdict questions were framed.
    Confusing special verdict questions can require reversal on
    appeal. See Burger v. Int’l Union of Elevator Constructors Local
    No. 2, 
    498 F.3d 750
    , 754 (7th Cir. 2007) (new trial on damages
    1
    Concerns about the Seventh Amendment once caused us to apply a
    “somewhat more exacting” standard of review to a grant of a new trial than
    to a denial, but we dropped that approach after the Supreme Court decided
    Gasperini v. Center for Humanities, Inc., 
    518 U.S. 415
     (1996). See Medcom
    Holding, 
    106 F.3d at 1397
    . Echoes of the old approach still surface occasion-
    ally, see, e.g., Galvan v. Norberg, 
    678 F.3d 581
    , 588 (7th Cir. 2012), but we
    reaffirm that a district court’s decision to grant a new trial is to be reviewed
    simply for abuse of discretion.
    8                                      Nos. 13-1354 and 13-1242
    needed because confusing verdict form may have caused jury
    to award damages on impermissible theory); Mattson v.
    Schultz, 
    145 F.3d 937
    , 939 (7th Cir. 1998) (“Ambiguous, biased,
    misleading or confusing [special verdict] questions may
    warrant reversal.”). We see no reason to reject the district
    court’s decision in this case to correct the problem on its own.
    Perhaps the district court also could have reasonably adopted
    Neuro-Science’s theory, but borderline cases are precisely
    where the district court must be allowed to exercise its discre-
    tion. We find no abuse of that discretion in the grant of a
    partial new trial.
    In his cross-appeal, Vojdani argues that the scope of the
    new trial was too broad. He insists that NeuroScience should
    not have been permitted to argue in the second trial that the
    agreement in the letter of intent was later modified. As he sees
    it, NeuroScience waived any right to special verdict questions
    on modification during the first trial. In support he cites
    Federal Rule of Civil Procedure 49(a)(3), which says that a
    “party waives the right to a jury trial on any issue of fact raised
    by the pleadings or evidence but not submitted to the jury”
    unless the party demands that the issue be submitted. He also
    relies on our statement in In re Rhone-Poulenc Rorer, Inc., 
    51 F.3d 1293
    , 1303 (7th Cir. 1995), that the “right to a jury trial in
    federal civil cases, conferred by the Seventh Amendment, is a
    right to have juriable issues determined by the first jury
    impaneled to hear them (provided there are no errors warrant-
    ing a new trial), and not reexamined by another finder of fact.”
    Our deferential review of a district court’s decision to grant
    a partial new trial under Rule 59 naturally extends to the
    district court’s decisions about the scope of the new trial. See,
    Nos. 13-1354 and 13-1242                                          9
    e.g., McClain v. Owens-Corning Fiberglas Corp., 
    139 F.3d 1124
    ,
    1128 (7th Cir. 1998) (affirming grant of new trial only on
    damages). The formulation of special verdict questions is also
    a matter committed to the district court’s sound discretion.
    Mattson, 
    145 F.3d at 938
    ; U.S. Fire Ins. Co. v. Pressed Steel Tank
    Co., 
    852 F.2d 313
    , 316 (7th Cir.1988).
    The district court did not abuse its discretion by allowing
    the contract modification issue to be presented to the second
    jury. When flawed special verdict questions require a new trial,
    the district court itself can and should correct the problem. See
    Fort Howard Paper Co. v. Standard Havens, Inc., 
    901 F.2d 1373
    ,
    1375–77 (7th Cir. 1990) (upholding exclusion of special verdict
    questions from second trial that should not have been asked at
    first trial). Here the district court had assured NeuroScience
    before the first trial that it could argue its contract modification
    defense to the jury. At the same time the court appears to have
    mistakenly rebuffed NeuroScience’s concern that the special
    verdict questions were confusing and did not account ade-
    quately for the possibility of contract modification. Correcting
    that mistake was proper.
    The authorities Vojdani cites do not undermine our
    conclusion. Rule 49, far from blocking answers to previously
    unsubmitted special verdict questions, allows the court to
    answer such questions on its own if it so chooses. Fed. R. Civ.
    P. 49(a)(3). Even if NeuroScience had waived under Rule 49 its
    right to special verdict questions on modification, a district
    court has broad discretion to relieve a party of waivers of
    issues, claims, or defenses so long as the other party is given
    sufficient notice. See Pactiv Corp. v. Rupert, 
    724 F.3d 999
    , 1003
    (7th Cir. 2013) (district court had discretion to excuse plaintiff’s
    10                                     Nos. 13-1354 and 13-1242
    waiver of his best theory for relief). And our conclusion in
    Rhone-Poulenc that issues decided by one jury should not be
    reconsidered by another “provided there are no errors war-
    ranting a new trial” does not bar asking the second jury in this
    case about NeuroScience’s contract modification theory. The
    district court reasonably concluded that NeuroScience had
    raised the modification issue, that the design of the first special
    verdict prevented a clear answer to the question, and that the
    modification issue simply was not resolved by the first jury.
    Judge Crabb acted within her discretion when she determined
    that fairness required the second jury to decide the modifica-
    tion issue. We affirm the award of $187,000 to Vojdani on this
    claim.
    II. Second Claim — Breach of the Confidentiality Agreement
    A. Factual and Procedural Background
    Two months before Vojdani and NeuroScience executed the
    letter of intent in 2007, they entered into a confidentiality
    agreement. They agreed that while they explored a possible
    collaboration, they would exchange unspecified confidential
    information and that the exchanged information would be kept
    confidential and would not be used outside of the collaboration
    for five years, subject to certain exceptions. As part of the
    parties’ later letter of intent, the parties agreed that Vojdani
    would provide NeuroScience with certain testing methods he
    had developed for use with third-party testing kits and that the
    two would “split the revenue of such tests 50/50.” NeuroSci-
    ence paid Vojdani to use his testing methods through the end
    of 2008. NeuroScience then stopped paying yet continued to
    use Vojdani’s methods. According to Vojdani’s testimony, he
    Nos. 13-1354 and 13-1242                                     11
    asked NeuroScience to “return our confidential and propri-
    etary information,” but to no avail. (The damages verdict at
    issue on appeal concerns NeuroScience’s failure to pay only
    after June 5, 2009, when the business relationship was com-
    pletely over.)
    Vojdani claimed that the testing methods he supplied were
    confidential, making NeuroScience’s unauthorized use of them
    after the business relationship ended a violation of the confi-
    dentiality agreement. During the first trial, which was the only
    trial on this claim, NeuroScience responded that all of the
    testing procedures Vojdani had provided were publicly
    available or had been significantly altered by NeuroScience,
    two conditions that would except them from the confidential-
    ity agreement. NeuroScience also argued that Vojdani could
    not prove damages from any violation of the agreement. He
    was no longer selling the tests, so he could not show that
    NeuroScience’s use of his testing methods cost him any sales.
    Vojdani countered that he had lost 50 percent of NeuroSci-
    ence’s revenue from performing the tests, the amount that he
    had been receiving under the letter of intent before NeuroSci-
    ence canceled that agreement. Vojdani made clear, though, that
    the breach he was alleging was of the confidentiality agree-
    ment alone. Under that theory, the payment term in the
    expired letter of intent could have been relevant only as a
    measure of damages. The confidentiality agreement contained
    no payment terms and specified that it was not a licensing
    agreement. To make matters even worse for Vojdani, he
    repeatedly disclaimed any theory that he was seeking a
    reasonable royalty as a measure of damages under the confi-
    dentiality agreement.
    12                                   Nos. 13-1354 and 13-1242
    During the trial, NeuroScience moved for judgment as a
    matter of law on this claim under Federal Rule of Civil
    Procedure 50(a), arguing that Vojdani could not prove dam-
    ages. The court denied the motion and the claim went to the
    jury. The jury’s special verdict on liability for breach of the
    confidentiality agreement found: (1) that Vojdani had “proven
    by a preponderance of the evidence that after June 5, 2009
    defendant NeuroScience continued to use any testing methods
    provided” by Vojdani,” (2) that no exception to the confidenti-
    ality agreement permitted that use, and (3) that NeuroScience’s
    violation of the agreement harmed Vojdani.
    During the damages phase of the trial, the jury was
    instructed as follows:
    The fundamental basis for an award of damages
    for breach of contract is just compensation for
    losses necessarily flowing from the breach. A
    party whose contract has been breached is not
    entitled to be placed in a better position because
    of the breach than the party would have been
    had the contract been performed. The injured
    party is entitled to the benefit of its agreement,
    which is the net gain it would have realized from
    the contract but for the failure of the other party
    to perform.
    The jury awarded Vojdani $1,165,230 in damages for NeuroSci-
    ence’s breach of the confidentiality agreement. (The parties
    agree that some portion of this award was for prospective
    damages, though that is not a critical point on appeal.)
    Nos. 13-1354 and 13-1242                                      13
    NeuroScience then renewed its motion for judgment as a
    matter of law on this claim. See Fed. R. Civ. P. 50(b). NeuroSci-
    ence explained that Vojdani had presented no evidence of
    losses flowing from a breach of the confidentiality agreement.
    Although he was entitled to be put in the position he would
    have been in but for the breach, the confidentiality agreement
    merely prohibited NeuroScience from using the testing
    methods. NeuroScience’s compliance with the agreement
    would not have benefitted Vojdani financially unless they were
    in competition. And as NeuroScience reiterated, Vojdani had
    made no attempt to sell the tests himself during the alleged
    breach, so NeuroScience’s violation of the agreement could not
    have taken away sales he might have made.
    Judge Crabb initially denied the Rule 50(b) motion, explain-
    ing that Vojdani was entitled to a reasonable royalty for the use
    of his testing methods and that the agreement in the expired
    letter of intent was good evidence of what a reasonable royalty
    would have been. But on reconsideration, Judge Crabb granted
    the motion, explaining that Vojdani had never argued for a
    reasonable royalty and that the jury had not been instructed on
    a reasonable royalty or any other measure of damages that
    could justify the award.
    B. Analysis
    Vojdani challenges the district court’s grant of NeuroSci-
    ence’s renewed motion for judgment as a matter of law, which
    vacated the verdict of nearly $1.2 million for breach of the
    confidentiality agreement. Vojdani argues that the money
    would merely compensate him for the “actual loss” he suffered
    from the breach. NeuroScience responds that Vojdani did not
    14                                    Nos. 13-1354 and 13-1242
    and cannot prove any damages because he was not made
    worse off by the confidentiality agreement’s violation.
    We review de novo the district court’s grant of judgment as
    a matter of law. Khan v. Bland, 
    630 F.3d 519
    , 523 (7th Cir. 2010).
    A damages award the district court has set aside will not be
    reinstated on appeal based on a theory that was never pre-
    sented to the jury. See Liu v. Price Waterhouse LLP, 
    302 F.3d 749
    ,
    756 (7th Cir. 2002) (upholding remittitur because plaintiff’s
    theory justifying the award was never presented to the jury).
    The decisive issue, then, is whether the jury could have
    applied the instructions it received to the evidence in the
    record and concluded from it that Vojdani is entitled to $1.2
    million for NeuroScience’s breach. The jury was instructed that
    the non-breaching party, Vojdani, should be placed in the
    position he would have occupied but for the breach, which is
    the canonical understanding of damages for breach of contract
    and also the standard in Wisconsin. United Concrete & Const.,
    Inc. v. Red-D-Mix Concrete, Inc., 
    836 N.W.2d 807
    , 824 (Wis.
    2013). The non-breaching party may recover expectation
    damages and any other losses foreseeably flowing from the
    breach. 
    Id.
     As the jury here was also instructed, though, the
    non-breaching party may not be “placed in a better position
    because of the breach than he would have been [in] had the
    contract been performed.” Dehnart v. Waukesha Brewing Co.,
    
    124 N.W.2d 664
    , 670–71 (Wis. 1963).
    The loss Vojdani claims is 50 percent of NeuroScience’s
    revenues from tests it performed using his methods after their
    business relationship ended. This is the amount Vojdani would
    have received under the letter of intent, but that agreement had
    Nos. 13-1354 and 13-1242                                       15
    expired before the time in question. Vojdani has said repeat-
    edly, both in this court and the district court, that his claim
    about the ongoing use of his testing methods is for breach of
    the confidentiality agreement alone. He has not argued that the
    payment agreement in the letter of intent was extended orally
    or otherwise beyond June 2009—in which case the confidenti-
    ality agreement would be irrelevant. Nor was the jury asked to
    decide whether the agreement was extended. (Perhaps
    Vojdani’s clearest statement on what he is arguing is found in
    his reply brief: “Contrary to Neuroscience’s misplaced charac-
    terizations, Vojdani’s damage theories do not assume that the
    relevant breach was failure to pay 50% of its gross revenues.
    Instead, the relevant breach was Neuroscience’s use of
    Vojdani’s confidential information after June 5, 2009, the day
    the parties’ business relationship terminated.”)
    On this claim for breach of the confidentiality agreement,
    the expired letter of intent can be relevant only as a measure of
    damages. Yet NeuroScience is correct on a critical point. If it
    had complied with the confidentiality agreement’s requirement
    that the company not use Vojdani’s proprietary information
    outside of their collaboration, Vojdani would have gained
    nothing. His methods simply would not have been used after
    the collaboration ended.
    One possible answer to that argument might be a “diverted
    trade” theory, under which a breaching party’s profits may be
    a reasonable proxy for the non-breaching party’s losses and
    thus a suitable measure of damages. See Blue Ribbon Feed Co. v.
    Farmers Union Cent. Exch., Inc., 
    731 F.2d 415
    , 421 (7th Cir. 1984)
    (trade name infringement under Wisconsin law). But the
    record in this case is bereft of any evidence that NeuroScience’s
    16                                      Nos. 13-1354 and 13-1242
    breach cost Vojdani a single sale. In fact, he seems to have
    made no attempt to compete with NeuroScience during the
    time it was breaching the confidentiality agreement. See 
    id.
    (“Requisite to an award of the defendant’s profits under the
    theory of diverted trade … is a finding that plaintiff and
    defendant were in competition.”); see also U.S. Naval Inst. v.
    Charter Communications, Inc., 
    936 F.2d 692
    , 696–97 (2d Cir. 1991)
    (explaining that an award based on the breaching party’s
    profits is normally disallowed as punitive if it exceeds the non-
    breaching party’s losses). In any event, Vojdani presented the
    jury with a calculation of NeuroScience’s gross revenues rather
    than its profits, so this theory is not available to sustain the
    verdict.
    We do not hold that damages cannot be awarded for breach
    of a confidentiality agreement when the parties are not in
    direct competition. One obvious remedy for such a breach,
    when the confidential information is used by the defendant for
    its own commercial purposes, is a reasonable royalty. See
    Celeritas Technologies, Ltd. v. Rockwell Int’l Corp., 
    150 F.3d 1354
    ,
    1359 (Fed. Cir. 1998) (affirming plaintiff’s verdict in similar
    breach of contract case based on reasonable royalty theory). A
    reasonable royalty is the amount an unauthorized user of
    proprietary information would have agreed to pay if negotiat-
    ing in good faith. Forest Labs., Inc. v. Pillsbury Co., 
    452 F.2d 621
    ,
    627 (7th Cir. 1971). Judge Crabb relied upon this damages
    theory when she initially upheld this verdict, recognizing that
    the payment terms in the letter of intent provided unusually
    reliable evidence of the amount NeuroScience probably would
    have been willing to pay to continue using Vojdani’s testing
    methods.
    Nos. 13-1354 and 13-1242                                     17
    Nevertheless, we agree with Judge Crabb’s ultimate
    conclusion that the award cannot be upheld as a reasonable
    royalty. Unlike the Celeritas plaintiff, who explicitly sought
    damages based on a reasonable royalty theory, Vojdani never
    pursued that theory at trial. He never argued it, never asked
    for instructions on it, and never presented evidence on it.
    NeuroScience thus had no reason or opportunity to argue
    against it. Even on appeal Vojdani argues that a reasonable
    royalty would not be the proper measure of his damages. He
    insists that he is seeking only standard expectation damages.
    Questions about a reasonable royalty, he says, are “nothing
    more than irrelevant distractions.”
    We do not understand the reasons he has taken that
    position, but we cannot rescue the jury’s verdict based on a
    reasonable royalty theory that he has abjured repeatedly in the
    district court and in this court, so that NeuroScience never had
    an opportunity or a reason to respond to the theory. Cf. Pactiv
    Corp. v. Rupert, 
    724 F.3d 999
    , 1001 (7th Cir. 2013) (district
    judges “sometimes have the authority to relieve parties of their
    forfeitures …, but if they do this they must notify the other
    side, so that it can meet the argument”); Southern Illinois
    Riverboat Casino Cruises, Inc. v. Triangle Insulation and Sheet
    Metal Co., 
    302 F.3d 667
    , 677–78 (7th Cir. 2002) (district judge
    may decide case based on issue the court has raised sua sponte
    but must first give parties notice and opportunity to respond)
    In this case, the district court correctly found that Vojdani
    had simply failed to present to the jury the only theory that
    might have supported a damages award for the breach of the
    confidentiality agreement, so NeuroScience never had an
    opportunity to offer evidence or argument on the theory.
    18                                 Nos. 13-1354 and 13-1242
    Despite his awareness that NeuroScience continued to use his
    testing methods, Vojdani also chose not to pursue an injunc-
    tion. Instead, he sought to insert the payment terms of the
    expired letter of intent into the confidentiality agreement
    without justifying that synthesis under the law. The jury
    understandably may have thought that NeuroScience should
    not be allowed to benefit from its breach, but Vojdani simply
    did not supply the jury with the evidence, argument, or
    instructions to avoid that result.
    The judgment of the district court is AFFIRMED in all
    respects. Each side shall bear its own costs.