Vention Medical Advanced Components, Inc. d/b/a Advanced Polymers, a Vention Medical Company v. Nikolaos D. Pappas & a. , 188 A.3d 261 ( 2018 )

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THE SUPREME COURT OF NEW HAMPSHIRE
_________________________
Merrimack
No. 2016-0696
VENTION MEDICAL ADVANCED COMPONENTS, INC. D/B/A ADVANCED
POLYMERS, A VENTION MEDICAL COMPANY
v.
NIKOLAOS D. PAPPAS & a.
Argued: October 25, 2017
Opinion Issued: June 8, 2018
Welts, White & Fontaine, P.C., of Nashua (Jack S. White on the brief), and
Cook, Little, Rosenblatt & Manson, PLLC, of Manchester (Arnold Rosenblatt and
Kathleen Mahan on the brief, and Mr. Rosenblatt orally), for the plaintiff.
Devine, Millimet & Branch, Professional Association, of Manchester
(Steven E. Grill on the brief and orally), for the defendants.
LYNN, C.J. The defendants, Nikolaos D. Pappas (Pappas) and Ascend
Medical, Inc. (Ascend), appeal multiple orders of the Superior Court
(McNamara, J.) ruling that they misappropriated trade secrets of the plaintiff,
Vention Medical Advanced Components, Inc. d/b/a Advanced Polymers, a
Vention Medical Company (Vention), in violation of the New Hampshire
Uniform Trade Secrets Act, RSA chapter 350-B (2009) (UTSA). Vention cross-
appeals the trial court’s denial of its request for attorney’s fees. We affirm.
I
The pertinent facts follow. Vention is a medical components
manufacturer in the medical device industry. Vention makes medical balloons,
medical tubing, and heat shrink tubing (HST). Vention’s current chief
technology officer, Mark Saab, co-founded the company Advanced Polymers in
1989. KRG Capital Management (KRG), a majority shareholder of Vention,
acquired Advanced Polymers in 2010 for a substantial purchase price. A KRG
officer testified that, at that time, a core consideration of KRG’s decision to
purchase Advanced Polymers was its belief that the company’s “proprietary
[HST] capabilities offer high margin component business with significant trade
secret protection.” (Quotation omitted.) After the acquisition, Advanced
Polymers became part of Vention, which conducted a financial analysis and
attributed more than a third of the purchase price to the value of Advanced
Polymers’ unpatented technology.
Pappas began working at Vention after he graduated from the University
of Massachusetts Lowell with a bachelor of science degree in plastics
engineering and a master’s degree in innovative and technological
entrepreneurship. Prior to working at Vention, Pappas had neither specifically
studied HST nor had any experience working with HST. In December 2013,
after working for Vention for about ten years, Pappas resigned from the
company.
During his employment, Pappas signed an “Employee Invention
Assignment and Confidentiality Agreement” (confidentiality agreement). The
confidentiality agreement provides:
At all times, both during my employment and after its
termination, I will keep and hold all such Proprietary Information
in strict confidence and trust, and I will not use or disclose any of
such Proprietary Information without the prior written consent of
the Company, except as may be necessary to perform my duties as
an employee of the Company.
The confidentiality agreement defined proprietary information to mean
“information of a confidential or secret nature,” including but not limited to
“Inventions, Intellectual Property Rights, Moral Rights, marketing plans,
product plans, business strategies, financial information, forecasts, personnel
information and customer lists.”
During his employment, Pappas was exposed to Vention’s confidential
HST technology and information. He also had knowledge of Vention’s business
and marketing information and strategies, including the sales volumes for
Vention’s various products. At the time he resigned, he was serving as the
engineering manager of the HST department. At some point before Pappas
2
resigned, he consulted with an attorney about his obligations under the
confidentiality agreement.
Almost immediately after leaving Vention, Pappas established Ascend. In
late December 2013 and January 2014, the defendants began working with a
website developer, communicated with one equipment vendor, and provided an
initial machine design to a second equipment vendor. This design included
extensive detail and critical specifications of the equipment they wanted built.
By August 2014, the defendants began actively marketing HST. After the
defendants launched their HST line, Vention requested information about the
products. The defendants sent Vention samples of their HST in August and
September 2014.
Vention petitioned the trial court for injunctive and other relief under the
UTSA in October 2014. On November 4, 2014, counsel for the defendants filed
appearances, in which they requested a jury trial. On November 14, 2014, the
defendants filed an answer, but they did not request a jury trial in the answer.
See Super. Ct. Civ. R. 9(c) (requiring a defendant to request a jury trial in his or
her answer to preserve the right to a jury trial). The defendants included
several paragraphs in their answer under the heading “counterclaims.”
Subsequently, on January 7, 2015, the defendants filed a motion to
amend their answer. In the motion, the defendants asserted that the original
answer “contains a single counterclaim for unfair business practices, based on
the New Hampshire Consumer Protection Act, RSA [chapter] 358-A.” The
defendants further asserted that they “wish to amend the counterclaim by
adding allegations of additional conduct which they believe support the unfair
trade practices counterclaim” and that “because some of the conduct alleged, if
proven, would amount to defamation, they also wish to add a cause of action
for defamation.” The defendants also sought to “add a jury demand to the
pleading.”
After a four-day hearing conducted between November and December,
the trial court granted a preliminary injunction in January 2015 that, among
other relief, enjoined the defendants from “directly or indirectly designing,
manufacturing, producing and/or selling” certain HST products. In February
2016, the trial court issued another order, ruling that the defendants had
waived their right to a jury trial by failing to assert it in their answer and
ordered that the case proceed by bench trial.
During discovery, Vention filed a trade secret disclosure and an amended
“Trade Secret/Confidential Information Disclosure” with the trial court.
Sometime thereafter, Vention moved to compel responses to certain
interrogatories and production requests from the defendants. The defendants
objected, arguing that they should not be required to provide discovery until
Vention produced an adequate description of its trade secrets, and they moved
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to compel an adequate trade secret designation and responses to
interrogatories that would require Vention to specify its trade secrets. The trial
court denied the defendants’ motion to compel and granted Vention’s motion to
compel, ruling that Vention had adequately disclosed its trade secrets.
The trial court held an eight-day bench trial in June 2016. During the
trial, Vention presented expert testimony from Dr. Chris Rauwendaal, who had
worked for 43 years in plastics extrusion. Rauwendaal testified that the
technology Vention used to create HST was proprietary, as were a number of
features in Vention’s process for making HST. Rauwendaal testified that these
features were all trade secrets, and that the defendants’ process for making
HST utilized all of these features. Rauwendaal further testified that Vention’s
process for making HST was distinguishable from several other industry and
competitor processes. Additionally, Rauwendaal reviewed the defendants’
design and experimentation records and concluded that they could not have
duplicated Vention’s technology without copying it, based upon the timeframe
in question and the lack of documentation of experimentation.
Vention also presented expert testimony from Dr. Amad Tayebi, a retired
professor in mechanical and plastics engineering. Tayebi testified regarding a
certain part of Vention’s equipment, which he concluded was a trade secret.
He testified that he had never seen a design like that used by Vention, and he
identified four specific component features of the part. He testified that
Vention designed and fabricated each of these components and that the
components were not available on the open market. Tayebi compared
Vention’s part to a part that the defendant used, and he opined that the two
parts were “substantially identical.” Tayebi distinguished Vention’s part from
those used by three other companies. Additionally, Tayebi reviewed the
defendants’ design and experimentation records and concluded that the
defendants could not have duplicated Vention’s part without copying it, based
upon the timeframe in question and the lack of documentation of
experimentation.
In September 2016, the trial court issued an order ruling that the
defendants had misappropriated Vention’s trade secret technology for
producing certain HST. The trial court further ruled that Vention was entitled
to equitable relief on its breach of contract claim, but it denied Vention’s
request for attorney’s fees. The trial court ruled that the defendants were not
entitled to judgment on their counterclaims for violation of RSA chapter 358-A
and business disparagement.
The trial court issued five injunctions against the defendants:
1. The Defendants are hereby permanently enjoined and
restrained from directly or indirectly disclosing or utilizing in any
way any confidential or proprietary information, trade secrets,
4
designs, inventions, intellectual property, and moral rights or
processes of the Plaintiff.
2. The Defendants are hereby permanently enjoined and
restrained from directly or indirectly designing, manufacturing,
producing, selling, or consulting on polyester heat shrink tubing
with a [specified] wall thickness . . . ;
3. The Defendants are hereby enjoined and restrained for ten
years from directly or indirectly designing, manufacturing,
producing, selling, or consulting on heat shrink tubing made with
materials other than polyester with a [specified] wall thickness
...;
4. The Defendants are hereby permanently enjoined from
directly or indirectly designing, manufacturing, producing, selling,
or consulting on [the part that Tayebi testified was trade secret] or
. . . [a] substantially similar [part] . . . ;
5. The Defendants are ordered to destroy all their equipment,
designs, and testing within 30 days of this Court’s order and
provide certification of such destruction . . . .
(Footnote omitted.)
Vention filed a motion for reconsideration of the trial court’s denial of its
request for attorney’s fees, which the trial court denied. The defendants did
not file a motion for reconsideration. This appeal followed.
On appeal, the defendants argue that: (1) the trial court erred in denying
the defendants’ request for a jury trial; (2) the trial court erred as a matter of
law in failing to require Vention to specify its trade secrets prior to discovery;
(3) the trial court erroneously shifted Vention’s burden of proof at trial to the
defendants; (4) the trial court’s finding that the defendants did not
misappropriate certain specified Vention technology was fatal to Vention’s case;
(5) certain admissions of Vention’s trial witnesses were fatal to Vention’s case;
and (6) the trial court’s injunctions were not supported by specific findings,
were overbroad, and were not tailored to remedy the alleged harm. We will
address each argument in turn.
II
The defendants argue that the trial court erred in denying their request
for a jury trial. The right to a jury trial is guaranteed by the New Hampshire
Constitution. See N.H. CONST. pt. I, art. 20. “To preserve the right to a jury
trial, a defendant entitled to a trial by jury must indicate his or her request for
5
a jury trial upon the first page of the Answer at the time of filing.” Super. Ct.
Civ. R. 9(c). “Failure to request a jury trial in accordance with this rule shall
constitute a waiver by the defendant thereof.” Id. “The trial court has broad
discretion in determining whether to waive its rules, and we will not reverse its
decision absent an unsustainable exercise of discretion.” Anna H. Cardone
Revocable Trust v. Cardone, 160 N.H. 521, 525 (2010).
The defendants acknowledge that they did not comply with Rule 9(c) by
asserting their right to a jury trial in the answer that they filed in November
2014. However, they argue that the trial court had the discretion to waive the
application of Rule 9(c). See Super. Ct. Civ. R. 1(d) (“As good cause appears
and as justice may require, the court may waive the application of any rule.”).
The defendants argue that the trial court unsustainably exercised its discretion
by denying their request because they indicated at the beginning of the case,
albeit in improper form, that they wanted a jury trial, and the case was still at
a very early stage when they recognized the error and requested to cure it.
They further argue that “Vention did not demonstrate that any prejudice or
harm would result from granting the request [for] a jury trial.” According to the
defendants, “these facts simply cannot be construed as an intentional waiver of
the right to a jury.”
The defendants failed to demand a jury trial in their answer. Rule 9(c) is
clear that such a failure constitutes a waiver of the right to a jury trial. The
trial court considered and ultimately denied the defendants’ request that it
allow for a late assertion of a jury trial. In making its ruling, the trial court
reasoned that the trial would involve “many confidential documents” and that
“the difficulties in ensuring that the jury be given access to relevant documents
but that those documents do not fall into the public domain will undoubtedly
lengthen the trial.” See Super. Ct. Civ. R. 1(b) (“The rules shall be . . .
administered to secure the just, speedy, and cost-effective determination of
every action.”).
Considering all the circumstances, as well as the defendants’ request to
deviate from the clear terms of Rule 9(c), we cannot say that the trial court
committed an unsustainable exercise of discretion when it decided not to grant
relief from the rule under these circumstances.
The defendants alternatively argue that, even if they did waive their right
to a jury in their original answer, they did not waive their right to a jury for the
“entirely new claim for defamation” that they included in their amended
answer. The defendants contend that, because they were entitled to a jury on
this counterclaim, it was an unsustainable exercise of discretion for the trial
court not to allow a jury trial on all counts.
We have previously stated that waiver of the right to a jury trial “extends
only to the issues then formed at the time of waiver and does not apply to new
6
and different issues that may thereafter be raised under amended pleadings.”
Lucas v. Cate, 99 N.H. 134, 135 (1954). The defendants’ motion to amend their
answer did purport to add a new cause of action and demanded a jury trial. In
the motion, the defendants stated: “In addition, because some of the conduct
alleged [in the motion], if proven, would amount to defamation, they also wish
to add a cause of action for defamation. Finally, they seek to add a jury
demand to the pleading.” The trial court, however, rejected the defendants’
argument that the defamation counterclaim was new because “the
[c]ounterclaim for defamation was contained in the original answer.”
We agree with the trial court that this was not a new claim for
defamation. In the defendants’ original answer, they described
communications from Vention’s agents to the defendants’ landlord and sales
representatives in Europe, and then they alleged as follows:
187. As described above, Vention, through its agents, Mr. Saab
and/or Ms. Albert, has intentionally and without reasonable care,
communicated false and misleading statements to third parties
about the scope and enforceability of Mr. Pappas’ covenants, and
has also intentionally made false and misleading statements to third
parties to impugn Mr. Pappas’ character and to irreparably harm his
professional reputation. The third parties understood the
defamatory meaning [of] Vention’s statements, and Vention had no
valid privilege for making such false and defamatory statements
about Mr. Pappas. Vention’s conduct in this regard constitutes
defamation, for which Mr. Pappas has and continues to suffer
damages, including consequential damages, harm to his reputation
and loss of business, all within the jurisdictional limits of this Court.
This is a claim for defamation. See Pierson v. Hubbard, 147 N.H. 760,
763 (2002) (“A plaintiff proves defamation by showing that the defendant failed
to exercise reasonable care in publishing a false and defamatory statement of
fact about the plaintiff to a third party, assuming no valid privilege applies to
the communication.”). Nor are we persuaded by the defendants’ reliance on the
fact that, in their amended answer, they described additional communications
from Vention to “other business associates of Mr. Pappas and Ascend.” The
defendants cannot withdraw their waiver simply by alleging additional facts to
support an existing claim for defamation. This is not a “new and different
issue[].” Lucas, 99 N.H. at 135. Accordingly, we reject the defendants’
argument that the trial court erred by denying their request for a jury trial on
this issue.
III
The defendants next argue that the “trial court erred as a matter of law
in failing to require Vention to specify its trade secrets prior to discovery.”
7
Vention counters that the trial court correctly ruled that Vention had disclosed
its trade secrets with “reasonable particularity.”
Before turning to the merits of the defendants’ argument, we must
determine the appropriate standard of review. The defendants argue that we
should review de novo the trial court’s determination that Vention carried its
burden of disclosing its claimed trade secrets with reasonable particularity
before discovery. According to the defendants, this issue is a question of law.
Vention disagrees, arguing that because the defendants are appealing the trial
court’s rulings on motions to compel, we should apply our unsustainable
exercise of discretion standard. According to Vention, this is a discovery issue,
which is a matter within the sound discretion of the trial court.
We agree with Vention that the trial court’s determination that Vention
had adequately specified its trade secrets such that the parties could move to
discovery was ultimately a determination regarding discovery. See Vesta Corp.
v. Amdocs Management Ltd., 147 F. Supp. 3d 1147, 1155 (D. Or. 2015)
(stating that “whether a plaintiff has sufficiently disclosed its trade secrets is a
fact-specific question to be decided on a case-by-case basis” (quotation
omitted)); State v. Brown, 154 N.H. 345, 349 (2006) (noting that we “review the
trial court’s fact-specific determinations for an unsustainable exercise of
discretion”). Such a determination is appropriately left to the trial court. See
Miller v. Basbas, 131 N.H. 332, 338 (1988) (observing that “control over the
breadth and scope of pre-trial discovery is left to the sound discretion of the
trial judge”). “We review a trial court’s rulings on the management of discovery
under an unsustainable exercise of discretion standard.” N.H. Ball Bearings v.
Jackson, 158 N.H. 421, 429 (2009).
Nevertheless, the defendants maintain that this issue is a substantive
issue, rather than a discovery issue. The defendants cite numerous cases in
which courts dismissed trade secret claims for failure to adequately identify the
alleged secrets. See, e.g., Beane v. Beane, 856 F. Supp. 2d 280, 285, 305
(D.N.H. 2012). However, the cases that the defendants rely upon involved
rulings on the merits. See, e.g., id. at 314. Accordingly, they provide no
support for the defendants’ argument, and we will review the trial court’s ruling
on the adequacy of Vention’s pre-discovery trade secret disclosure using our
unsustainable exercise of discretion standard.
The trial court, relying on several federal cases, ruled that parties
claiming misappropriation of trade secrets are required to disclose their trade
secrets at the outset of discovery. The trial court identified several policy
considerations that support requiring such a disclosure: (1) it promotes
investigating trade secret claims prior to suit and discourages filing meritless
claims; (2) it prevents plaintiffs from using the discovery process to obtain the
defendant’s trade secrets; (3) it frames the appropriate scope of discovery; and
(4) it enables the defendant to form complete and well-reasoned defenses. See
8
DelPhon Indus., LLC v. Int’l Test Solutions, Inc., No. C 11-01338 PSG, 2012
U.S. Dist. LEXIS 659, at *8-9 (N.D. Cal. Jan. 4, 2012); see also DeRubeis v.
Witten Technologies, Inc., 244 F.R.D. 676, 681 (N.D. Ga. 2007) (reasoning that
“requiring the plaintiff to state its claimed trade secrets prior to engaging in
discovery ensures that it will not mold its cause of action around the discovery
it receives”). The trial court also identified competing considerations: (1)
plaintiffs have a broad right to discovery; and (2) a trade secret plaintiff may
have no way of knowing what trade secrets have been misappropriated until it
receives discovery on how the defendant is operating. See DeRubeis, 244
F.R.D. at 680.
The trial court acknowledged that these competing policies can make
resolving this type of dispute difficult, and it concluded that the proper
approach is fact dependent. See id. at 681. The trial court then ruled that a
plaintiff must disclose its trade secrets with “reasonable particularity,” which it
defined as “a description of trade secrets that is sufficient to put the defendant
on notice of the claims against him, and that allows a defendant to discern the
relevancy of any requested discovery.” (Quotation omitted.)1
After determining which standard it would apply, the trial court ruled
that Vention’s trade secret disclosure sufficiently described Vention’s claimed
secrets with reasonable particularity. Vention identified its claimed trade
secrets as the process and equipment that it uses to make HST. In making
this ruling, the trial court noted the detailed specifications that Vention
provided for the individual steps of its process and cited specific examples.
The defendants argue that Vention’s disclosure was insufficient because
it: (1) impermissibly shifted the burden to the defendants to ascertain Vention’s
trade secrets from the 55-page disclosure and over 100,000 pages of
incorporated documents; (2) impermissibly hedged by stating only ranges of
processing parameters; and (3) did not distinguish between confidential
information and trade secret information.
Vention counters that its trade secret disclosure described its trade
secret technology in “step-by-step detail,” including component process
parameters, and “reference[d] specific documents further describing these
processes.” Vention further identified the critical equipment that it designed
and used in this process. Vention argues that it gave ranges of parameters and
specifications because its claimed trade secrets are the processes and
technology it uses to make HST, not a single product, material, or tube size.
1Although no part of the UTSA explicitly requires a trade secret plaintiff to describe its trade
secret in a trade secret disclosure prior to discovery, the parties do not challenge the trial court’s
ruling that Vention was required to disclose its trade secrets with reasonable particularity prior to
discovery. Accordingly, we assume for the purposes of this appeal that such a requirement exists
under New Hampshire law.
9
Based upon our review of the trade secret disclosure, we find that the
trial court sustainably exercised its discretion in ruling that Vention had
adequately specified its alleged trade secrets prior to discovery. Vention’s
disclosure described each step of Vention’s alleged trade secret process and
referenced documents that contained more specific information. In particular,
the disclosures described in detail the discrete steps in the manufacturing
process, equipment and technology used, raw materials used, and design
parameters of end products.
To the extent that the disclosures contained ranges of processing
parameters or qualifying language, we also find no error. As discussed above,
Vention only needed to identify its trade secrets with “reasonable particularity,”
sufficient to put the defendants on notice of the claims against them and allow
them to discern the relevancy of any requested discovery. The disclosures were
sufficiently specific that the defendants could discern what information Vention
claimed was trade secret and the relevancy of requested discovery, particularly
considering that Pappas, as the former engineering manager at Vention, was
familiar with Vention’s technology for making HST. Moreover, we note that
these disclosures did not need to prove the existence of trade secrets. That was
Vention’s ultimate burden at trial, not its burden for proceeding with discovery.
Finally, the defendants argue that Vention’s disclosures were insufficient
as a matter of law because they did not distinguish between confidential
information and trade secret information. In support of their argument, the
defendants rely upon Big Vision Private v. E.I. DuPont De Nemours & Co., 1 F.
Supp. 3d 224 (S.D.N.Y. 2014). See Big Vision Private, 1 F. Supp. 3d at 262
(noting that the plaintiff erroneously used the terms “trade secret” and
“confidential” as if they were interchangeable (quotations omitted)). However,
the court in that case ruled on summary judgment that the plaintiff’s trade
secret was too vague and indefinite to deserve protection. See id. at 257-66.
Accordingly, it provides no support for the defendants’ argument that a pre-
discovery trade secret disclosure that does not specifically distinguish between
confidential information and trade secret information is insufficient as a matter
of law.
IV
The defendants next argue that the trial court “failed to require Vention
to specify at trial exactly what it claimed as a secret and accepted conclusory
and superficial testimony as to essentially every element of Vention’s claim.”
The defendants argue that this failure “improperly allocated the burden of
proof,” constituting reversible error. In particular, the defendants challenge the
sufficiency of Vention’s evidence, arguing that Vention failed to: (1) specifically
identify its trade secrets and show that they were unique; (2) show that the
identified information was neither general knowledge in the trade nor special
10
knowledge of those skilled in the trade; and (3) show an absence of publicly
available information.
Vention first contends that the defendants did not preserve these
arguments because they did not move for a directed verdict challenging the
sufficiency of Vention’s evidence and did not move for reconsideration on these
grounds or on the grounds of the alleged burden shifting.
“This court has consistently held that we will not consider issues raised
on appeal that were not presented in the lower court.” LaMontagne Builders v.
Bowman Brook Purchase Group, 150 N.H. 270, 274 (2003) (quotation omitted).
“This principle applies to legal issues that arise after trial as a result of the
court’s order.” Id. “This requirement is designed to discourage parties
unhappy with the trial result to comb the record, endeavoring to find some
alleged error never addressed by the trial judge that could be used to set aside
the verdict.” Id. (quotation omitted). To satisfy this preservation requirement,
any issues which could not have been presented to the trial court prior to its
decision must be presented to it in a motion for reconsideration. See id.; N.H.
Dep’t of Corrections v. Butland, 147 N.H. 676, 679 (2002).
The defendants argue that they satisfied the preservation requirement
with respect to their argument that the trial court improperly shifted some of
Vention’s trial burden to the defendants by stating in their opening memo and
their post-trial brief that Vention carried the burden of proof on these issues.
We disagree. The trial court stated in its order that the “claimant must
establish” the elements of trade secret misappropriation and found that
Vention satisfied these elements. Thus, the trial court agreed with the
defendants that it was Vention’s burden to prove trade secret misappropriation.
If, in making its ruling, the trial court improperly shifted some of Vention’s
burden to the defendants, this was a new error. Because the defendants did
not bring this issue to the attention of the trial court in a motion to reconsider,
the trial court had no opportunity to address it, and it is not preserved for our
review.
The defendants argue that they satisfied the preservation requirement of
their sufficiency of the evidence challenges by filing a post-trial brief arguing
that Vention had failed to meet its burden of proof on its causes of action. We
agree. The defendants presented their arguments to the trial court that
Vention failed to carry its burden to prove that its trade secrets were unique
and that the defendants’ process for making HST was not based upon publicly
available information or Pappas’s industry knowledge and experience. By
ruling that Vention had carried its burden of proof to show misappropriation,
the trial court implicitly rejected each of the defendants’ arguments regarding
insufficient evidence. Because the trial court addressed these arguments, the
defendants were not required to raise them in a motion for reconsideration,
and the arguments are preserved for our review.
11
We now turn to the merits of the defendants’ argument that the evidence
was insufficient to support the trial court’s ruling that Vention proved it held
trade secret information. When a trial court renders a decision after a trial on
the merits, we uphold its factual findings and rulings unless they lack
evidentiary support or are legally erroneous. See Jesurum v. WBTSCC Ltd.
P’ship, 169 N.H. 469, 476 (2016). “Thus, we defer to the trial court’s judgment
on such issues as resolving conflicts in the testimony, measuring the credibility
of witnesses, and determining the weight to be given evidence.” Id. (quotation
omitted); see also Appeal of Pennichuck Water Works, 160 N.H. 18, 41 (2010)
(stating that trier of fact was free to “accept or reject such portions of the
evidence as it found proper, including that of expert witnesses”). We review the
trial court’s application of the law to the facts de novo. Jesurum, 169 N.H. at
476; see also United States v. 15 Bosworth Street, 236 F.3d 50, 53 (1st Cir.
2001) (stating that determinations about the sufficiency of evidence is a legal
determination that engenders de novo review).
The UTSA defines “[t]rade secret” to mean: “information, including a
formula, pattern, compilation, program, device, method, technique, or process”
that “(a) [d]erives independent economic value, actual or potential, from not
being generally known to, and not being readily ascertainable by proper means
by, other persons who can obtain economic value from its disclosure or use”
and “(b) [i]s the subject of efforts that are reasonable under the circumstances
to maintain its secrecy.” RSA 350-B:1, IV.
The defendants first argue that Vention failed to carry its burden of
specifically identifying a trade secret and proving that it was unique. They
argue that Saab testified broadly about Vention’s trade secrets, but failed to
identify any specific process, which is insufficient as a matter of law. They
argue that Rauwendaal’s testimony “was far short of the proof required in a
trade secret case” because he “had no basis to opine as to whether there was
anything unique about Vention’s . . . technology.” According to the defendants,
neither Rauwendaal nor any other Vention witness ever offered evidence
establishing how Vention’s technology was unique as compared to the
technology used by similar companies. The defendants further argue that
Tayebi “lacked any basis to opine that Vention’s [part] was unique” because he
“only briefly examined [certain equipment used by other companies] . . . [that]
Vention asked him to examine and did not evaluate other available [equipment]
in the market.”
The trial court determined that Vention identified trade secrets: the
process and equipment that it uses to manufacture its medical HST. In
making that determination, the trial court relied upon the testimony of
Rauwendaal, which the court found to be credible. Rauwendaal testified that
he had never encountered any other company using Vention’s technology to
manufacture medical HST with the same characteristics. Rauwendaal testified
that several specific processes that Vention uses to make HST were trade
12
secrets. He further testified that the processes that Vention uses were not the
same as other industry HST processes. The trial court also relied upon the
testimony of Tayebi. Tayebi testified that a specific part that Vention uses to
make its HST is a trade secret. He also testified that he had never seen
another design with the features of Vention’s part, and explained why the
equipment of three other companies was different and not functional
equivalents of the Vention part.
The trial court found that Vention derives an “economic, competitive
advantage” because its HST process and equipment allow it to “serve a niche
market in which it is the only company capable of manufacturing such
products with the degree of enhanced characteristics.” The trial court credited
evidence that KRG purchased Advanced Polymers for a substantial purchase
price because the company was the “market leader in heat shrink tubing and
complex medical balloons that had incredibly high profit margins that KRG
believed were sustainable for many, many years” and because KRG believed the
purchase price reflected trade secret protection for Vention’s medical balloons
and HST. (Quotation and brackets omitted.)
In sum, there was evidence before the trial court that Vention held a
niche market position with a competitive advantage due to its use of certain
technology to make medical HST. Vention’s experts identified specific aspects
of the company’s technology, testified that the technology was trade secret and
was unique to Vention, and distinguished the technology of a number of other
companies and industries. Based upon our review of the record, we cannot say
that these findings of fact were legally erroneous. The trial court, as the trier of
fact, could properly credit this evidence, see Pennichuck Water Works, 160
N.H. at 41, which supports the trial court’s ultimate ruling that Vention carried
its burden of proving that it possessed unique trade secret information.
The defendants next argue that Vention “never even attempted to meet
[its] burden” of distinguishing its alleged secrets from the “enhanced skill,
scientific knowledge and inventive faculties” that Pappas acquired while
working for Vention. (Quotation and ellipsis omitted.) They further argue that
“[t]he trial court even accepted Vention’s argument that [the defendants were]
obligated to show that [they] had independently developed [their] product.”
Vention counters that the “evidence at trial conclusively demonstrated that
Vention’s trade secrets were neither generally known nor readily ascertainable.”
The trial court found that Rauwendaal “credibly testified” that the
processes that Vention and the defendants used to make HST were “virtually
identical.” The trial court also relied on Rauwendaal’s testimony that “no
company had been able to develop technology similar to Vention’s over the past
26 to 27 years” and that, to duplicate Vention’s technology, “it would take a
team of people” a “period of four to five years.” Rauwendaal concluded that the
defendants could not have duplicated Vention’s technology without copying it
13
because of the defendants’ lack of documented experimentation, lack of
prototypes, and the timeframe in which the defendants were able to produce
HST. Tayebi drew a similar conclusion regarding the defendants’ design of a
part that they used in their HST machine.
From this evidence, the trial court could properly conclude that the
defendants did not develop their HST using enhanced skill, scientific
knowledge, and inventive faculties regarding HST; rather, they developed their
HST by misappropriating Vention’s trade secret HST technology. Moreover, the
record does not support the defendants’ argument that the trial court
“obligated” the defendants to show that they independently developed their
product. The trial court relied upon Rauwendaal’s and Tayebi’s testimony,
which supported Vention’s burden of proving that the defendants
misappropriated, rather than independently developed, Vention’s trade secret
HST technology. Although the defendants argue that this evidence was
contradicted by Pappas’s “uncontroverted” testimony that he “conducted many
experiments which he did not record” and had “independently developed his
machine and process parameters,” the trial court did not need to accept this
testimony. See In the Matter of Geraghty & Geraghty, 169 N.H. 404, 416
(2016) (noting that the trial court may reject the testimony of any witness and
is “not required to believe even uncontroverted evidence” (quotation omitted)).
Finally, the defendants argue that Vention “failed to demonstrate that its
allegedly secret information was different from information in the public
domain.” According to the defendants, “[t]here was substantial and essentially
undisputed evidence regarding the widespread availability of information about
similar technologies.”
The defendants’ argument that Vention could have done more to prove
that its technology is not publicly available is unavailing. Vention produced
expert testimony that its HST technology is not information that is in the
public domain. Rauwendaal, in particular, opined that information from the
companies identified by the defendants explained none of the choices that the
defendants made when designing their machine. The defendants cross-
examined Vention’s experts regarding these conclusions. The trial court
weighed this evidence and determined that Vention had met its burden.
Because there was expert testimony, which the trial court could properly
credit, that supported the trial court’s conclusion that Vention proved its
information was different from information in the public domain, we uphold the
trial court’s determination.
V
The defendants next argue that the trial court’s “finding that [other
specified Vention technology] was not misappropriated was fatal to Vention’s
case.” According to the defendants, this other technology “was the foundation
14
for Vention’s entire case.” (Quotation omitted.) Vention argues that this
argument is not preserved because the defendants did not raise it in a motion
for reconsideration. We agree with Vention that this argument is not
preserved.
The defendants’ argument is essentially that this other finding
contradicted the rest of the trial court’s order, which found that the defendants
misappropriated Vention’s trade secret HST technology. Even assuming that a
contradiction exists, the defendants never argued in a motion to reconsider
that this contradiction in the trial court’s order should preclude relief on
Vention’s entire misappropriation claim. The purported error did not exist
until the trial court issued its order, and “any issues that could not have been
presented to the trial court before its decision must be presented to it in a
motion for reconsideration.” State v. Mouser, 168 N.H. 19, 27 (2015).
Accordingly, because this issue was not raised before the trial court in a
motion for reconsideration, it is not preserved for our review. See Butland, 147
N.H. at 679.
VI
The defendants next argue that certain admissions of Vention’s trial
witnesses were fatal to Vention’s case. We decline to address this issue,
however, because the defendants raised it for the first time on appeal in their
reply brief. See Panas v. Harakis & K-Mart Corp., 129 N.H. 591, 617 (1987)
(stating that “a reply brief may only be employed to reply to the opposing
party’s brief, and not to raise entirely new issues”). The defendants do indicate
in their reply brief that they are responding to inaccurate statements that
Vention made in its brief. However, the statements that the defendants point
to come from Vention’s recitation of the underlying facts and procedural history
and not from any particular argument. Thus, while it is appropriate for the
defendants to attempt to correct these inaccuracies, it is not appropriate for the
defendants to raise the entirely new issue of whether certain admissions of trial
witnesses were fatal to Vention’s case.
VII
The defendants raise several challenges to the injunctions that the trial
court issued. “It is within the trial court’s sound discretion to grant an
injunction after consideration of the facts and established principles of equity.”
Town of Atkinson v. Malborn Realty Trust, 164 N.H. 62, 66 (2012). “We will
uphold the trial court’s factual findings unless the evidence does not support
them or they are erroneous as a matter of law.” Id. “We will uphold the
issuance of an injunction absent an error of law, an unsustainable exercise of
discretion, or clearly erroneous findings of fact.” Id. (quotation omitted).2
2 The defendants argue that we should review the trial court’s injunctions de novo. They provide
15
The UTSA provides that courts may enjoin “[a]ctual or threatened
misappropriation” of trade secrets. RSA 350-B:2, I. Furthermore, a party
enjoined from misappropriating a trade secret may petition the court to
terminate the injunction if the trade secret has ceased to exist. Id. “Usually
the duration of an injunction is designed to preclude defendant’s wrongful
activities for a period of time reasonably necessary to protect plaintiff’s
interests; the period of time that would be required for independent
development is the most commonly employed standard.” 4 Roger M. Milgrim &
Eric E. Bensen, Milgrim on Trade Secrets § 15.02[1][d], at 15-248 to 15-248.1
(2017).
The defendants argue that the trial court erred in its grant of injunctive
relief because the injunctions: (1) are not supported by specific factual findings;
(2) improperly expand upon Pappas’s employment covenants; and (3) are
overbroad because they are not tailored to remedy the alleged harm.
Before we address the merits of the defendants’ arguments, we turn to
Vention’s argument that the defendants did not preserve their challenges to the
trial court’s injunctions. Vention argues that the defendants “failed to file a
motion to reconsider or otherwise bring these specific issues to the trial court’s
attention.” The defendants argue that they preserved their challenges by
objecting to the injunctions that Vention proposed in its post-trial brief.
According to the defendants, the trial court adjudicated their objections when it
“incorporated verbatim” five of Vention’s proposed injunctions. (Italics
omitted.)
Based upon our review of the record, we agree with the defendants that
they preserved their arguments that the injunctions improperly expand upon
Pappas’s employment covenants and are overbroad because they are not
tailored to remedy the alleged harm. The defendants, in their post-trial brief,
argued that “Vention . . . is not entitled to any relief, let alone to the outrageous
demands in its Post-Trial Memorandum and Proposed Order, by which it seeks
to expand greatly the unreasonable and unenforceable restrictions in the
Agreement Mr. Pappas was forced to sign in 2004.” The defendants also
argued that “the relief requested by Vention is oppressive and punitive; the
broadly worded language proposed by Vention would place [Pappas] at risk for
the rest of his life without prior notice of what, exactly, is prohibited.”
only one supporting cite, with no explanation: MAI Systems Corp. v. Peak Computer, Inc., 991
F.2d 511, 516 (9th Cir. 1993). Although the Ninth Circuit in that case noted that it reviewed
“questions of law underlying the issuance of a preliminary injunction” de novo, it nevertheless
reviewed the grant of a preliminary injunction for an abuse of discretion. See MAI Systems Corp.,
991 F.2d at 516. Accordingly, we are not persuaded that we should diverge from New Hampshire
precedent, and we will uphold the trial court’s injunctions “absent an error of law, an
unsustainable exercise of discretion, or clearly erroneous findings of fact.” Town of Atkinson, 164
N.H. at 66.
16
However, these arguments from the defendants’ post-trial brief are not
sufficient to preserve their argument that the trial court erred by granting
injunctions that were not supported by specific factual findings. At the time
that the defendants objected to Vention’s proposed injunctions, the trial court
had neither made any factual findings nor granted any permanent injunctive
relief. The alleged error — a lack of specific factual findings supporting the
injunctions — could not have occurred until after the trial court issued its
order. Consequently, the trial court never had an opportunity to address this
alleged error in the first instance. If the defendants had brought this alleged
error to the trial court’s attention through a motion to reconsider, the trial
court could have stated why its factual findings were sufficient or, if it believed
that its findings were insufficient, corrected its error by modifying the
injunctions or issuing additional findings of fact. Accordingly, this argument is
not preserved for our review. See Butland, 147 N.H. at 679.
The first injunction that the defendants challenge provides: “1. The
Defendants are hereby permanently enjoined and restrained from directly or
indirectly disclosing or utilizing in any way any confidential or proprietary
information, trade secrets, designs, inventions, intellectual property, and moral
rights or processes of [Vention].” The defendants argue that this injunction is
“unnecessary and unfair” because it turns a contractual clause into a
permanent injunction. According to the defendants, “[i]f Vention believes in the
future that [the defendants are] violating a confidentiality obligation, it no
doubt will find [them] and sue [them].”
One of Vention’s claims was for breach of contract. The trial court found
that the confidentiality agreement was enforceable to the extent that it barred
Pappas from disclosing or using Vention’s proprietary information. The trial
court ruled that the defendants misappropriated Vention’s trade secret
information. Based on this record, the trial court sustainably exercised its
discretion in deciding to enjoin the defendants from further violating the
confidentiality agreement.
The defendants raise the same challenges to the second and third
injunctions, which prohibit the defendants from “directly or indirectly
designing, manufacturing, producing, selling, or consulting” on HST with
specified characteristics, perpetually for HST made of polyester, and for ten
years for HST made from other materials. The defendants argue that it was
reversible error for the trial court to issue these injunctions because the
injunctions are not limited to the specific process or products at issue in the
case. We disagree.
The trial court stated in its order that it wanted to delineate prohibited
conduct by providing a bright line. It then explained that the defendants were
“enjoined from utilizing Vention’s trade secrets to manufacture the specified
products at issue in this case.” Thus, looking at the trial court’s order as a
17
whole, it is apparent that the primary purpose of the injunctions is to enjoin
the defendants from using the specific information at issue in the case —
Vention’s trade secret technology for making HST. To the extent that the
injunctions prohibit the defendants from working with HST using a different
process, the trial court noted that “if [the defendants] are able to produce such
products without the use of Vention’s trade secrets, then they may petition to
modify this injunction.” In other words, the injunctions place the burden on
the defendants to prove that they are using a process other than Vention’s
trade secret technology before they can work with HST. Without such a
burden, if the defendants began to work with HST, Vention would have no way
of knowing whether they were doing so with the use of Vention’s trade secret
technology. Vention would then be in a position where it would need to sue the
defendants to determine whether they were violating the court’s injunctions.
Therefore, although the injunctions prohibit conduct that falls outside
the scope of Vention’s trade secrets, they do so only for the limited purpose of
placing the burden on the defendants to prove that they are not using
Vention’s trade secret technology for making HST. Considering that the trial
court found that the defendants misappropriated Vention’s trade secret
technology for making HST, we cannot say the trial court committed an
unsustainable exercise of discretion by placing this additional burden on the
defendants, should they seek to work with HST by using another process. See
RSA 350-B:2, III (“In appropriate circumstances, affirmative acts to protect a
trade secret may be compelled by court order.”).
The defendants next argue that the injunctions do not define Vention’s
trade secrets. We disagree. In prior sections of the trial court’s order, the
court describes Vention’s technology and determines that this technology is
trade secret. Thus, considering the trial court’s order as a whole, it is clear
that the trial court’s subsequent references to “Vention’s trade secrets” refer to
its earlier determinations regarding what information constituted Vention’s
trade secrets.3
The defendants next argue that “there was no basis” for the durations of
these injunctions. We disagree.
The trial court granted a perpetual injunction for HST made from
polyester and a ten-year injunction for HST made from other materials. The
trial court reasoned that the durations were appropriate because “Vention has
3With regard to the second injunction, the defendants additionally argue that there “is no rhyme
or reason for this injunction” because “[i]t was undisputed that Pappas had not attempted to
make [polyester HST].” For the reasons described above, we interpret the trial court’s order as
prohibiting the defendants from working with polyester HST using the trade secrets that they
misappropriated. The injunction’s broader prohibition on the use of other technology can be
modified should the defendants choose to petition the court and demonstrate that they are using
a process other than the process that the trial court found them to have misappropriated.
18
proved that its product cannot be reverse engineered”; “Vention has proved
that its process has not been duplicated by any competitor”; and Vention’s
expert Rauwendaal “expressed doubt that a company undertaking to develop
this technology would be successful, but opined that if successful, the project
would take at least four to five years and involve many people and many
resources.” Based upon these findings, we cannot say that the trial court erred
in determining the duration of the injunctions. See Curtiss-Wright Corp. v.
Edel-Brown Tool & Die, 407 N.E.2d 319, 326 (Mass. 1980) (ruling that trial
judge did not abuse his discretion in issuing a permanent injunction where he
determined that neither the defendant nor “others in the trade” were “likely
through legitimate procedures to learn the [trade secret]”). Furthermore, we
note that if Vention’s trade secrets cease to exist, the defendants can petition
the court to terminate the injunction. See RSA 350-B:2, I.
The fourth injunction that the defendants challenge provides, in relevant
part: “4. The Defendants are hereby permanently enjoined from directly or
indirectly designing, manufacturing, producing, selling, or consulting on [the
part that Tayebi testified was trade secret] or . . . [a] substantially similar
[part].” The defendants argue that this injunction is improper because “by
referring to ‘substantially similar’ [parts] it seems to prevent [the defendants]
even from using [parts] which can be purchased on the open market.” We
disagree. By its plain terms, the injunction prohibits “designing,
manufacturing, producing, selling, or consulting” on a substantially similar
part, but does not prohibit purchasing or using a substantially similar part.
Thus, the injunction would not prohibit the defendants from purchasing or
using commercially available equipment.
The fifth injunction that the defendants challenge provides, in relevant
part: “5. The Defendants are ordered to destroy all their equipment, designs,
and testing within 30 days of this Court’s order and provide certification of
such destruction.” The defendants argue that the injunction orders them to
destroy “all [their] equipment” “without explaining what equipment was
included and without delineating between the only component that had been
found to have been misappropriated . . . and any other components.”
(Quotations omitted.) The defendants further request that the destruction be
“limited solely to the specific item found to have been misappropriated, and not
to the rest of the [defendants’] [m]achine or to any other equipment.”
We find no ambiguity in the trial court’s injunction. The trial court
ordered the defendants to destroy “all” of their equipment. There was no need
for the trial court to delineate between the part that Tayebi testified was trade
secret and the other components because they were all encompassed by the
injunction.
Additionally, we decline the defendants’ invitation to limit the destruction
solely to the part that Tayebi testified was trade secret. The trial court made
19
several findings that support its injunction ordering the destruction of the
defendants’ entire machine. For example, the trial court stated that “[a]lthough
Pappas claims to have developed Ascend’s technology independently of
Vention, there is very little documentation of experimentation that would
explain how he came to design his machine[] and select the parameters on
which [it] ran and select the materials he used,” and credited the conclusions
of Rauwendaal and Tayebi that the defendants “copied Vention’s technology.”
Thus, even though the defendants’ machine was not identical to Vention’s
machine, by virtue of its design, it employed Vention’s trade secrets for
producing HST. Therefore, it was an appropriate exercise of discretion for the
trial court to order the destruction of the defendants’ machine. See Town of
Atkinson, 164 N.H. at 66 (“We will uphold the issuance of an injunction absent
an error of law, an unsustainable exercise of discretion, or clearly erroneous
findings of fact.” (quotation omitted)).
VIII
Vention cross-appeals the trial court’s ruling that it was not entitled to
attorney’s fees. Vention argues that it is entitled to attorney’s fees either
pursuant to RSA 350-B:4, III because the defendants willfully and maliciously
misappropriated Vention’s trade secrets; pursuant to RSA 350-B:4, I, because
they filed a counterclaim for trade secret misappropriation in bad faith; or
under the common law because they committed numerous bad faith litigation
actions.
“The general rule in New Hampshire is that parties pay their own
attorney’s fees.” Fat Bullies Farm, LLC v. Devenport, 170 N.H. 17, 29 (2017).
However, “[a] court may award attorney’s fees when specifically authorized by
statute.” Id. Here, RSA 350-B:4 provides such an exception. That statute
provides, in relevant part, that the trial court “may award reasonable attorneys’
fees to the prevailing party when: I. A claim of misappropriation is made in bad
faith . . . or III. Willful and malicious misappropriation exists.” RSA 350-B:4
(emphasis added). Another exception to the general rule is the bad faith
litigation theory. See Fat Bullies Farm, 170 N.H. at 30.
Under the bad faith litigation theory, an award of attorney’s fees is
appropriate when one party has acted in bad faith, vexatiously,
wantonly, or for oppressive reasons, when the litigant’s conduct
can be characterized as unreasonably obdurate or obstinate, and
when it should have been unnecessary for the successful party to
have brought the action.
Id. (quotation and brackets omitted).
“We will not overturn the trial court’s decision concerning attorney’s fees
absent an unsustainable exercise of discretion.” Id. (quotation omitted). “To
20
warrant reversal, the discretion must have been exercised for reasons clearly
untenable or to an extent clearly unreasonable to the prejudice of the objecting
party.” Id. (quotation omitted). “In evaluating the trial court’s ruling on this
issue, we acknowledge the tremendous deference given a trial court’s decision
regarding attorney’s fees.” Id. (quotation omitted). “If there is some support in
the record for the trial court’s determination, we will uphold it.” Id. (quotation
omitted).
Here, the trial court acknowledged that the defendants “engaged in
intentional misappropriation of Vention’s intellectual property.” The trial court
noted, however, that Pappas “acted reasonably in consulting with counsel
before proceeding” and that “she advised him that he was able to proceed [with]
producing [certain HST products].” The trial court further noted that “Vention
appear[ed] to have suffered no significant financial harm from the
misappropriation.” Although the trial court concluded that the “case is a close
one,” it ultimately declined to award attorney’s fees against the defendants.
Vention first argues that the trial court should have awarded fees under
RSA 350-B:4, III because the defendants “willfully misappropriated [its] trade
secrets.” Vention argues that the trial court correctly found that the
defendants “engaged in intentional misappropriation of Vention’s intellectual
property,” but, in declining to award fees, improperly relied upon the facts that
Pappas met with an attorney and that she advised him that he was able to
proceed with making HST. Vention argues that this “limited advice” “does not
apply to the circumstances of defendants’ misappropriation and should not
have been used to militate against an award of fees to Vention.” In particular,
Vention argues that “there is no evidence to support that Mr. Pappas’ use of
Vention’s technology . . . in his competing venture was ever within the scope of
[the attorney’s] representation of Mr. Pappas.”
The trial court, however, acknowledged weaknesses in the advice the
attorney gave to Pappas: “whether due to [Pappas’s] insufficient disclosure to
[the attorney] or due to her misunderstanding of the technology, she advised
him that he was able to proceed [with] producing [certain HST products].”
Thus, it does not appear that the trial court misunderstood the circumstances
relating to Pappas’s receipt of that advice, and we cannot say, based upon this
record, that it was an unsustainable exercise of discretion for the trial court to
give some weight to this fact.
Vention additionally argues that the “trial court’s reliance upon the
apparent lack of financial harm as a factor militating against an award of
attorneys’ fees also is misplaced.” Vention argues that it “spent both
significant time and incurred substantial costs in order to protect its
intellectual property.”
21
Notwithstanding Vention’s litigation expenses, the trial court is correct
that Vention’s prompt action likely prevented the defendants from causing
Vention to lose sales or customers. In other words, the defendants’
misappropriation did not cause “significant financial harm” to Vention’s
business in the medical HST field. Given the wide discretion and deference
that the trial court has in determining whether to award attorney’s fees, we
cannot say that it was unreasonable for the trial court to consider the fact that
Vention did not suffer “significant financial harm” to its business beyond the
cost of litigating its claims.
Therefore, we affirm the trial court’s decision not to award Vention
attorney’s fees under RSA 350-B:4, III because it was supported by a finding
that Vention suffered “no significant financial harm” and by the fact that
Pappas at least attempted to obtain legal advice prior to forming Ascend and
building his machine.
Vention next argues that the trial court should have alternatively
awarded it attorney’s fees pursuant to RSA 350-B:4, I. See RSA 350-B:4, I
(permitting a court to award reasonable attorney’s fees to the prevailing party
when “[a] claim of misappropriation is made in bad faith”). According to
Vention, the defendants asserted their counterclaim for misappropriation in
bad faith because, late in the proceedings, they argued that Vention had
brought its lawsuit in order to steal their technology. According to Vention, the
trial court recognized in its order that “[u]ltimately, defendants implicitly
conceded that there were, in fact, no trade secrets.” Vention argues that
“[g]iven the absence of any information even purporting to support the alleged
trade secret claim, it is apparent that defendants asserted this claim even
though they understood the claim had no merit and ultimately did not move
forward with it at trial.”
We disagree with Vention’s contention that the defendants produced no
evidence to support their counterclaim. For example, the defendants produced
evidence of Vention’s “Project 250,” which was an attempt by Vention to
commercialize products similar to those produced by the defendants. Although
the trial court ultimately believed Vention’s evidence that it “ha[d] long been
aware of the materials, process, equipment, and technology necessary to
produce” those products and that it decided not to go forward with the project
for another reason, that does not mean that there was “an absence of any
information even purporting to support” the defendants’ claim. Therefore, we
cannot say, based upon our review of the record, that the trial court
unsustainably exercised its discretion by deciding not to grant attorney’s fees
on this ground.
Vention next argues that it is entitled to attorney’s fees because the
defendants engaged in bad faith litigation. Vention relies upon the defendants’
“bad faith misappropriation of Vention’s trade secrets”; their “bad faith
22
assertion of a trade secret counterclaim”; their “unreasonable method of
conducting a search for documents” during discovery; their “failure to preserve
obviously relevant information, including technical specifications for
defendants’ HST products”; and testimony indicating that the defendants may
not have produced an additional lab notebook. According to Vention, this
evidence “demonstrates by a preponderance of the evidence that defendants
engaged in bad faith actions, actions which not only unnecessarily prolonged
the litigation, but [were] patently unreasonable, and thus sufficient to support
an award of attorneys’ fees.” But see Fat Bullies Farm, 170 N.H. at 30 (“If there
is some support in the record for the trial court’s determination, we will uphold
it.” (quotation omitted)).
As discussed above, the trial court determined that the defendants
neither willfully and maliciously misappropriated Vention’s trade secrets nor
made a bad-faith claim of misappropriation, and there was support in the
record for these determinations. With regard to the purported discovery issues,
we note that the trial court is given “tremendous deference” in determining
whether a party’s actions warrant an award of attorney’s fees. See id.
(quotation omitted). Based upon our review of Vention’s arguments and the
record, we cannot say that it was “clearly untenable” or “clearly unreasonable”
for the trial court to decline to award fees for bad faith litigation. See id.
(quotations omitted). Accordingly, we affirm its decision not to award
attorney’s fees.
Finally, all issues raised in the defendants’ notice of appeal that they
have not briefed are deemed waived. See Lake Forest R.V. Resort v. Town of
Wakefield, 169 N.H. 288, 293 (2016).
Affirmed.
HICKS, BASSETT, and HANTZ MARCONI, JJ., concurred; DALIANIS,
C.J., retired, specially assigned under RSA 490:3, concurred.
23