Horvitz & Levy persuaded the Court of Appeal to uphold summary judgment rejecting plaintiff’s $157.7 million trade secrets misappropriation and breach of contract claims.
Intellisoft provided software for a computer Acer America Corporation and Acer, Inc. released in 1992. Intellisoft alleged that it had also developed a secret computer power management technology, and that Acer misappropriated this technology when it applied for a series of computer power management patents starting in 1992.
In 1996, Microsoft, Intel, and Toshiba published a computer power management standard: Advanced Configuration and Power Interface or ACPI. The computer industry quickly implemented ACPI after its 1996 publication without using any information sourced from Intellisoft. Nevertheless, Intellisoft claimed it was entitled to recover a payment for each Acer computer that implemented ACPI, amounting to a $157.7 million, because implementing ACPI necessarily required the use of technology matching the purported trade secrets.
The trial court granted summary judgment in favor of Acer on the ground that by 1997, Intellisoft’s alleged trade secrets were no longer protectable due to the publication and widespread adoption of ACPI, which extinguished Intellisoft’s ability to claim it was damaged by Acer’s post-1996 computer sales. Intellisoft appealed and Acer retained Horvitz & Levy to respond.
The Court of Appeal affirmed the summary judgment in favor of Acer, adopting many of Horvitz & Levy’s arguments. The court held that Intellisoft could not establish entitlement to damages because it could not demonstrate a causal link between its damages theories and the claimed misappropriation, including because there was no evidence of any commercial benefit to Acer based on the patents. The court also rejected Intellisoft’s procedural challenges to the summary judgment proceedings.