Defense Set Up Bad Faith By Sending Litigation Communicative Warnings to Loser Which Showed Claim Was Stale.
We have discussed Civil Code section 3426.4 several times. This provision allows a court to discretionarily award reasonable attorney’s fees and costs to a prevailing party where a claim of trade secret misappropriation was made in bad faith. The winning defendants in General Nanotechnoogy LLC v. Lawrence Livermore National Security LLC, Case Nos. A129016 et al. (1st Dist., Div. 5 June 27, 2012) (unpublished) did a good job of sending communications to plaintiffs and gaining admissions during the course of litigation so as to demonstrate why their trade secret claims were time barred, and the defense proved it through a successful summary judgment motion. Although requesting over $2.371 million in fees and costs, the trial court presumably apportioned and awarded fees of $189,565.50 and costs of $121,706.49 under section 3426.4.
Bad faith could be inferred from the fact plaintiffs pressed on with their misappropriation claims long after receiving warnings from the other side about the staleness of the claims. Also, deposition admissions about the timeliness of the claim also put the nail in the proverbial coffin from a sufficiency of evidence standpoint. Fee award affirmed.