Special Master to Decide if Emerson Should Pay BladeRoom's $24.5m Trade Secret Lawsuit Legal Costs

– Bladeroom

Emerson already paid $30m in damages, after a jury agreed that the company used stolen designs to build a Facebook data center

A special master will decide whether Emerson Electric should pay for BladeRoom's legal fees, after a jury last year found Emerson used stolen trade secrets to help win a $200m Facebook contract.

BladeRoom's legal fight against Facebook and Emerson began in 2015, but the company settled separately with Facebook in 2018, for an unknown sum. The social network and advertising company was reportedly eager to settle the open legal case, due to the Cambridge Analytica scandal that was revealed at the time.

No matter who loses, the lawyers always win

Emerson already had to pay BladeRoom $10m in compensation for profits lost, and $20m to make up for Emerson’s “unjust enrichment,” after the jury found that the company had willfully used two trade secrets to build Facebook's data center in Lule?, Sweden.

Bladeroom’s case rested on six crucial documents which showed that Facebook and Emerson conspired to use its designs without commissioning its services.

These included an email in which the pair agreed to have a “direct debrief” after meetings with BladeRoom, an internal document that stated their intention of working “with Emerson, to build a BladeRoom solution” and an email between Emerson employees discussing “l(fā)everaging what BladeRoom has done.”

Now, BladeRoom wants Emerson to pay it $21 million in attorney fees and $3.5 million in costs.

But US District Judge Edward J. Davila said that he does not have the time or staff to make such a determination, and plans to appoint a special master - a subordinate official who can make recommendations to the judge. Davila suggested appointing retired state judge James P. Kleinberg, but said he would give the two companies until August 13 to suggest alternatives.

Davila previously ruled that the California Uniform Trade Secrets Act entitles BladeRoom to reasonable attorney fees and costs, but did not specify what a reasonable cost would entail.

“Nobody is indicating that this is an insignificant amount of fees in this case,” the judge said, Law360 reports. “The plaintiffs say in their motion it’s a big number, because it’s big work done. We all recognize it’s a large number."

Emerson called the cost request “staggering,” and added: “There is simply no fee award in an intellectual property case that even approaches what BladeRoom seeks here."

The company also wants to review BladeRoom's settlement with Facebook to find out how much the social network paid. But Facebook legal representatives argued that they had only entered into the settlement under the agreement that it would remain confidential.

Judge Davila agreed, Law360 reports: "I don’t believe releasing that agreement would assist the court or the parties ... even on an attorneys’ eyes-basis only. I don’t see the relevance of that."