EDVA Jury Awards Florida Mining Tire Design Company $26M in Trade Secret Case

In mid-July, 2010, an Eastern District of Virginia jury returned a $26 million verdict in favor of Florida underground mining tire designer and distributor Tire Engineering & Distribution, LLC (d.b.a. Alpha Tire Systems) and its owner, Jordan Fishman, in a trade secret case against China-based tire manufacturer Shandong Linglong Rubber Co., Ltd. and United Arab Emirates-based distributor Al Dobowi Tyre Co., LLC.

The plaintiffs had alleged that, in 2005, former Tire Engineering sales and marketing manager Sam Vance disclosed trade secrets to the defendants, that the parties had conspired to steal these secrets, and that that the defendants had infringed the plaintiffs’ copyrights and trademarks.  Reportedly, Vance had provided defendants with plaintiffs’ “design blueprints, customer lists, and pricing information,” and defendants had used these to develop a competing enterprise.

On July 20, subsequent to the jury verdict, the defendants filed a renewed motion for judgment as a matter of law pursuant to Rule 50(b) of the Federal Rules of Civil Procedure.  The memorandum in support of its motion argues in part that the plaintiffs had staked jurisdictional claims on allegations that “a conspiracy was commenced at a meeting in Virginia” in 2005 between several of the defendants and their representatives.  The defendants deny that such a conspiracy was commenced, as well as that the defendants engaged in any conspiracy through email, and on these and other bases argue that the EDVA lacks jurisdiction.  The defendants further dispute that any valid secrets have been stolen, that any valid IP has been infringed, and that the award is reasonable.

The EDVA jury’s award comes on the heels of a default judgment and $59 million award for Tire Engineering in a related case in Florida state court that was subsequently and recently reversed on appeal for want of jurisdiction over defendant Vance.  The default judgment had been entered after Vance failed to appear in court.  Tire Engineering’s counsel has been granted leave to amend the complaint, and reportedly plans to refile.

Virginia Lawyers Weekly reported on the EDVA case here.