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On March 21, the Pennsylvania Superior Court vacated a $1.4 million verdict in a trade secret case between Advanced Research System Inc. (ARS) and ColdEdge Technologies Inc., both of which manufacture and sell devices for low temperature scientific research. In 2008, ARS sued ColdEdge and its founders in the Lehigh Valley Court of Common Pleas over allegations that the ColdEdge founders, former ARS employees, had taken hard disks, technical drawings, engineering textbooks, and client lists to form their new business.

In 2010, ColdEdge and its founders were found liable for misappropriation of trade secrets, conversion, unjust enrichment, and civil conspiracy. A 2012 bench trial found them liable for $1.4 million in damages. In the recent ruling vacating the damages, Judge Susan Gantman said that because there was no finding that ARS’s revenue decreased during the relevant period, no “actual loss” was shown with reasonable certainty. Because the award was based on both lost profits and damages suffered, Judge Gantman could not allow the damages to stand.

Judge Gantman did, however, uphold the portion of the verdict which found the defendants liable for theft of trade secrets: “Given the substantial secrecy and independent economic value to ARS of the drawings and the customer database at issue, we conclude the subject information enjoys trade secret protection.”

The case can be found at Advanced Research Systems Inc. v. ColdEdge Technologies Inc. et al, case number 3253 EDA 2012 in the Superior Court of Pennsylvania.

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