Copyright 1998 New York Law Publishing Company
New York Law Journal
February 26, 1998, Thursday

SECTION: CORPORATE UPDATE; Second Circuit Summaries; Pg. 5

LENGTH: 471 words

HEADLINE: Selected New Decisions by the U.S. Court of Appeals



Vermont Microsystems v. Autodesk

Commercial Law

Calculation of Damage Award Ruled Improper in Software Misappropriation Case

A judgment awarding Vermont Microsystems Inc. $ 14.2 million for Autodesk Inc.'s misappropriation of VMI's secret computer software programs was affirmed in part and vacated in part on Feb. 20.

Circuit Judge Ellsworth A. Van Graafeiland in Vermont Microsystems Inc. v. Autodesk Inc., 97-7255, held that the damage award for the misappropriation was improperly calculated. Following a determination that Autodesk misappropriated VMI's trade secret in a "display list driver," the magistrate judge awarded VMI $ 7,753,410 plus interest. VMI urged the court to increase the award as a deterrent to future violators, and the court nearly doubled the award to reflect the "cost of infringement." Assuming that "cost of infringement" means losses suffered by the victim, the appellate panel found that the term had no place in this case. To allow recovery for both the victim's actual loss and the wrongdoer's unjust enrichment was precluded as a double recovery said the panel. It also noted that VMI was not entitled to punitive or exemplary damages as Autodesk's conduct was ruled not willful and malicious.Ronald S. Rauchberg of Proskauer Rose LLP., represented Autodesk. Robert Luce of Downs, Rachlin & Martin in Burlington, Vt., represented Vermont Microsystems.


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