Appeals from the United States District Court for the Eastern
District of Texas in No. 4:07-cv-00109-RAS, Judge Richard A.
Michael Ross Cunningham, Cunningham Swaim, LLP, Dallas, TX,
argued for plaintiff-appellant. Also represented by Steven
Dominic Sanfelippo, Thomas C. Wright.
R. Palmore, Morrison & Foerster LLP, Washington, DC,
argued for defendants-cross-appellants. Also represented by
Seth W. Lloyd; Michael Joseph Collins, Robert Millimet,
Brewer, Attorneys & Counselors, Dallas, TX.
Newman, Dyk, and Chen, Circuit Judges.
consolidated appeals arise from a district court action filed
by Raytheon Company (Raytheon) against Indigo Systems
Corporation and FLIR Systems (FLIR) (collectively, Indigo)
for trade secret misappropriation and patent infringement.
The patent infringement claims were settled by the parties
and dismissed. After a three-week trial, a jury found that
Indigo did not misappropriate Raytheon's trade secrets
relating to the production of infrared cameras. The district
court then entered final judgment in favor of Indigo.
Raytheon appeals from the district court's denial of its
motion for judgment as a matter of law and motion for new
trial regarding two of the alleged trade secrets. Indigo
cross-appeals from the district court's decision denying
its motion for attorney fees.
reasons that follow, we affirm the judgment of no liability
in favor of Indigo. We also affirm the district court's
denial of attorney fees.
is an industry leader in infrared technology and produces
infrared imaging equipment. Indigo is a wholly-owned
subsidiary of FLIR that also specializes in infrared imaging
equipment. The technology at issue is embodied in infrared
cameras, which enable people to see in the dark and through
obstructions such as smoke. Inside the infrared camera are
electronics to operate the camera and process digital data
collected by an infrared detector, and a package to house the
infrared detector is the "eye" of an infrared
camera. There are two types of infrared detectors: cooled and
uncooled. A cooled detector is housed within a
"dewar," i.e., a detector package, which is
integrated into a detector dewar cooler assembly. An uncooled
detector is housed within a vacuum detector package assembly.
To operate properly, cooled detectors must be cooled to a
subcryogenic temperature. In contrast, uncooled detectors
operate at an atmospheric ambient temperature. Cooled
detectors are both more expensive and more sensitive than
uncooled detectors. Whether cooled or uncooled, infrared
detectors must be maintained in a vacuum environment to work
was founded in 1996 by four individuals, including three
former Raytheon employees. In 2000, Indigo obtained an
investment by Northrup Grumman to enter the infrared imaging
market. By late 2000, Indigo was manufacturing and selling
its own infrared cameras.
2007, Raytheon filed suit against Indigo in the Eastern
District of Texas, alleging patent infringement as well as
trade secret misappropriation under both California and Texas
law. J.A. 122-33. For the trade secrets claims, Raytheon
alleged that Indigo misappropriated Raytheon's trade
secrets through hiring former Raytheon employees. J.A. 125.
district court granted summary judgment to Indigo in 2009,
finding that Raytheon's trade secrets claims were
time-barred. J.A. 294-311. Indigo then moved for attorney
fees under the Texas Theft Liability Act (TTLA). Tex. Civ.
Prac. & Rem. Code § 134.001-005; J.A. 312-94. The
district court denied the motion on the ground that Indigo
had not pleaded for attorney fees in its answer. J.A. 414-16.
The parties then settled Raytheon's patent claims, and
the district court entered final judgment, dismissing the
patent claims with prejudice. J.A. 417, 11566.
parties cross-appealed-Raytheon from the grant of summary
judgment and Indigo from the denial of fees. This court
reversed the district court's grant of summary judgment,
reasoning that there were factual questions regarding when
Raytheon should have become aware of its misappropriation
cause of action. Raytheon Co. v. Indigo Sys. Corp.,
688 F.3d 1311, 1318-19 (Fed. Cir. 2012). We also vacated the
district court's order denying Indigo's motion for
attorney fees. Id. at 1313 n.1. We noted, however,
that the district court's reliance on the Supreme
Court's decisions in Ashcroft v. Iqbal, 556 U.S.
662 (2009), and Bell Atlantic Corp. v. Twombly, 550
U.S. 544 (2007), to support its conclusion, was misplaced.
Raytheon, 688 F.3d at 1313 n.1. After we remanded
the case to the district court for further proceedings,
id. at 1319, Raytheon amended its complaint,
asserting its trade secret misappropriation claim only under
California law and not Texas law, J.A. 432-49.
began in 2014. Raytheon contended that Indigo had
misappropriated 31 purported trade secrets belonging to
Raytheon. J.A. 4-5. The jury ruled in Indigo's favor on
all 31 alleged trade secrets.
the verdict, Raytheon renewed its motion for judgment as a
matter of law, contending that it had conclusively
established misappropriation of two specific trade secrets
and that judgment should be entered in its favor,
notwithstanding the jury's verdict. J.A. 881-909. The two
trade secrets related to Raytheon's method and use of a
specific sequential vacuum baking procedure (Trade Secret
14), and its process for in situ solder sealing
package assemblies (Trade Secret 30). Although the jury found
that both of these processes were trade secrets, it concluded
that Indigo had not misappropriated either of them. J.A. 4-8,
10. Indigo filed its own renewed motion for judgment as a
matter of law, contending that the evidence failed to
demonstrate that alleged Trade Secrets 14 and 30 are truly
trade secrets. J.A. 737-53. The district court denied both
parties' motions. J.A. 20-23.
also filed an amended motion for attorney fees under the
TTLA. J.A. 680-81. Indigo argued that it qualified as a
prevailing party under the TTLA because Raytheon had
withdrawn its TTLA claim to avoid an unfavorable
determination on the merits, i.e., an adverse
choice-of-law ruling that California law, rather than Texas
law, governed Raytheon's misappropriation claims. J.A.
693-97. In denying Indigo's motion, the district court
observed that Raytheon's continued pursuit of its
misappropriation claims under California law established that
Raytheon's withdrawal of its TTLA claim was not motivated
by a desire to avoid an unfavorable ruling on the merits.
court reviews denials of motions for judgment as a matter of
law and new trial under the law of the regional circuit where
an appeal would otherwise lie. See The-rasense, Inc. v.
Becton, Dickinson & Co., 593 F.3d 1325, 1330 (Fed.
Cir. 2010). Denials of motions for attorney fees under state
law are reviewed under regional circuit standards applying
state law. See Int'l Rectifier Corp. v. Samsung
Elecs. Co., 424 F.3d 1235, 1238 (Fed. Cir. 2005);
Flex-Foot, Inc. v. CRP, Inc., 238 F.3d 1362, 1365-66
(Fed. Cir. 2001). The regional circuit here is the Fifth
Fifth Circuit reviews a denial of a motion for judgment as a
matter of law de novo. See Janvey v. Romero, 817
F.3d 184, 187 (5th Cir. 2016). Judgment as a matter of law is
appropriate only where "the facts and inferences point
so strongly and overwhelmingly in favor of one party that the
court concludes that reasonable jurors could not arrive at a
contrary verdict." Orion IP, LLC v. Hyundai Motor
Am., 605 F.3d 967, 973 (Fed. Cir. 2010) (applying Fifth
Circuit law). The reviewing court must "draw all
reasonable inferences and resolve all credibility
determinations in the light most favorable" to the
jury's verdict. Power-One, Inc. v. Artesyn Techs.,
Inc., 599 F.3d 1343, 1350-51 (Fed. Cir. 2010) (applying
Fifth Circuit law). We affirm a district court's denial
of judg- ment as a matter of law when there was substantial
evidence to support the jury's verdict. Id. at
Fifth Circuit reviews a decision to grant or deny a motion
for a new trial for abuse of discretion. Foradori v.
Harris, 523 F.3d 477, 503-04 (5th Cir. 2008). The
appellate court's "review of the denial of a new
trial motion is more limited than when one is granted."
Whitehead v. Food Max of Miss., Inc., 163 F.3d 265,
269 (5th Cir. 1998). Where a motion for a new trial is based
on insufficiency of the evidence, a district court abuses its
discretion in denying that motion only if the appellant makes
a "clear showing" of "an absolute absence of
evidence to support the jury's verdict."
Id. Thus, in that context, the standard of review is
actually "even more deferential than [the court of
appeals'] review of the denial of a motion for judgment
as a matter of law." Hidden Oaks Ltd. v. City of
Austin, 138 F.3d 1036, 1049 (5th Cir. 1998).
standard of review in the Fifth Circuit for a district
court's denial of attorney fees is abuse of discretion.
See Batton v. IRS, 718 F.3d 522, 525 (5th Cir.
2013). The appellate court reviews de novo the legal question
of a party's eligibility to recover attorney fees under a
statute. Id.; Texas v. Interstate Commerce
Comm'n, 935 F.2d 728, 730 (5th Cir. 1991).
district court entered final judgment in favor of Indigo on
March 31, 2016. Raytheon appealed on April 29, 2016, and
Indigo timely cross-appealed on May 11, 2016. We have
jurisdiction under 28 U.S.C. § 1295(a)(1) (2012).
Although the patent claims that gave rise to jurisdiction
under 28 U.S.C. § 1338 were settled and dismissed with
prejudice, "the path of an appeal is determined by the
basis of jurisdiction in the district court, and is not
controlled by the substance of the issues that are
appealed." Rothe Dev. Corp. v. Dep't of
Def., 545 F.3d 1023, 1034 (Fed. Cir. 2008) (internal
quotation marks and alterations omitted). Where a patent
claim is joined with a state-law claim in the complaint, we
have jurisdiction over the entire appeal of the final
judgment even where, as here, the patent claims have been
dismissed with prejudice. See Chamberlain Grp., Inc. v.
Skylink Techs., Inc., 381 F.3d 1178, 1190 (Fed. Cir.
2004) (holding that this court "retain[s] appellate
jurisdiction over all pendent claims in the complaint"
where the patent claims were dismissed with prejudice below).
principal issues on appeal are: (1) whether the jury's
verdict that Indigo did not misappropriate Raytheon's
Trade Secrets 14 and 30 was supported by substantial
evidence; (2) whether the district court abused its
discretion in denying Raytheon's motion for a new trial;
and (3) whether the district ...