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Olson v. Nieman's5/28/1998
rict court's refusal to award either exemplary damages or attorney fees pursuant to Iowa Code chapter 550. 205 Corp. v. Brandow, 517 N.W.2d 548, 553 (Iowa 1994).
Iowa Code sections 550.4(2) and .6(3) provide that the district court "may award exemplary damages" and "may award actual and reasonable attorney fees" if a party willfully and maliciously misappropriated a trade secret.
1. Exemplary damages. The district court denied exemplary damages because it found Nieman had not unjustly enriched itself. The evidence shows that Nieman abandoned any effort to market the device after the November 1992 trade show and made little, if any, profit from sales of the device. Contrary to Olson's contention, we think this was sufficient reason to deny exemplary damages.
In addition, there was evidence that Nieman had been recently sold for about $1.2 million plus assumption of debts. We agree with Nieman that a judgment of almost half of the company's net worth is severe enough punishment, which is the object of exemplary damages. See Ezzone v. Riccardi, 525 N.W.2d 388, 398 (Iowa 1994) (" unitive damages are awarded, not because the plaintiff deserves them, but as punishment, to deter the defendant and others from repeating similar outrageous conduct."); see also Read Corp. v. Portec, Inc., 970 F.2d 816, 826-27 (Fed. Cir. 1992) (holding that it is appropriate to consider defendant's size and financial condition on question whether to grant enhancement damages up to three times the compensatory award in patent infringement cases).
We find no abuse of discretion here.
1. Attorney fees. The district court gave the following reasons for denying attorney fees to Olson:
When litigation is involved and a claim for attorney fees is made, the Court will often seek to determine whether the litigation was frivolous, unduly prolonged and harassing in nature, or conversely was the result of sincere difference of opinion or interpretation of fact or law. As may be gleaned from previous sections of this opinion, this Court has found itself confronted with complex, novel and vexing issues of law and fact. This Court faults neither party for resorting to judicial resolution of their differences. Olson contends an award of attorney fees is necessary in order to "make Plaintiff whole". This Court is of the opinion that the jury verdict has amply served that purpose.
We think these reasons serve as an adequate basis for the district court's decision to deny Olson attorney fees.
A. The supplemental special interrogatory. Olson also complains because the district court submitted a supplemental special interrogatory. The interrogatory, in effect, asked the jury to apportion the $650,000 damages award among the three theories of recovery submitted: breach of contract, misappropriation of a trade secret, and common-law tort of misappropriation of intellectual property. The jury assigned the $650,000 award to the misappropriation- of-trade-secret claim.
We review jury instructions for correction of errors at law. Grefe & Sidney v. Watters, 525 N.W.2d 821, 824 (Iowa 1994).
If there was any error in submitting the interrogatory, it was harmless. By assigning the whole amount of the recovery to the misappropriation-of-trade- secret theory, the jury avoided a duplication of damages problem. See Lara v. Thomas, 512 N.W.2d 777, 783 (Iowa 1994). Olson was only entitled to $650,000 as the jury originally found, and that is exactly the judgment the district court ultimately awarded him.
A. The common-law tort of misappropriation of intellectual property. The district court sustained Nieman's motion for judgment
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