Digest of TNS Media Research, LLC v. Tivo Research & Analytics, Inc.No. 2014-1668 (Fed. Cir. Sept. 16, 2015) (non-precedential). On appeal from S.D.N.Y. Before Newman, Clevenger, and O’Malley.

Procedural Posture: Plaintiff TNS (doing business as Kantar Media) filed suit seeking a declaratory judgment of non-infringement of Tivo Research & Analytics’ (“TRA’s”) patents. TRA counterclaimed, asserting patent infringement, misappropriation of trade secrets, and breach of contract and fiduciary duty claims against Kantar. TRA appealed the district court’s summary judgment of no misappropriation of trade secrets, of no damages (other than nominal damages) or injunctive relief on its claims of breach of fiduciary duty and breach of contract, and of no infringement of the patents-in-suit. CAFC affirmed in part, reversed in part, vacated in part, and remanded. TRA also requested that the case be reassigned to another judge on remand, but the CAFC denied this request.

  • Discovery Sanctions – Dismissal: Discovery sanctions are reviewed under the law of the regional circuit, and in the Second Circuit such rulings are reviewed for abuse of discretion. The district court abused its discretion when it dismissed all of TRA’s trade secrets claims as a discovery sanction for violating Fed. R. Civ. P. 26(e) based on TRA’s alleged failure to sufficiently identify its trade secrets during discovery. According to the Federal Circuit, however, this harsh sanction was inappropriate under the circumstances because there was no indication that TRA purposefully shirked its discovery obligations, and the district court did not consider the efficacy of lesser sanctions. On remand, the district court should address whether TRA violated Rule 26 and, if there was a violation, craft a more appropriate sanction.
  • Trade Secrets: In the alternative, the district court ruled that TRA’s trade secrets claims would have been dismissed on the merits even if they had not been dismissed as a sanction. The Federal Circuit addressed the individual trade secret claims separately as follows:The district court improperly granted summary judgment that information related to how the TRA products operate was not secret. There remains an unresolved question of fact as to whether the information was secret and whether Kantar wrongfully used it.With regard to TRA’s customer information, the district court improperly granted summary judgment that Kantar did not misappropriate TRA’s customer information. While the district court did not err in concluding that TRA’s client list was not a trade secret, the district court failed to evaluate whether other client information, such as customer contract terms, customer proposals, and customer pricing were protectable.As to TRA’s financial projections and strategic plans, the CAFC reversed the district court as improperly holding that this information was not protectable as trade secrets as a matter of law because in the Second Circuit, proprietary financial projections and strategic plans may be protectable where the information is not publicly known, not readily identifiable without inside information, or otherwise complex.

    The district court properly dismissed TRA’s trade secrets claim as to information related to TRA’s product positioning in the market. This information is not recognized as a trade secret.

  • Compensatory Damages For Non-Patent Claims: The CAFC reversed the district court ruling that TRA was entitled only to nominal damages for its non-patent claims relating to breach of fiduciary duty, breach of contract, and misappropriation of trade secrets. TRA sought damages for these non-patent claims based on a “frozen market” theory and submitted an expert report asserting that Kantar’s release of a competing product froze the market to TRA’s detriment. The district court did not abuse its discretion when it excluded TRA’s expert’s report on the “frozen market” theory. The expert had merely assumed that Kantar’s release of a competing product impacted TRA’s market value, instead of analyzing the actual impact of this release. However, it was inappropriate for the district court to prohibit TRA from pursuing a claim for damages based on the “frozen market” theory because TRA was able to cite to other evidence in the record to support its contention that Kantar’s actions had a deleterious effect on its market value.The district court properly concluded that TRA could not assert its other compensatory damages theories as a matter of law. The district court did not err in concluding that TRA dropped its other theories before the summary judgment phase of the case.
  • Punitive Damages For Non-Patent Claims: Punitive damages require proof that a party has acted with actual malice or such wanton, willful, or reckless disregard for a plaintiff’s rights. The district court erred when it concluded as a matter of law that TRA was not entitled to punitive damages for its breach of fiduciary duty and contract claims because TRA presented sufficient evidence to create a colorable question about Kantar’s intent to injure TRA.
  • Injunctive Relief For Non-Patent Claims: The district court did not err in dismissing as moot TRA’s claim for injunctive relief for breaching a non-disclosure agreement because the agreement had expired. However, the district court erred in dismissing as moot TRA’s theory that Kantar breached its fiduciary duty to TRA as a result of it manipulating its representative on TRA’s board to obtain critical confidential information. Even though Kantar no longer was represented on TRA’s board, Kantar’s fiduciary obligation did not cease simply because of that. The district court could issue an injunction prohibiting use of information learned while Kantar had a representative on TRA’s board.
  • Claim Construction –Further Construing Stipulated Construction: The CAFC vacated the district court’s summary judgment of non-infringement with respect to Kantar’s CPG products due to an improper construction by the district court of the parties’ stipulated construction. The parties stipulated to the construction of a certain claim term during claim construction, but later contested at the summary judgment stage whether this stipulated construction required its own construction. It was improper procedure for the district court to further construe the parties’ stipulated construction and grant Kantar’s motion for summary judgment of no infringement based on that further construction, without affording either party notice or opportunity to present argument about the appropriate construction. Additional input from the parties may have altered the court’s view of this determinative question.
  • Infringement – Doctrine of Equivalents: With respect to Kantar’s CPG products, the district court did not err when it dismissed TRA’s doctrine of equivalents theory of infringement because it found that the only evidence submitted in support of this theory, TRA’s infringement expert testimony, was inadequate. A party is not required to submit expert testimony as evidence of equivalents. However, since the only evidence TRA submitted to establish infringement under the doctrine of equivalents was an inadequate expert report, the district court did not err in dismissing the doctrine of equivalents argument.
  • Infringement – No Genuine Issue as to Material Fact: With respect to Kantar’s Auto Products, the district court properly found that there was no evidence to support TRA’s claim that the accused products perform a required step of the asserted claims. To create a triable issue of fact in response to a summary judgment motion, the nonmoving party must proffer evidence sufficient for a jury to find for that party. TRA alleged that the Unique key ID used by the Kantar Auto Products amounted to anonymous, masked automobile registration data sufficient to satisfy the double-blind matching limitation of the claimed invention, but the district court did not err in ruling that TRA failed to provide any evidence in support of this allegation.
  • Reassignment of the Case on Remand: The CAFC did not find any glaring errors in the district court’s rulings that warrant reassignment of the case on remand. While the CFAC disagreed with some of the district court’s rulings, it affirmed many others. The Second Circuit rarely allows reassignment, and has done so only in instances much more egregious than the present case.