Court issues Final Judgment and Permanent Injunction on behalf of ResMan following software trade secrets verdict

Houston, 16 August 2021 – Global law firm Hogan Lovells has obtained a Final Judgment in the amount of $62,445,000, not including significant pre-judgment and post-judgment interest amounts and attorneys’ fees owed by defendants, on behalf of client ResMan. The Final Judgment upholds  an earlier jury verdict in a federal trade secrets trial in the Eastern District of Texas.

In March, a jury returned a unanimous verdict awarding $152.29 million damages to ResMan, which had sued former customer Karya after Karya, working with global software development company Expedien, improperly accessed ResMan’s software to develop Karya’s own property management software. ResMan requested that the court reduce the jury’s verdict from $152,290,000 to a Final Judgment amount of $62,445,000 consistent with applicable law. This verdict resulted from the second trial of the case, after the first trial in November 2020 ended in a mistrial due to a COVID outbreak in the courtroom.

Earlier this month, the District Court for the Eastern District of Texas denied the defendants’ motion for judgment as a matter of law and also issued an opinion that rejected the defendants’ attack on the actual damages awarded by the jury. 

In the Final Judgment issued on August 12, the court ruled that ResMan was entitled to all of the actual damages it sought, consisting of $11.4 million in actual damages for Expedien’s trade secrets misappropriation; $9.4 million in actual damages for Karya’s trade secrets misappropriation; and $45,000 for Karya’s breach of contract. Consistent with the law, the court also ruled that ResMan was entitled to punitive damages equal to two times the amount of actual damages awarded for trade secrets misappropriation, or $41,600,000.

The court also issued a Permanent Injunction designed to prevent the defendants from  misappropriating ResMan’s trade secrets going forward. The ruling included the following injunctive relief:

• Karya is precluded from developing any property management software for 24 months.  

• Expedien is precluded from developing any property management software for 48 months.

• Neither Karya nor Expedien can commercially sell or license their previously developed property management software for 96 months.

• The Court appointed United States Magistrate Judge Kimberly C. Priest Johnson as the independent monitor to oversee Karya and Expedien’s compliance with the permanent injunction.

• ResMan is entitled to its attorneys’ and expert witness fees incurred in enforcing the permanent injunction.

Trial counsel Cristina Rodriguez stated: “We are grateful that the Court agreed with the jury’s resounding verdict in favor of ResMan. While the law does not allow ResMan to recover every dollar that the jury awarded, the Final Judgment and Permanent Injunction underscore the jury’s findings about the Defendants’ misconduct.”

“The fact that Karya and Expedien will be enjoined from developing any property management software for the next two and four years, respectively, is a critical part of ResMan’s win,” said trial counsel Maria Wyckoff Boyce. “ResMan now knows that the Defendants will not be able to further benefit from the misappropriation of ResMan’s trade secrets found by the jury.”  

ResMan will now await the Court’s ruling on its request that defendants pay ResMan’s attorneys’ fees and costs in the amount of $14,812,183.74.

The Hogan Lovells team is led by Houston trial partners Maria Wyckoff Boyce and Cristina Espinosa Rodriguez and Washington, DC appellate partner Jessica Ellsworth. Also assisting in the ResMan case are Houston-based senior associates Jillian Beck, Ira Jamshidi, and Lee Whitesell, and associates Jennifer Bevilacqua and Sydney Rupe.

Mike Jones of Potter Minton in Tyler, Texas, served as local counsel.

The case is ResMan, LLC v. Karya Property Management, LLC and Scarlet InfoTech, Inc. d/b/a Expedien, C.A. No. 4:19-cv-00402-ALM, in the United States District Court for the Eastern District of Texas, Sherman Division.

More about the initial jury verdict in the case is here


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