PROOF That Hp “Willfully and Maliciously ” Monitors Ink Distributors

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PROOF That Hp “Willfully and Maliciously ” Monitors Ink Distributors
PROOF That Hp “Willfully and Maliciously ” Monitors Distributors of Its Printer Ink Cartridges
Columbus company’s jury verdict against HP upheld, raised to $8M
BY Carrie Ghose

A Delaware state judge has upheld a $6.5 million jury verdict a Columbus company won against Hewlett-Packard Co. for misappropriation of trade secrets and defamation, and awarded an estimated $1.5 million in legal fees and costs on top of that.

Professional Investigating and Consulting Agency Inc. – itself in the business of protecting the intellectual property of major brands – won the trial in October against its former client HP. I wrote about how the dispute had nonetheless cost the company and founder Vincent Volpi.

New Castle County Superior Court Judge Mary Johnston in an opinion issued Monday denied HP’s motions for a new trial and to reduce the jury award. (HP is based in California but incorporated in Delaware.)

The jury on Oct. 27 awarded PICA $1 million for a finding that HP “willfully and maliciously misappropriated” PICA’s plan for a program to surreptitiously monitor distributors of its printer ink for counterfeit and fraud. It awarded $5.5 million in “humiliation damages” for defamatory statements at a trade conference.

“The court finds that the jury’s verdict is reasonable and consistent with the evidence,” her ruling said. “The jury’s damages awards are not so grossly disproportionate to the injuries suffered that they shock the court’s conscience and sense of justice.”

The judge did not award another $2 million in exemplary damages – an option made possible by the “willful and malicious” finding – but said that was only because of the defamation award.

“If the trade secret claim were the only amount awarded to PICA, the court would grant exemplary damages,” she wrote.

An HP spokeswoman told me the company intends to appeal to the Delaware Supreme Court. The $111 billion company had argued to Johnston that “the notion that PICA was ‘humiliated’ in an amount 35 times its net income over a five-year period defies comprehension.”

The court said public criticism of PICA’s performance was not pure opinion, which would be protected as free speech, but factual assertions the jury determined were largely false. The judge also considered “relatively insular nature of the brand protection industry in Latin America” and the effect HP’s statements would have on PICA’s customers who heard them.

The judge awarded 75 percent of PICA’s attorney fees and legal costs such as paying expert witnesses, plus additional compensation for last-minute depositions and motions because HP had withheld certain documents until 12 days before the trial. In the trade secret claim, the judge also awarded interest on PICA’s $300,000 lost profit from 2010 to 2013.

PICA’s attorney, Christopher Lee, told me via email that based on bills submitted to the court, that increases the total award to nearly $8 million, with $1,100 in interest accruing daily.

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March 30, 2015 at 12:51 PM