Ajaxo Inc. v. E Trade Financial Corp.

Plaintiff Ajaxo Inc. (Ajaxo) sued defendant E*Trade Financial Corporation (E*Trade) for misappropriation of trade secrets under California’s Uniform Trade Secrets Act (Civ. Code, §§ 3426-3426.11; CUTS A). E*Trade’s liability was established in a prior trial where a jury determined that E*Trade had willfully and maliciously misappropriated Ajaxo’s trade secrets. (See Ajaxo Inc. v. E*Trade Group Inc. (2005) 135 Cal.App.4th 21, 26 [ 37 Cal.Rptr.3d 221 ] (Ajaxo I).) This matter comes to us following the second trial in which the single factual dispute before the jury was the extent to which E*Trade had been unjustly enriched by its misappropriation.

Under the CUTSA, Ajaxo was entitled to recover damages for its actual loss caused by the misappropriation and also for E*Trade’s unjust enrichment not taken into account in computing Ajaxo’s actual loss. (§ 3426.3, subd. (a).) If neither actual loss nor unjust enrichment were “provable,” the trial court had discretion to order E*Trade to pay Ajaxo a reasonable royalty. (§ 3426.3, subd. (b).) Electing to pursue damages measured only by E*Trade’s unjust enrichment, Ajaxo submitted evidence intending to show that E*Trade had been…