AirFacts, Inc. v. Diego De Amezaga

Summary

In a published opinion, the Fourth Circuit addressed breach of contract and trade secret misappropriation claims under the Maryland Uniform Trade Secrets Act. The court held that an employee's immaterial breach of confidentiality provisions (no proven harm) warranted only nominal damages, and that no "implicit authority" exception allows an employee to retain confidential documents after employment ends. Significantly, the court ruled that reasonable royalty damages for trade secret misappropriation do not require a showing of "commercial use" because the statute expressly covers unauthorized disclosure. The case was affirmed in part, reversed in part (on the breach for retaining proration documents), vacated in part (on the royalty damages standard), and remanded.

Holdings

1. The district court did not clearly err in finding the breaches immaterial and awarding only nominal damages.
2. Amezaga did not breach paragraph 4.2 because the provision only requires return of documents containing confidential information upon termination, and there was no evidence he kept a record of his Lucidchart login credentials.
3. Amezaga breached paragraph 4.2 by retaining proration documents after termination; there is no implicit authority exception to the clear contractual requirement.
4. Commercial use is not a threshold requirement; the statute expressly allows royalty damages for unauthorized disclosure or use.

Questions Presented

1. Whether the district court erred in awarding only nominal damages for certain contract claims
2. Whether the district court erred in finding that Amezaga didn't breach the employment agreement as to other claims (accessing flowcharts and retaining proration documents)
3. Whether the district court erred in refusing to award reasonable royalty damages for trade secrets violation

Disposition

affirmed_in_part_reversed_in_part_vacated_in_part_and_remanded