ClearOne Wins Almost $10 Million Judgement Against Biamp

ClearOneA federal court issued a Memorandum Decision and Order on April 21 in favor of ClearOne Communications, Inc., awarding it approximately $9.7 million in joint-and-several and individual judgments against Biamp Systems Corporation and a group called WideBand Solutions, Inc. – three of WideBand’s principals – Dr. Jun Yang (a former ClearOne employee), Andrew Chiang (previously affiliated with an entity that sold certain assets to ClearOne), and Lonny Bowers; and a company owned primarily by Yang, named Versatile DSP, Inc.. In addition, the court adopted and upheld the jury’s finding that all defendants had acted willfully and maliciously in misappropriating ClearOne’s trade secrets, and awarded exemplary damages against each of the defendants.

The Final Order was issued in the case, which was presented to a jury in October and November 2008, brought claims for, among other things, theft of ClearOne’s trade secrets. On November 5, 2008, the jury returned a unanimous verdict in the Intellectual Property Case in favor of ClearOne and against all of the defendants, awarding ClearOne millions of dollars in damages, and finding that all of the defendants willfully and maliciously misappropriated ClearOne’s trade secrets.

In fact, the court ruled that the finding of willful and malicious trade secret misappropriation by Biamp was supported because “Biamp deliberately ignored numerous warning signs suggesting that the AEC technology offered by WideBand was not WideBand’s to sell. Given all the facts presented to Biamp at the time, it could not have held a good faith belief that its use of the WideBand code was valid,” and that Biamp earned over $1.5 million “by purchasing the WideBand technology at half the price offered by ClearOne and then selling the technology at the same price it charged when dealing with ClearOne.” The court also wrote that “having reviewed the testimony of Biamp’s witnesses… the court finds that the jury (who has the sole responsibility to assess witness credibility) reasonably found by clear and convincing evidence that Biamp’s behavior was willful and malicious.” For these and other reasons, the court concluded that “an award of exemplary damages against Biamp is appropriate to punish Biamp for ignoring its due diligence duties in order to profit at the expense of a competitor and to send a message deterring other companies from engaging in similar conduct.”