Ams-Osram USA Inc., Fka Ams Sensors USA, Inc., Fka Texas Advanced Optoelectronic… v. Renesas Electronics America, Inc., Fka Intersil Corporation

United States Court of Appeals
for the Federal Circuit
______________________
AMS-OSRAM USA INC., FKA AMS SENSORS USA,
INC., FKA TEXAS ADVANCED OPTOELECTRONIC
SOLUTIONS, INC.
Plaintiff-Cross-Appellant
v.
RENESAS ELECTRONICS AMERICA, INC., FKA
INTERSIL CORPORATION,
Defendant-Appellant
______________________
2022-2185, 2022-2186
______________________
Appeals from the United States District Court for the
Eastern District of Texas in No. 4:08-cv-00451-ALM, Judge
Amos L. Mazzant, III.
______________________
Decided: April 4, 2025
______________________
C HASE C OBERN, Munck Wilson Mandala, LLP, Dallas,
TX, argued for plaintiff-cross-appellant. Also represented
by MICHAEL A. MCCABE , R OBERT D. MC C UTCHEON, JORDAN
C. STRAUSS, MICHAEL CRAIG WILSON.
SETH W. L LOYD, Morrison & Foerster LLP, Washing-
ton, DC, argued for defendant-appellant. Also represented
by B RIAN R OBERT MATSUI, DANIEL P. MUINO; J OEL F.
WACKS, San Francisco, CA.
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 2
______________________
Before T ARANTO, SCHALL, and CHEN, Circuit Judges.
T ARANTO, Circuit Judge.
In 2008, plaintiff ams-OSRAM USA Inc. (formerly
named Texas Advanced Optoelectronic Solutions, Inc. and
hereafter called “TAOS”) sued Renesas Electronics Amer-
ica, Inc. (formerly named Intersil Corporation and hereaf-
ter called “Intersil”) in a federal district court in Texas.
TAOS asserted patent infringement, but that claim is no
longer at issue. TAOS also asserted state-law claims, of
which two remain in the case: misappropriation of trade
secrets, and breach of a confidentiality agreement. In sup-
port of both claims, which relate to ambient-light sensors
used in electronic products to adjust screen brightness in
response to incident light, TAOS asserted that Intersil
used information that TAOS revealed to it in confidence.
Intersil’s liability on those claims is no longer disputed, but
issues about monetary remedies are now before us.
After a jury rendered a verdict for TAOS in 2015, the
district court entered judgment that awarded money for
trade-secret misappropriation but not for contract breach,
deeming the jury’s contract-breach award to be duplicative
of the trade-secret award. In 2018, we affirmed Intersil’s
liability for trade-secret misappropriation on a more lim-
ited basis than had been presented to the jury. We there-
fore vacated the trade-secret monetary award and
remanded, adding that (exemplary damages aside) what
TAOS sought was disgorgement of profits that in this case
had to be decided by the judge, not the jury. In light of our
disposition of the trade-secret award, we also vacated the
judgment that had denied an award for contract breach as
duplicative of the (originally broader) trade-secret award.
We remanded for appropriate proceedings. Texas Ad-
vanced Optoelectronic Solutions, Inc. v. Renesas Electronics
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 3
America, Inc., 895 F.3d 1304, 1332 (Fed. Cir. 2018) (TAOS
2018).
On remand, the case narrowed to the trade-secret and
contract issues, and the district court held additional pro-
ceedings, including a new jury trial, that led to a jury ver-
dict and to findings made by the district judge. Regarding
TAOS’s remedy for Intersil’s misappropriation of TAOS’s
trade secret, the resulting monetary award had two parts:
(1) a sum, determined by the district judge, representing
disgorgement of Intersil’s profits from certain sales of its
ISL29003 product; and (2) exemplary damages of double
that sum, arrived at by applying a Texas statute to reduce
the higher amount of exemplary damages the jury found
warranted. Regarding TAOS’s remedy for Intersil’s breach
of contract, the resulting monetary award, based on the
jury’s verdict and TAOS’s election of remedies, was a rea-
sonable royalty on Intersil’s sales of products other than
the ISL29003. As relevant here, TAOS also was awarded
prejudgment interest on both the just-noted awards and at-
torneys’ fees for its work on the contract claim.
Both parties appeal. We affirm the monetary awards,
with one exception. We agree with Intersil that the district
court erred in one aspect of its disgorgement analysis, but
that aspect by itself ends up making no difference to the
disgorgement award, given that we reject all other chal-
lenges to the appealed rulings on the trade-secret and con-
tract awards, including Intersil’s as well as TAOS’s
challenges. We also affirm the award of attorneys’ fees.
But we find error in the district court’s analysis of prejudg-
ment interest, and we remand on that issue.
I
A
In June 2004, TAOS and Intersil had discussions about
a possible merger, discussions covered by a confidentiality
agreement having an expiration date of June 3, 2007. J.A.
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 4
14922–25. In due-diligence work as part of the discussions,
TAOS gave Intersil confidential information about TAOS’s
ambient-light-sensor technology. Merger discussions
ended in August, and Intersil quickly began using some of
the confidential information to develop its own competing
products, including the ISL29003 and other (related) so-
called “Primary Products” as well as several other “Deriv-
ative Products.” See, e.g., TAOS 2018, at 1309–10, 1316;
J.A. 48, 82–83, 15075–83.
TAOS publicly released a product incorporating previ-
ously secret information in early 2005 (we may use Febru-
ary 28, 2005, if precision is needed, according to Intersil at
oral argument in this court). See TAOS 2018, at 1317; J.A.
109; Oral Arg. at 1:52–2:02, available at https://oralargu-
ments.cafc.uscourts.gov/default.aspx?fl=22-2185_020320
25.mp3. Intersil, for its part, became an approved vendor
of the ISL29003 for Apple’s iPod Touch in September 2006,
J.A. 15324, and for Apple’s iPhone 3G between January
and March 2008 (after relevant 3G-specific sales efforts
started in August 2007), J.A. 11699–11701; TAOS 2018, at
1310. Intersil sold substantial volumes of such products to
Apple following those approvals (sometimes called “design
wins” in this case). See J.A. 84–85, 11772–82, 12017–18,
15814–15, 15870–71.
B
In November 2008, TAOS sued Intersil in federal dis-
trict court for patent infringement and for several state-
law wrongs, i.e., trade-secret misappropriation, breach of
contract, and tortious interference with prospective busi-
ness relations. TAOS 2018, at 1308. “[A] jury returned a
verdict for TAOS on all claims” and awarded various sums
as monetary relief, including (relevant now) disgorgement
of profits ($48,783,007) and exemplary damages ($10 mil-
lion) on the trade-secret claim and reasonable-royalty dam-
ages ($12 million) on the contract claim. Id. at 1310; see
Verdict of the Jury at 1–3, Texas Advanced Optoelectronic
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 5
Solutions, Inc. v. Intersil Corp., No. 4:08-CV-00451 (E.D.
Tex. Mar. 6, 2015), ECF No. 511 (2015 Jury Verdict).1 The
district court subsequently eliminated the contract dam-
ages from the final judgment as duplicative of the trade-
secret award. See TAOS 2018, at 1311.
In the appeal that we decided in 2018, we addressed
several issues, of which the trade-secret and contract is-
sues are relevant now. We affirmed the judgment of liabil-
ity for trade-secret misappropriation, though on a
narrower basis than had been presented to the jury. Id. at
1311–17. The narrowing necessitated a remand for rede-
termination of the proper monetary award for that wrong.
Id. at 1317. Such a redetermination was also needed to
ensure that findings would be made of two facts: (1) the
time at which the trade secret became “properly accessible
to Intersil” and (2) the length of “any head-start period”
within which Intersil’s acts should be found tainted so as
to erase the “‘head start’ on the competition” from Intersil’s
jumping the gun in using the secret information, “which
‘depend[s] upon the facts of each particular case.’” Id. at
1317–18 (quoting Hyde Corp. v. Huffines, 314 S.W.2d 763,
777–78 (Tex. 1958) (alteration in original)). We noted In-
tersil’s assertion of a 22-month head-start period and
TAOS’s assertion to the jury of a “similar” period. Id. at
1318. We further held, in agreement with Intersil, that
TAOS’s request for a trade-secret award consisting of dis-
gorgement of Intersil’s profits had to be made by the dis-
trict judge (not a jury) because, in this case, the money
sought was an equitable remedy of disgorgement of profits
as such (not as a measurement of TAOS’s losses). Id. at
1318–26; see id. at 1319 (proceeding on agreed-on premise
1 We hereafter refer to Case No. 4:08-CV-00451 (E.D.
Tex.) as TAOS D. Ct., identifying documents entered on the
docket by date and Electronic Case Filing (ECF) number.
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 6
that if no jury right for the remedy existed, the remedy had
to be decided by the judge).
We briefly addressed the exemplary-damages award
for trade-secret misappropriation. Id. at 1318. In a one-
paragraph argument on the point, Intersil had submitted
that, if we vacated the disgorgement award, we “should
also ‘reverse and remand the trial court’s award of exem-
plary damages,’ because those damages were likely predi-
cated on the amount of the actual damages.” Corrected
Brief for Defendant-Appellant Intersil Corp., TAOS 2018,
Fed. Cir. No. 16-2121, ECF No. 33, 2016 WL 6743913, at
*57; id. at *57–58 (stressing the “obligation to give consid-
eration to the ratio between exemplary and actual dam-
ages” (quoting McDonald v. Bennett, 674 F.2d 1080, 1092
(5th Cir. 1982))). Intersil did not argue that the equitable
character of the disgorgement remedy precluded any
award of exemplary damages for trade-secret misappropri-
ation here. Nor did it argue that we should vacate the
jury’s finding of the premise for an exemplary-damages
award—that “the Defendant’s misappropriation of the
Plaintiff’s trade secrets resulted from the Defendant’s
fraud, malice, or gross negligence.” 2015 Jury Verdict, at 3
(Answer to Question No. 5). TAOS did not dispute Inter-
sil’s limited submission, and we adopted the agreed-on po-
sition. TAOS 2018, at 1318.
Finally, with respect to the contract claim, we vacated
the district court’s determination that the contract award
was duplicative of the disgorgement award (given the va-
catur of the disgorgement award) and remanded for the
district court to determine how to proceed on the contract
claim. Id. at 1332.
C
On remand, the district court allowed TAOS to argue
that it was entitled to “re-elect its remedy,” and the case
was narrowed to the trade-secret and contract claims,
which required damages to be retried. Texas Advanced
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 7
Optoelectronic Solutions, Inc. v. Renesas Electronics Amer-
ica, Inc., No. 4:08-CV-00451, 2020 WL 1495230, at *1, *3
n.2 (E.D. Tex. Mar. 27, 2020). A jury trial was held in April
2021. The jury provided an advisory verdict on disgorge-
ment of profits for trade-secret misappropriation (to be de-
termined by the district judge), finding that the trade
secret did not become properly accessible to Intersil until
January 30, 2006; the head-start period was 26 months;
and a disgorgement award of $8,546,000, for Intersil’s sales
of the ISL29003, was warranted. Verdict of the Jury at 4,
TAOS D. Ct. (Apr. 16, 2021), ECF No. 824. The jury also
awarded TAOS $64,000,000 in exemplary damages for In-
tersil’s “fraud, malice, or gross negligence in misappropri-
ating [TAOS]’s trade secret.” Id. at 5. For breach of
contract, the jury awarded TAOS reasonable-royalty dam-
ages on two sets of Intersil products: $6,701,743 for Pri-
mary Products (which include the ISL29003) and
$6,637,693 for Derivative Products (which do not include
the ISL29003). Id. at 2, 6.
On August 12, 2021, the district court ruled on TAOS’s
options in electing remedies. Memorandum Opinion and
Order at 17–22, TAOS D. Ct. (Aug. 12, 2021), ECF No. 853
(Election of Remedies Decision). The court allowed TAOS
to “elect the $8,546,000 in disgorged profits awarded by the
jury” for ISL29003 sales (other than for the iPhone 3G), if
that award stood after the district judge made his own find-
ings, id. at 18–19, while ruling that exemplary damages
would be limited to twice the disgorgement sum, i.e., to
$17,092,000, in accordance with a Texas statute, id. at 19–
21 (applying TEX. C IV . P RAC . & REM . C ODE A NN. § 41.008,
which places certain limits on exemplary damages). For
contract damages, the court ruled that TAOS could “elect
to recover the entire royalty award for the Derivative Prod-
ucts” (which do not include the ISL29003) but any elected
royalty for the Primary Products had to exclude the
ISL29003. Id. at 22; see id. at 10–17.
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 8
On December 14, 2021, the district court entered find-
ings of fact and conclusions of law regarding TAOS’s dis-
gorgement award. Findings of Fact and Conclusions of
Law, TAOS D. Ct. (Dec. 14, 2021), ECF No. 855 (Disgorge-
ment Determination). Like the jury, the district court
found that the trade secret first became properly accessible
to Intersil in January 2006, when Intersil successfully re-
verse-engineered the trade secret from TAOS’s TSL2560
product, which was available to the public by February
2005. Id. at 21–26. Like the jury, the district court next
found that the head-start period—“how long it would have
taken [Intersil] to realistically compete in the [ambient
light sensor] market without the benefit of [TAOS]’s tech-
nology”—was 26 months. Id. at 30, see also id. at 30–36.
Based on those determinations, the district court found the
proper disgorgement award to be $8,546,000, representing
profits Intersil earned from sales of ISL29003 units to Ap-
ple for use in the iPod Touch (first and second generations),
all of which depended on Intersil’s “design win” in Septem-
ber 2006, which was before the 26 months from January
2006 elapsed (in March 2008). Id. at 36–43. The court
rejected TAOS’s request to include Intersil’s profits from
sales of the ISL29003 to Apple for use in the iPhone 3G in
the disgorgement award. Id. at 42–43.
The district court entered its final judgment on March
7, 2022. Final Judgment at 1–2, TAOS D. Ct. (Mar. 7,
2022), ECF No. 870 (Final Judgment). The trade-secret
award consisted of $8,546,000 for disgorgement and
$17,092,000 in exemplary damages, and the contract
award consisted of reasonable-royalty damages of
$6,637,693 and $613,014, respectively, from Derivative
Product sales (none of which were ISL29003 sales) and
from the non-ISL29003 portion of Primary Product sales.
Id. The court added an award of prejudgment interest of
$5,580,655.07 and $9,469,621.99 for the disgorgement and
reasonable-royalty awards, respectively. Id. In calculating
those interest amounts, the court relied on its conclusions
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 9
that the entitlement to prejudgment interest began accru-
ing on November 25, 2008, when TAOS filed suit, and ran
until December 14, 2021, when the court entered its find-
ings of fact and conclusions of law. See Memorandum
Opinion and Order at 8–9, 9 n.5, 12 & n.6, TAOS D. Ct.
(Mar. 7, 2022), ECF No. 869 (Prejudgment Interest Deter-
mination).
The court subsequently denied motions to amend the
findings, grant a new trial, or grant judgment as a matter
of law on July 25, 2022. Memorandum Opinion and Order
at 1, TAOS D. Ct. (July 25, 2022), ECF No. 915 (jury-deci-
sion issues); Memorandum Opinion and Order at 1, TAOS
D. Ct. (July 25, 2022), ECF No. 916 (judge-decision issues).
And on August 10, 2022, the court awarded TAOS
$3,908,811.60 in attorneys’ fees arising from work on the
contract claim, concluding that the contract, governed by
California law, J.A. 14924 ¶ 12, provided for such fees.
Memorandum Opinion and Order at 5–9, 12–17, 22, TAOS
D. Ct. (Aug. 10, 2022), ECF No. 917.
D
The parties timely appealed. We have jurisdiction un-
der 28 U.S.C. § 1295(a)(1). See Chamberlain Group, Inc. v.
Skylink Technologies, Inc., 381 F.3d 1178, 1190 (Fed. Cir.
2004) (holding that this court “retain[s] appellate jurisdic-
tion over all pendent claims in the complaint” even after
the patent claims have been dismissed with prejudice).
Liability for trade-secret misappropriation and breach
of contract is not in dispute. Intersil presents a host of
challenges to the amounts of money awarded. TAOS chal-
lenges the denial of disgorgement for profits from Intersil’s
sales of devices for use in Apple’s iPhone 3G.
For issues not unique to patent law, we apply the law
of the regional circuit for the district court, LaserDynamics,
Inc. v. Quanta Computer, Inc., 694 F.3d 51, 66 (Fed. Cir.
2012), which here is the Fifth Circuit. The Fifth Circuit
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 10
reviews a district court’s ruling on the interpretation of
state law de novo. American Reliable Insurance Co. v. Nav-
ratil, 445 F.3d 402, 404 (5th Cir. 2006). We apply Fifth
Circuit law to procedural issues, and we apply the relevant
state law to substantive issues. An election of remedies is
a choice between substantive rights, and it is governed here
by Texas state law. United States Fidelity & Guaranty Co.
v. First National Bank in Dallas, Texas, 172 F.2d 258, 262
(5th Cir. 1949). The Fifth Circuit reviews a jury’s factual
findings for substantial-evidence support. OneBeacon In-
surance Co. v. T. Wade Welch & Associates, 841 F.3d 669,
675–76 (5th Cir. 2016). The contract at issue states that it
is governed by California law. J.A. 14924 ¶ 12.
II
We first consider the awards for trade-secret misappro-
priation. We apply Texas law to these awards. TAOS
2018, at 1311–12. We review the disgorgement award
“only for an abuse of discretion.” Burkhart Grob Luft und
Raumfahrt GmbH & Co. KG v. E-Systems, Inc., 257 F.3d
461, 469 (5th Cir. 2001).
A
The district court found that TAOS’s trade secret be-
came properly accessible only in January 2006, when In-
tersil successfully reverse-engineered the trade secret from
TAOS’s product. Disgorgement Determination, at 21–26.
Intersil challenges that finding as resting on legal error,
arguing that the trade secret first became accessible to it
when it could have reverse-engineered the trade secret, by
February 28, 2005, after TAOS’s release of the TSL2560.
Intersil’s Opening Br. at 21–27; Oral Arg. at 1:52–2:02. We
agree with Intersil and reverse the district court’s finding
of the proper accessibility date.
In response to Intersil’s argument that “proper accessi-
bility occurred as soon as anyone hypothetically could have
reverse-engineered the TSL2560,” the district court ruled
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 11
that “the relevant inquiry for proper accessibility is what
the misappropriator did,” rather than “what the misappro-
priator or other parties could have done.” Disgorgement
Determination, at 24–25 (citing K & G Oil Tool & Service
Co. v. G & G Fishing Tool Service, 314 S.W.2d 782, 788
(Tex. 1958)). That ruling, we conclude, is inconsistent with
governing law.
“Under Texas law, information that is generally known
or readily available by independent investigation is not se-
cret for purposes of trade secrecy.” Tewari De-Ox Systems,
Inc. v. Mountain States/Rosen, L.L.C., 637 F.3d 604, 612
(5th Cir. 2011) (emphasis added); Zoecon Industries v.
American Stockman Tag Co., 713 F.2d 1174, 1179 (5th Cir.
1983) (similar); Spicer v. Tacito & Associates, Inc., 783
S.W.2d 220, 222 (Tex. App. 1989) (similar). “Information
cannot be the subject of a trade secret if it is readily ascer-
tainable without engaging in tortious behavior.” Carson
Products Co. v. Califano, 594 F.2d 453, 461 (5th Cir. 1979)
(emphasis added); see also Bonito Boats, Inc. v. Thunder
Craft Boats, Inc., 489 U.S. 141, 155 (1989) (explaining that
the public is “free to discover and exploit the trade secret
through reverse engineering of products in the public do-
main or by independent creation” (citing Kewanee Oil Co.
v. Bicron Corp., 416 U.S. 470, 490 (1974) (emphasis
added))). Under those standards, instant discovery
through naked-eye viewing is not required. The practical
focus of the inquiry reflects the need to ensure that a trade-
secret remedy is tailored to preventing or negating the un-
fair advantage derived from improper acquisition. Com-
pare, e.g., Halliburton Energy Services, Inc. v. Axis
Technologies, LLC, 444 S.W.3d 251, 257–60 (Tex. App.
2014) (granting a permanent injunction barring a party’s
use of a trade secret because there was no evidence that the
party could have developed the trade secret “without ex-
tensive and costly research and experimentation”), with
Research Equipment Co. v. C. H. Galloway & Scientific
Cages, Inc., 485 S.W.2d 953, 956 (Tex. Civ. App. 1972)
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 12
(limiting injunction where the trade secret designs were
“based on familiar mechanical means and principles that
are quite obvious to and easy to imitate by any reasonably
experienced craftsman that might see [a product contain-
ing the design]” and the products “were openly exhibited
and displayed at trade shows conducted for prospective
purchasers, and copies of drawings and plans were often
furnished by Plaintiff to prospective purchasers without
any restrictions on their use”).
Here, the evidence makes clear that Intersil, through
proper and straightforward means, could have accessed
TAOS’s trade secret by the end of February 2005. It is un-
disputed that TAOS released the TSL2560 to the public at
least by January 2005, J.A. 11186–87, 11863–64, and that
this product contained TAOS’s trade secret, J.A. 10851–54,
11022. Moreover, although there is evidence that the trade
secret would not have been instantly understood by naked-
eye inspection, J.A. 12185 (Intersil’s witness admitting
that reverse-engineering was necessary to access the trade
secret); J.A. 11468–69 (TAOS’s witness explaining the need
to conduct a “forensic analysis” to discover the trade se-
cret), the evidence is clear that reverse-engineering a prod-
uct is a common, pervasive industry practice that could
have been done in roughly a week, J.A. 10850, J.A. 10912–
13 (TAOS’s former CEO explaining that reverse-engineer-
ing a competitor’s product is so common that it has a name:
“design by Polaroid”); J.A. 11647 (TAOS’s expert agreeing
that Intersil could have reverse-engineered the TSL2560 in
six days). In these circumstances, and with the parties
framing the dispute as either February 2005 or January
2006, the record establishes February 2005 as the correct
answer to the correct legal question—February 28, 2005, if
more precision is needed. See Oral Arg. at 1:52–2:02.
B
The district court next made the needed finding about
the proper length of a “head-start period”—the period of
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 13
time “it would have taken Intersil, after Intersil’s permis-
sible discovery of the photodiode structure, to recreate that
structure in its own products.” TAOS 2018, at 1317 (citing
Research Equipment, 485 S.W.2d at 956). The district
court found 26 months to be the proper period. Disgorge-
ment Determination, at 30–36. Intersil now argues for a
duration of at most 7 months, Intersil’s Opening Br. at 34–
37, having suggested 22 months during the previous ap-
peal, TAOS 2018, at 1318. TAOS defends the district
court’s determination. TAOS’s Response Br. at 44–57. We
affirm the district court’s determination.
The inquiry into a proper “head-start period” is a prac-
tical inquiry focused on ensuring that one who prematurely
used secret information gains no unfair advantage in the
competitive marketplace—no “‘head start’ on the competi-
tion”—from that premature use. See TAOS 2018, at 1317–
18. The Texas Supreme Court long ago made clear that the
period to be identified is the period of the misappropriator’s
“marketing advantage or head start as compared to the
[plaintiff] or any manufacturer or processor” who properly
got the information. Hyde, 314 S.W.2d at 773; see id. at
778 (stressing focus on “economic equality”); see also Halli-
burton Energy, 444 S.W.3d at 257–60 (explaining that a
competitive advantage is to be evaluated in the context of
the industry and how a competitor could have properly ob-
tained the advantage); Garth v. Staktek Corp., 876 S.W.2d
545, 549 (Tex. App. 1994); Elcor Chemical Corp. v. Agri-
Sul, Inc., 494 S.W.2d 204, 212 (Tex. Civ. App. 1973); Bryan
v. Kershaw, 366 F.2d 497, 500 (5th Cir. 1966). The inquiry
in this context reflects the “fundamental principle of cor-
rective remedies that is used throughout the law”: Restore
the parties to the position they would have occupied in the
absence of the wrong. Pirkl v. Wilkie, 906 F.3d 1371, 1378
(Fed. Cir. 2018) (citing cases); see Reaugh v. McCollum Ex-
ploration Co., 163 S.W.2d 620, 621 (Tex. 1942); Southwest-
ern Energy Production Co. v. Berry-Helfand, 491 S.W.3d
699, 711–12 (Tex. 2016); University Computing Co. v.
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 14
Lykes-Youngstown Corp., 504 F.2d 518, 536 (5th Cir. 1974).
The needed determination “depend[s] upon the facts of
each particular case.” Hyde, 314 S.W.2d at 778; see TAOS
2018, at 1318; Southwestern Energy, 491 S.W.3d at 710–
12.
We see no clear error in the district court’s finding that
the relevant duration was 26 months. The court found that
Intersil provided no evidence of “how long it would have
taken [Intersil] to realistically compete in the [ambient
light sensor] market without the benefit of [TAOS]’s tech-
nology.” Disgorgement Determination, at 30–31 (citing J.A.
12153–54, 12199, 12445, 12436 (testimony of Intersil’s ex-
perts)). The court found that 26 months was an appropri-
ate duration, citing documentary and testimonial evidence,
id. at 31–35, which showed, among other things, that In-
tersil took 26 months after its misappropriation to develop
a realistically competitive product and that it “lack[ed] . . .
relative experience in [ambient light sensor] design and de-
velopment at the time of misappropriation” and “lagged far
behind the competition at the time of misappropriation,”
id. at 31–32, 34. The district court’s finding of the time
period within which Intersil’s use of the trade secret should
be viewed as still tainted—26 months past the date of ac-
cessibility—was not clearly erroneous.
C
Given our determination that the proper accessibility
date is February 28, 2005, and our affirmance of the dis-
trict court’s determination that it would have taken 26
months for Intersil to develop a competitive product, the
“head-start” period ended on April 28, 2007. Thus, sales
that resulted from Intersil’s actions before that date are
properly treated as wrongfully made. Three issues are
raised about the application of that conclusion to the mon-
etary award for disgorgement of Intersil’s profits. Address-
ing those issues, we leave the district court’s disgorgement
award standing.
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First, Intersil argues that the district court erred in in-
cluding the profits associated with the Apple iPod Touch
“design win”—here, the necessary approval as a potential
vendor of a product—that Intersil obtained for its
ISL29003 in September 2006, i.e., before April 28, 2007.
Intersil’s Opening Br. at 37–40 (citing J.A. 11663 (“[A] de-
sign win says you passed the criteria for being included as
a vendor of a product.”)). Intersil contends that being ap-
proved as a vendor does not guarantee sales, so sales of
product units that occurred after April 28, 2007, but grew
out of the earlier design win should not have been included
in the disgorgement award. Id. We reject this contention.
The district court found that Apple’s approval of Inter-
sil as an iPod Touch vendor in September 2006 was a nec-
essary precondition to all the sales for the iPod Touch at
issue. Disgorgement Determination, at 39–41. That find-
ing is not clearly erroneous. The district court identified
ample evidence that, but for Intersil’s misappropriation,
Apple would not have approved Intersil’s product for use in
the iPod Touch in September 2006, and the sales Intersil
later made to Apple for that purpose would not have oc-
curred. Id.; see, e.g., J.A. 12448 (Intersil’s damages expert
agreeing that “if Intersil doesn’t have a chip to show to Ap-
ple, to sample to Apple, and to market, they can never get
the design win”); J.A. 11773 (TAOS’s expert explaining
that Intersil “wouldn’t have been able to get the [iPod
Touch] design win without the misappropriation because
they wouldn’t have had a product”); J.A. 11776. Intersil
has not shown that the evidence required the court to find
that Intersil would have made the at-issue sales even if it
did not get the September 2006 approval. We therefore af-
firm the inclusion in the disgorgement award of all profits
attributable to Intersil’s sales of ISL29003 units to Apple
for use in the iPod Touch.
Second, and relatedly, Intersil argues that the district
court should have determined what portion of Intersil’s
profits are attributable to trade-secret misappropriation
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 16
rather than ordering disgorgement of the entirety of Inter-
sil’s ISL29003 profits from sales to Apple for use in the iPod
Touch. Intersil’s Opening Br. at 40–41. The court, recog-
nizing that it needed to make a finding about attribution,
Disgorgement Determination, at 36–37, found that the prof-
its on all sales of ISL29003 units for this purpose were
properly attributed to the misappropriation actions Inter-
sil took before April 28, 2007, specifically the inclusion in
the offering (leading to the September 2006 approval) of
the trade secret, see id. at 37–41. That finding is not clearly
erroneous in light of the evidence. See, e.g., J.A. 10731 (ex-
plaining that TAOS’s 1:1 interleaved photodiode structure,
i.e., the trade secret, was “the entire value proposition” for
the TSL2560 product family); J.A. 11067 (TAOS’s chief
technical officer noting that the “photodiode itself was the
most important change because . . . customers wanted it for
an ambient light sensor”); J.A. 14929 (Intersil’s confirma-
tion of the value of the trade secret in its internal docu-
ments); see also TAOS 2018, at 1316 (“Both parties’ experts
testified that there was no evidence of Intersil’s independ-
ent design of that structure.”). Intersil has shown no basis
to set aside this finding for factual error or for legal error
under any cited governing Texas law.
Our conclusions on the above two challenges by Intersil
exhaust Intersil’s arguments against the $8,546,000 dis-
gorgement award. The district court found $8,546,000 to
be the amount of profits on sales of the ISL29003 for the
iPod Touch traceable to the September 2006 approval by
Apple. Disgorgement Determination, at 41–42. Intersil
makes no arguments against that award other than the
two arguments just discussed. We therefore reject Inter-
sil’s challenges to that award.
The third issue raised regarding the disgorgement
award involves TAOS’s contention that the award is too
small. Specifically, in its cross-appeal, TAOS argues that
the district court was wrong not to include in the award
Intersil’s profits from sales of the ISL29003 to Apple for use
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 17
in the iPhone 3G. TAOS’s Response Br. at 108–18. The
crux of TAOS’s argument is that Intersil achieved the iPh-
one 3G “design win” before March 2008, which was the end-
of-head-start date used by the district court based on its
finding of a secret-accessibility date of January 2006 (to
which 26 months were added). See id. But we have held
above that the proper accessibility date was February 28,
2005, which, with 26 months added, brings the end of the
head-start period to April 28, 2007. See supra § II.A, II.B.
On appeal, TAOS does not argue that any events (i.e., a
“design win”) that were necessary preconditions for Intersil
securing sales for the iPhone 3G occurred before April 28,
2007, presumably reflecting the strong evidence that the
key events for the iPhone 3G sales occurred only from Au-
gust 2007 to March 2008. See, e.g., J.A. 11237, 11701,
12014. We therefore reject the cross-appeal and affirm the
disgorgement award made by the district court.
D
The second jury (on remand) determined the amount of
exemplary damages, and it did so based on an instruction
informing the jury that Intersil had already been found to
have committed trade-secret misappropriation with mal-
ice, fraud, or gross negligence, i.e., the kind of conduct that
would allow an exemplary-damages award, but that the
jury was now to decide whether to make any such award
and, if so, in what amount. Final Jury Instructions at 7–8,
12–13, TAOS D. Ct. (Apr. 15, 2021), ECF No. 822. After
the jury awarded $64 million, the district court ruled that
the amount had to be limited to $17,092,000 (twice the dis-
gorgement award), and that was the amount awarded. Fi-
nal Judgment, at 1–2, supra § I.C. Intersil presents three
challenges to the award of exemplary damages. We reject
the challenges.
Intersil’s main argument is that a Texas statute pro-
hibits any exemplary-damages award based on a claim for
which the only other monetary award is the equitable
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 18
remedy of disgorgement. Intersil’s Opening Br. at 42–44
(relying on T EX. C IV . PRAC . & R EM . C ODE A NN. § 41.008); see
also T EX. C IV . PRAC . & REM . CODE A NN. § 41.004 (generally
allowing an award of exemplary damages “only if damages
other than nominal damages are awarded”). We reject this
argument. We conclude that, because Intersil could have
made this argument that the statute bars exemplary dam-
ages in the first appeal, but did not, it cannot make the ar-
gument now.
We have ruled: “An issue that falls within the scope of
the judgment appealed from but is not raised by the appel-
lant in its opening brief on appeal is necessarily waived.
Unless remanded by this court, all issues within the scope
of the appealed judgment are deemed incorporated within
the mandate and thus are precluded from further adjudi-
cation.” Engel Industries, Inc. v. Lockformer Co., 166 F.3d
1379, 1383 (Fed. Cir. 1999). The Fifth Circuit, for its part,
“instructs district courts to faithfully apply the ‘waiver’
doctrine by discerning whether an issue raised after a re-
mand is one that could have been, but was not, raised dur-
ing the original appeal,” for such issues are “forfeited and
may not be revisited by the district court on remand.”
United States v. Stanford, 883 F.3d 500, 514 (5th Cir. 2018)
(citing Medical Center Pharmacy v. Holder, 634 F.3d 830,
834 (5th Cir. 2011)). Those principles, which amount to the
same thing in the remand context here, serve important
systemic interests—among them, narrowing the scope of
further needed litigation and, perhaps, clarifying relevant
consequences of proffered resolutions of other issues at the
time of the first appeal and clarifying choices to be made
on remand. See, e.g., Engel, 166 F.3d at 1382–83.
Those principles apply here. When Intersil first ap-
pealed this case before us, it argued that the remedy TAOS
was seeking for trade-secret misappropriation, namely,
disgorgement of Intersil’s profits, was an equitable remedy
that had to be decided by the district judge, not the jury, as
one of the grounds for requiring a remand for a new trial
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 19
on the trade-secret remedy. Intersil also urged vacatur of
the exemplary-damages award if we ordered a new trial on
disgorgement, citing the relationship of the amounts of ex-
emplary and non-exemplary awards. See supra § I.B. We
granted that request. TAOS 2018, at 1318; id. at 1332 (de-
scribing remand). Intersil could have argued that, if we
agreed with it on the equitable character of the disgorge-
ment remedy, exemplary damages were prohibited and the
request for exemplary damages therefore should not be
part of the remand. That argument was ripe, and had it
been made, our accepting it would have changed the scope
of our judgment, narrowing the remand and, therefore, the
disputed stakes in further litigation. Intersil did not make
the argument. We hold that it therefore lost the right to
make the argument on remand and in this second appeal.
Intersil’s second argument about exemplary damages
is that the amount of exemplary damages had to be decided
by the district judge, not a jury. Intersil’s Opening Br. at
44. Intersil asserts that exemplary damages “‘cannot be
tried in isolation’ from the underlying cause of action,” id.
at 44 (quoting Lanier v. Sallas, 777 F.2d 321, 326 (5th Cir.
1985)), and that “once this Court held that disgorgement
was an issue for the judge, exemplary damages became an
issue for the judge too,” id. Those assertions, however, mis-
takenly conflate the underlying claim of trade-secret mis-
appropriation with the remedy of disgorgement. We held
in the first appeal that, on certain premises presented
there, the particular remedy presented a judge issue, even
though it was undisputed that the underlying issue of lia-
bility on the claim of trade-secret misappropriation was
properly decided by the jury. TAOS 2018, at 1318–26; see
supra § I.B. That remedy-specific holding does not extend
to the distinct remedy of exemplary damages, and Intersil
identifies no precedent or law supporting judge-only treat-
ment of exemplary damages just because a different rem-
edy must be tried by a judge. See Curtis v. Loether, 415
U.S. 189, 197–98 (1974) (characterizing exemplary
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 20
damages as a legal remedy). Lanier did not involve a judge-
jury issue; it held that a plaintiff’s acceptance of a remit-
titur on compensatory damages precluded the plaintiff
from appealing not just the award of compensatory dam-
ages award but also the denial of punitive damages. 777
F.2d at 325–26.
Intersil’s final argument about exemplary damages is
that the issues of liability for exemplary damages and the
amount of such damages are “too intertwined to be decided
by different factfinders” (here, the first jury and the sec-
ond). Intersil’s Opening Br. at 44–45. For this argument,
Intersil cites only authority for the principle that some-
times a limited retrial (of some among several issues pre-
viously tried) is unjust, a principle that depends heavily on
the facts of particular cases. Id. (citing Alabama v. Blue
Bird Body Co., 573 F.2d 309, 318 (5th Cir. 1978) (outside
retrial setting, applying related principle requiring caution
about bifurcation of trials to reverse a class certification)).
Here, Intersil has not established injustice. As recited
above, Intersil, in the first appeal, sought vacatur of the
first jury’s determination of the amount of exemplary dam-
ages, its rationale concerning only the relation of exem-
plary-damages amounts and disgorgement amounts; it did
not seek vacatur of the first jury’s determination of the
premise for some award of exemplary damages (fraud, mal-
ice, or gross negligence). That choice constitutes an agree-
ment to separate trials for liability for exemplary damages
and the amount of any such damages, and in any event, it
is confirmation that such separation is not unjust. Moreo-
ver, the second jury was expressly allowed to find that no
exemplary damages should be awarded, and Intersil has
not argued, let alone shown, that it was improperly re-
stricted in the second trial from presenting evidence to per-
suade the jury that the wrong was such that exemplary
damages should be low or even zero. In these circum-
stances, we reject Intersil’s challenge to the exemplary-
damages award for trade-secret misappropriation.
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 21
III
Intersil presents several challenges to the award of rea-
sonable-royalty damages for breach of contract. Intersil
first argues that TAOS may not recover on both the trade-
secret and contract claims because such recovery would be
a double recovery for one injury. Intersil’s Opening Br. at
45–52. Intersil next argues that TAOS may not recover on
its contract claim because TAOS failed to prove that it was
harmed by the adjudicated breach. Id. at 52–53. Intersil
then challenges two aspects of the contract award: the
amount awarded for sales of Derivative Products, which do
not include TAOS’s trade secret, id. at 54–55, and the 10-
year duration of the hypothetical-negotiation royalty pro-
posed in TAOS’s evidence, id. at 55–57. We reject these
arguments.
A
Intersil argues that TAOS’s trade-secret and contract
claims arose from the same indivisible injury—Intersil’s
use of TAOS’s confidential information, including trade se-
crets, to develop competing products—and that allowing
TAOS to recover under both claims would therefore consti-
tute an impermissible double recovery. Id. at 45–47 (citing
Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 303–
04 (Tex. 2006) (limiting plaintiffs to “one recovery for one
injury”)). We disagree.
The district court found that the recoveries on the two
claims are for non-overlapping sets of units sold by Intersil.
“[TAOS]’s misappropriation damages for ISL29003 sales
are separate wrongs from [TAOS]’s breach damages for
other product sales.” Election of Remedies Decision, at 11.
We have before us no substantial challenge to the finding
of no overlapping sales. It follows that there is no single
injury and no double recovery, because “the theories of lia-
bility arise from two separate and distinct injuries”—in
this case, sales of units of ISL29003s and sales of units of
other products—and “there has been a separate and
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 22
distinct finding of damages on both theories of liability.”
Household Credit Services, Inc. v. Driscol, 989 S.W.2d 72,
80 (Tex. App. 1998); cf. Aero Products International, Inc. v.
Intex Recreation Corp., 466 F.3d 1000, 1018–19 (Fed. Cir.
2006) (prohibiting recovery of both a royalty award and a
disgorgement award because they were “based on the same
sales of the same accused devices” (emphases added)).
TAOS is entitled to recover on each of the two theories for
distinct sales by Intersil.
B
Intersil next contends that TAOS has not proven “that
the ‘breach was a substantial factor in causing the dam-
ages.’” Intersil’s Opening Br. at 52 (quoting Jenni Rivera
Enterprises, LLC v. Latin World Entertainment Holdings,
Inc., 249 Cal. Rptr. 3d 122, 144 (Ct. App. 2019)). Its argu-
ment on this point is that the jury could not reasonably find
that TAOS met the California-law requirement of showing
that reasonable-royalty damages were reasonably foresee-
able at the time of contracting. Id. at 53 (citing Behnke v.
State Farm General Insurance Co., 127 Cal. Rptr. 3d 372,
391 (Ct. App. 2011)). We disagree.
The jury’s finding is reasonable and therefore sup-
ported by substantial evidence. In substance, the finding
is that TAOS, which took the trouble of protecting its con-
fidential information by the contract at issue, had a “rea-
sonable expectation” of compensation if Intersil used such
information in breach of the contract and a reasonable roy-
alty reflects “the license fee [Intersil] would have paid had
it not breached the agreement.” Celeritas Technologies,
Ltd. v. Rockwell International Corp., 150 F.3d 1354, 1359
(Fed. Cir. 1998) (applying California contract law); see also
AstraZeneca AB v. Apotex Corp., 782 F.3d 1324, 1334 (Fed.
Cir. 2015) (A reasonable royalty theory of damages “seeks
to compensate the [plaintiff] not for lost sales caused by the
infringement, but for its lost opportunity to obtain a rea-
sonable royalty that the [defendant] would have been
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 23
willing to pay if it had been barred from infringing.”). As
TAOS would have reasonably expected to receive compen-
sation for Intersil’s use of its confidential information, we
see no error in an award of reasonable-royalty damages.
C
Intersil presents two challenges to the amount of the
royalty award. We conclude that neither is meritorious.
First: Intersil contends that the jury could not reason-
ably have included Derivative Products in the royalty
award because some or many of those products do not phys-
ically incorporate TAOS’s trade-secret structure of “a 1:1
ratio of shielded to unshielded wells and interleaving of the
wells in that ratio.” See Intersil’s Opening Br. at 54–55
(quoting TAOS 2018, at 1313, and citing J.A. 11680–81 (ex-
plaining that “a Derivative Product does not have to in-
stantiate the exact trade secret”), J.A. 12118–19 (stating
that some of Intersil’s products do not use a “1:1 ratio” of
shielded and unshielded wells or an “interleaved” struc-
ture, in accordance with the trade secret), and J.A. 11602–
03 (stating that Intersil’s products do not use a shielded
diode “as required by the trade secret”)). But that conten-
tion relies on an unduly constricted view of the claim for
breach of the confidentiality agreement. Under California
law, a plaintiff may recover for the defendant’s breach of a
confidentiality agreement not only if the defendant wholly
incorporated the plaintiff’s contractually protected infor-
mation into its own products but also if the defendant used
the plaintiff’s confidential information in the development
or implementation of its own products. See Celeritas, 150
F.3d at 1358 (applying California contract law); cf. SiOnyx
LLC v. Hamamatsu Photonics K.K., 981 F.3d 1339, 1349
(Fed. Cir. 2020) (relying on breach of confidentiality agree-
ment under Massachusetts law where the defendant’s “de-
velopment of the accused products and entry into the
relevant markets were aided and accelerated by its im-
proper use of [the plaintiff’s] confidential information”).
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 24
Here, the jury’s finding that Intersil improperly used
TAOS’s confidential information in its development of the
Derivative Products is supported by substantial evidence.
The jury heard testimony that several of the Derivative
Products “have the same sensor structure” as the
ISL29003. J.A. 12011 (Intersil’s employee testimony); J.A.
15901 (Intersil’s internal document). And although the De-
rivative Products do not wholly incorporate TAOS’s trade-
secret structure, there is record evidence that Intersil used
TAOS’s confidential information to develop those products.
See, e.g., J.A. 15075 (Intersil’s internal email describing a
product in which “[t]he ratio of the light and dark current
cells will be one”); J.A. 12235 (Intersil’s witness explaining
that one Derivative Product’s structure is “interleaved in a
ratio of 16:16,” which is still a ratio of 1:1); J.A. 11004
(same); J.A. 11333 (same); J.A. 11526 (TAOS’s expert wit-
ness explaining that even though the Derivative Products
“replace[] the metal shield with a different type of shield-
ing, which is a red/green filter,” the Derivative Products
“all use an interleaved 1:1 ratio of the wells”); J.A. 11529
(TAOS’s expert testimony that confidential information
“such as using the elongated diode spacing” and “the size,
the shape, the length, the matching of the connection be-
tween [the diodes] or the distance between them” was “in-
corporated into various products”). On the evidence, the
jury could reasonably include the Derivative Products in
the group of sales made as a result of breach and thus
award a royalty for those sales.2
2 In an unelaborated sentence, Intersil asserts that
“nothing justifies the jury’s conclusion that Intersil would
have paid the same royalty for products that incorporated
the trade secret and products that did not.” Intersil’s
Opening Br. at 55. That sentence “do[es] not amount to a
developed argument” and is therefore insufficient to
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 25
Second: Intersil challenges the 10-year duration (start-
ing from August 2004) of the hypothetical-negotiation roy-
alty agreement that the jury may be inferred to have
adopted in making its royalty award (which matched
TAOS’s proposed royalty amount, itself based on such an
agreement), arguing that the jury could not reasonably find
that Intersil would have agreed to a 10-year license. Inter-
sil’s Opening Br. at 55–57; see J.A. 11810–11. Intersil
points to two reasons such a finding would not be reasona-
ble—first, at the time of the hypothetical agreement, Inter-
sil already knew that TAOS would release a product
publicizing its trade secret within a few months, id. at 55–
56 (citing J.A. 11862–68); and second, under the confiden-
tiality agreement’s terms, “Intersil knew it would be free to
use any confidential information in three years,” id. at 56;
see J.A. 14924 ¶ 6 (“Our agreement expressed in this letter
shall expressly survive until the third anniversary of the
date of this letter agreement.”). We reject this challenge.
What royalty arrangement Intersil would have agreed
to in the hypothetical negotiation presents a factual ques-
tion, and the jury’s answer is a reasonable one (if not the
only reasonable one). The jury heard testimony that Inter-
sil would have agreed to the 10-year term to secure, among
other things, the benefit of “entering the market sooner.”
J.A. 11806; see J.A. 11805–08 (TAOS’s witness testimony
explaining why Intersil would have agreed to a 10-year li-
cense for the benefit of immediately being able to use the
confidential information); J.A. 12419 (TAOS’s expert ex-
plaining that “the market was moving so quickly” that had
Intersil waited for the agreement to expire, the confidential
information disclosed under the parties’ agreement would
present a same-rate challenge. SmithKline Beecham Corp.
v. Apotex Corp., 439 F.3d 1312, 1320 (Fed. Cir. 2006); see
id. at 1319–20; see also, e.g., Agile Defense, Inc. v. United
States, 959 F.3d 1379, 1384 n.* (Fed. Cir. 2020).
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 26
not have rendered Intersil a competitive threat). The jury
was also shown evidence that a license agreement of 10
years would have been reasonable because ambient light
sensors have a product life cycle of 5–10 years and because
Texas Instruments had a 10-year licensing agreement with
TAOS. J.A. 11805–06 (TAOS’s witness testimony). We
conclude that the jury’s royalty finding is supported by sub-
stantial evidence.
IV
Intersil argues that the district court erred in deter-
mining that the confidentiality agreement authorized at-
torneys’ fees for work in pressing the claim of breach of
contract. Intersil’s Opening Br. at 57–59. We reject this
argument and therefore affirm the award of such fees.
The parties’ confidentiality agreement states that it is
governed by California law, J.A. 14924 ¶ 12, and under
California law, the default rule is that attorneys’ fees are
not recoverable, Reynolds Metals Co. v. Alperson, 599 P.2d
83, 85 (Cal. 1979). For a contract claim, the default rule
applies unless, as relevant here, the contract specifically
provides for the recovery of fees and costs incurred to en-
force the contract. Id.; C AL. C IV . C ODE § 1717(a). Here,
TAOS relies, for contractual authorization of fees, on the
confidentiality agreement’s indemnity clause, J.A. 14924
¶ 7, which recites:
Each of us will indemnify and hold harmless the
other against any and all damage, losses or liability
(including reasonable attorneys’ fees) suffered by
the other as a result of any breach of the represen-
tations, warranties, and agreements set forth
herein.
Generally, an indemnity clause “relates to third party
claims, not attorney[s’] fees incurred in a breach of contract
action between the parties to the indemnity agreement it-
self.” Alki Partners, LP v. DB Fund Services, LLC, 209 Cal.
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 27
Rptr. 3d 151, 171 (Ct. App. 2016) (citing Carr Business En-
terprises, Inc. v. City of Chowchilla, 82 Cal. Rptr. 3d 128,
132 (Ct. App. 2008)). “The court will not infer that the par-
ties intended an indemnification provision to cover attor-
ney fees between the parties if the provision does not
specifically provide for attorney[s’] fees in an action on the
contract.” Id. (citations and internal quotation marks omit-
ted). Nevertheless, “[a]lthough indemnity generally re-
lates to third party claims, this general rule does not apply
if the parties to a contract use the term ‘indemnity’ to in-
clude direct liability as well as third party liability.”
Zalkind v. Ceradyne, Inc., 124 Cal. Rptr. 3d 105, 113–14
(Ct. App. 2011) (citations and internal quotation marks
omitted). And language in an indemnity clause that pro-
vides for attorneys’ fees “on account of any breach of the
aforesaid obligations and covenants, and any other provi-
sion or covenant” may entitle a prevailing party to attor-
neys’ fees in actions brought against a counterparty for
breach of contract. Continental Heller Corp. v. Amtech Me-
chanical Services, Inc., 61 Cal. Rptr. 2d 668, 673 (Ct. App.
1997) (emphasis omitted).
Here, we agree with the district court that the confi-
dentiality agreement provides for attorneys’ fees. The in-
demnity clause expressly states that the parties will “hold
harmless the other against any and all damage, losses or
liability (including reasonable attorneys’ fees) suffered by
the other as a result of any breach of the representations,
warranties, and agreements set forth herein.” J.A. 14924
¶ 7 (emphases added). That language indicates that it en-
compasses direct liability claims between the parties, so a
harmed contract party—in this case, TAOS—may rely on
it to recover fees. We therefore affirm the district court’s
award of attorneys’ fees.
V
Prejudgment interest on monetary recoveries on state-
law claims in federal court is governed by the claim-
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 28
supplying State’s law. Hall v. White, Getgey, Meyer Co.,
LPA, 465 F.3d 587, 595 (5th Cir. 2006). Prejudgment in-
terest on the trade-secret award is thus governed by Texas
law, and prejudgment interest on the contract award is
governed by California law. “We review the district court’s
award of prejudgment interest for an abuse of discretion.”
DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245,
1262–63 (Fed. Cir. 2014) (citing Telcordia Technologies,
Inc. v. Cisco Systems, Inc., 612 F.3d 1365, 1377 (Fed. Cir.
2010), and General Motors Corp. v. Devex Corp., 461 U.S.
648, 657 (1983)); see also CenterPoint Energy Houston Elec-
tric LLC v. Harris County Toll Road Authority, 436 F.3d
541, 550 (5th Cir. 2006) (same standard in Fifth Circuit).
A district court abuses its discretion when it bases its
award on “clearly erroneous factual findings, legal error, or
a manifest error of judgment.” King Instruments Corp. v.
Perego, 65 F.3d 941, 952 (Fed. Cir. 1995).
The district court awarded prejudgment interest on
both the trade-secret and contract claims. Prejudgment In-
terest Determination, at 7–12. Intersil contends that the
district court awarded too much interest—specifically, that
the court abused its discretion in starting its interest-ac-
crual computation for all Intersil sales at issue on Novem-
ber 25, 2008, when TAOS filed suit. Intersil’s Opening Br.
at 59–61. Intersil argues that some sales for which either
a disgorgement (trade-secret) or reasonable-royalty (con-
tract) award was made occurred after that date and TAOS
“could not have been due disgorged profits or a reasonable
royalty for sales that had yet to occur.” Id. at 60.
It is undisputed that some of the sales covered by either
the disgorgement or reasonable-royalty award occurred on
or before the complaint-filing date of November 25, 2008.
See J.A. 15814–15, 15870–71 (Intersil’s product sales rec-
ords). For such sales, the starting date for prejudgment
interest is not in dispute before us. That date is November
25, 2008. It is also undisputed before us that all sales at
issue here predated June 3, 2014, when the hypothetical
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 29
10-year licensing agreement between the parties would
have expired. TAOS’s expert so testified about the sales
covered by the contract award, J.A. 11810, and we have not
been shown that any sales covered by the trade-secret
award occurred later. There thus is no dispute that TAOS
is owed prejudgment interest from at least June 3, 2014,
until the judgment date of December 14, 2021, for all the
sales covered by either the disgorgement or reasonable-roy-
alty award (all made before June 3, 2014); in any event, we
see no substantial argument for challenging interest from
June 3, 2014. What is disputed is when prejudgment in-
terest began to accrue for the sales (covered by either the
disgorgement or reasonable-royalty award) made after No-
vember 25, 2008 (but before June 3, 2014, if, as appears, all
at-issue sales occurred before that date).
For sales covered by the contract claim, C AL. C IV . C ODE
§ 3287(a) provides, with inapplicable exceptions, that “[a]
person who is entitled to recover damages certain, or capa-
ble of being made certain by calculation, and the right to
recover which is vested in the person upon a particular day,
is entitled also to recover interest thereon from that day,”
and § 3287(b) allows recovery of interest on an “unliqui-
dated” contract claim from “a date prior to the entry of
judgment as the court may, in its discretion, fix, but in no
event earlier than the date the action was filed.” Those
provisions certainly allowed the district court to award pre-
judgment interest on the contract claim here, from no ear-
lier than November 25, 2008. But it is a separate question
whether the district court could soundly exercise discretion
to go back all the way to that date even for events that had
not yet occurred. Subsection (a) suggests that prejudgment
interest cannot begin to accrue until a loss-causing event—
in this case, a sale of a unit of a specific Intersil product—
occurs, as no right to recover for that event is vested until
then. And cases offer reinforcement for the common-sense
view that interest cannot accrue for monetary relief for an
event until the event triggering the monetary relief has
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AMS -OSRAM USA INC. v. RENESAS ELECTRONICS AMERICA, INC. 30
occurred. See, e.g., Lewis C. Nelson & Sons, Inc. v. Clovis
Unified School District, 108 Cal. Rptr. 2d 715, 718–21 (Ct.
App. 2001); A & M Produce Co. v. FMC Corp., 186 Cal.
Rptr. 114, 128 (Ct. App. 1982); Stinnett v. Damson Oil
Corp., 813 F.2d 1394, 1398 (9th Cir. 1987) (citing U.S.
Dominator, Inc. v. Factory Ship Robert E. Resoff, 768 F.2d
1099, 1106 (9th Cir. 1985)). Although the court has discre-
tion about the starting date for prejudgment interest, as
the district court recognized, Prejudgment Interest Deter-
mination, at 11, a California decision cited by the district
court, id., explains that “[j]udicial discretion must be
guided and controlled by fixed legal principles” and “exer-
cised impartially toward the end of substantial justice in
accord with the spirit of the law,” George v. Double-D
Foods, Inc., 201 Cal. Rptr. 870, 879 (Ct. App. 1984) (dis-
cussing § 3287(b)).
A similar analysis applies to prejudgment interest on
the award for disgorgement of profits on sales that occurred
after the complaint in this case was filed. The district court
was certainly permitted, perhaps even required, to award
prejudgment interest on the trade-secret claim. Prejudg-
ment Interest Determination, at 7–8 (discussing Texas law).
But relevant cases suggest that interest cannot accrue for
a recovery-triggering event until the event has occurred.
See, e.g., Concorde Limousines, Inc. v. Moloney Coachbuild-
ers, Inc., 835 F.2d 541, 548–49 (5th Cir. 1987); Matthews v.
DeSoto, 721 S.W.2d 286, 287 (Tex. 1986); Cavnar v. Quality
Control Parking, Inc., 696 S.W.2d 549, 551–55 (Tex. 1985)
(abrogated in part on other grounds by Matthews).
We vacate the district court’s awards of prejudgment
interest and remand the case to the district court for fur-
ther consideration of this issue. We do not prejudge the
outcome of such consideration. Further legal analysis of
the case law just discussed may be warranted. In addition,
consideration of practicalities is warranted—e.g., how easy
it is to identify dates of recovery-triggering sales during the
disputed period of November 25, 2008, to June 3, 2014, and
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to fashion calculation methods at a justifiable level of gran-
ularity. Cf. Cavnar, 696 S.W.2d at 555 (recognizing that “a
system which would force litigants to determine precisely
when each element of a plaintiff’s damage award was in-
curred would impose an onerous burden on both the trial
bench and bar”). TAOS, seeking prejudgment interest, has
the burden of providing a practical method of performing a
proper calculation of prejudgment interest. See Lakin v.
Watkins Associated Industries, 863 P.2d 179, 189 (Cal.
1993); Cresthaven Nursing Residence v. Freeman, 134
S.W.3d 214, 223 (Tex. App. 2003). As noted, there is no
basis for disturbing substantial portions of the prejudg-
ment interest award—interest on pre-complaint sales from
the date of the complaint, and interest on all sales from
June 3, 2014, to December 14, 2021. But for the disputed
sales (made after November 25, 2008, but before June 3,
2014), it is up to the district court to decide when interest
should start (between November 25, 2008, and June 3,
2014), exercising sound discretion based on consideration
of the governing legal principles, the allocation of the bur-
den of proof, and practical and other relevant constraints.
VI
For the trade-secret claim, (1) we reverse the district
court’s finding that the properly accessible date is January
30, 2006, concluding instead that the proper accessibility
date is February 28, 2005, but (2) we affirm the district
court’s determination that the relevant duration is 26
months and affirm the disgorgement award and (3) we af-
firm the exemplary-damages award. For the contract
claim, we affirm the damages award and the attorneys’ fees
award for TAOS’s work on that claim. We vacate the
awards of prejudgment interest and remand for further
proceedings in accordance with this opinion.
The parties shall bear their own costs.
REVERSED IN PART, AFFIRMED IN PART,
VACATED IN PART, AND REMANDED
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