United States Court of Appeals
for the Federal Circuit
______________________
RAYTHEON COMPANY,
Plaintiff-Appellant
v.
INDIGO SYSTEMS CORPORATION, FLIR
SYSTEMS INCORPORATED,
Defendants-Cross-Appellants
______________________
2016-1945, 2016-2050
______________________
Appeals from the United States District Court for the
Eastern District of Texas in No. 4:07-cv-00109-RAS,
Judge Richard A. Schell.
______________________
Decided: July 12, 2018
______________________
MICHAEL ROSS CUNNINGHAM, Cunningham Swaim,
LLP, Dallas, TX, argued for plaintiff-appellant. Also
represented by STEVEN DOMINIC SANFELIPPO, THOMAS C.
WRIGHT.
JOSEPH R. PALMORE, Morrison & Foerster LLP, Wash-
ington, DC, argued for defendants-cross-appellants. Also
represented by SETH W. LLOYD; MICHAEL JOSEPH COLLINS,
ROBERT MILLIMET, Brewer, Attorneys & Counselors,
Dallas, TX.
______________________
2 RAYTHEON COMPANY v. INDIGO SYSTEMS CORPORATION
Before NEWMAN, DYK, and CHEN, Circuit Judges.
CHEN, Circuit Judge.
These consolidated appeals arise from a district court
action filed by Raytheon Company (Raytheon) against
Indigo Systems Corporation and FLIR Systems (FLIR)
(collectively, Indigo) for trade secret misappropriation and
patent infringement. The patent infringement claims
were settled by the parties and dismissed. After a three-
week trial, a jury found that Indigo did not misappropri-
ate Raytheon’s trade secrets relating to the production of
infrared cameras. The district court then entered final
judgment in favor of Indigo. Raytheon appeals from the
district court’s denial of its motion for judgment as a
matter of law and motion for new trial regarding two of
the alleged trade secrets. Indigo cross-appeals from the
district court’s decision denying its motion for attorney
fees.
For the reasons that follow, we affirm the judgment of
no liability in favor of Indigo. We also affirm the district
court’s denial of attorney fees.
BACKGROUND
Raytheon is an industry leader in infrared technology
and produces infrared imaging equipment. Indigo is a
wholly-owned subsidiary of FLIR that also specializes in
infrared imaging equipment. The technology at issue is
embodied in infrared cameras, which enable people to see
in the dark and through obstructions such as smoke.
Inside the infrared camera are electronics to operate the
camera and process digital data collected by an infrared
detector, and a package to house the infrared detector.
The infrared detector is the “eye” of an infrared cam-
era. There are two types of infrared detectors: cooled and
uncooled. A cooled detector is housed within a “dewar,”
i.e., a detector package, which is integrated into a detector
RAYTHEON COMPANY v. INDIGO SYSTEMS CORPORATION 3
dewar cooler assembly. An uncooled detector is housed
within a vacuum detector package assembly. To operate
properly, cooled detectors must be cooled to a subcryogen-
ic temperature. In contrast, uncooled detectors operate at
an atmospheric ambient temperature. Cooled detectors
are both more expensive and more sensitive than un-
cooled detectors. Whether cooled or uncooled, infrared
detectors must be maintained in a vacuum environment
to work properly.
Indigo was founded in 1996 by four individuals, in-
cluding three former Raytheon employees. In 2000,
Indigo obtained an investment by Northrup Grumman to
enter the infrared imaging market. By late 2000, Indigo
was manufacturing and selling its own infrared cameras.
In 2007, Raytheon filed suit against Indigo in the
Eastern District of Texas, alleging patent infringement as
well as trade secret misappropriation under both Califor-
nia and Texas law. J.A. 122–33. For the trade secrets
claims, Raytheon alleged that Indigo misappropriated
Raytheon’s trade secrets through hiring former Raytheon
employees. J.A. 125.
The district court granted summary judgment to Indi-
go in 2009, finding that Raytheon’s trade secrets claims
were time-barred. J.A. 294–311. Indigo then moved for
attorney fees under the Texas Theft Liability Act (TTLA).
TEX. CIV. PRAC. & REM. CODE § 134.001–005; J.A. 312–94.
The district court denied the motion on the ground that
Indigo had not pleaded for attorney fees in its answer.
J.A. 414–16. The parties then settled Raytheon’s patent
claims, and the district court entered final judgment,
dismissing the patent claims with prejudice. J.A. 417,
11566.
The parties cross-appealed—Raytheon from the grant
of summary judgment and Indigo from the denial of fees.
This court reversed the district court’s grant of summary
judgment, reasoning that there were factual questions
4 RAYTHEON COMPANY v. INDIGO SYSTEMS CORPORATION
regarding when Raytheon should have become aware of
its misappropriation cause of action. Raytheon Co. v.
Indigo Sys. Corp., 688 F.3d 1311, 1318–19 (Fed. Cir.
2012). We also vacated the district court’s order denying
Indigo’s motion for attorney fees. Id. at 1313 n.1. We
noted, however, that the district court’s reliance on the
Supreme Court’s decisions in Ashcroft v. Iqbal, 556 U.S.
662 (2009), and Bell Atlantic Corp. v. Twombly, 550 U.S.
544 (2007), to support its conclusion, was misplaced.
Raytheon, 688 F.3d at 1313 n.1. After we remanded the
case to the district court for further proceedings, id. at
1319, Raytheon amended its complaint, asserting its
trade secret misappropriation claim only under California
law and not Texas law, J.A. 432–49.
Trial began in 2014. Raytheon contended that Indigo
had misappropriated 31 purported trade secrets belonging
to Raytheon. J.A. 4–5. The jury ruled in Indigo’s favor on
all 31 alleged trade secrets.
Following the verdict, Raytheon renewed its motion
for judgment as a matter of law, contending that it had
conclusively established misappropriation of two specific
trade secrets and that judgment should be entered in its
favor, notwithstanding the jury’s verdict. J.A. 881–909.
The two trade secrets related to Raytheon’s method and
use of a specific sequential vacuum baking procedure
(Trade Secret 14), and its process for in situ solder sealing
package assemblies (Trade Secret 30). Although the jury
found that both of these processes were trade secrets, it
concluded that Indigo had not misappropriated either of
them. J.A. 4–8, 10. Indigo filed its own renewed motion
for judgment as a matter of law, contending that the
evidence failed to demonstrate that alleged Trade Secrets
14 and 30 are truly trade secrets. J.A. 737–53. The
district court denied both parties’ motions. J.A. 20–23.
Indigo also filed an amended motion for attorney fees
under the TTLA. J.A. 680–81. Indigo argued that it
RAYTHEON COMPANY v. INDIGO SYSTEMS CORPORATION 5
qualified as a prevailing party under the TTLA because
Raytheon had withdrawn its TTLA claim to avoid an
unfavorable determination on the merits, i.e., an adverse
choice-of-law ruling that California law, rather than
Texas law, governed Raytheon’s misappropriation claims.
J.A. 693–97. In denying Indigo’s motion, the district court
observed that Raytheon’s continued pursuit of its misap-
propriation claims under California law established that
Raytheon’s withdrawal of its TTLA claim was not moti-
vated by a desire to avoid an unfavorable ruling on the
merits. J.A. 28.
STANDARDS OF REVIEW
This court reviews denials of motions for judgment as
a matter of law and new trial under the law of the region-
al circuit where an appeal would otherwise lie. See The-
rasense, Inc. v. Becton, Dickinson & Co., 593 F.3d 1325,
1330 (Fed. Cir. 2010). Denials of motions for attorney fees
under state law are reviewed under regional circuit
standards applying state law. See Int’l Rectifier Corp. v.
Samsung Elecs. Co., 424 F.3d 1235, 1238 (Fed. Cir. 2005);
Flex-Foot, Inc. v. CRP, Inc., 238 F.3d 1362, 1365–66 (Fed.
Cir. 2001). The regional circuit here is the Fifth Circuit.
The Fifth Circuit reviews a denial of a motion for
judgment as a matter of law de novo. See Janvey v.
Romero, 817 F.3d 184, 187 (5th Cir. 2016). Judgment as a
matter of law is appropriate only where “the facts and
inferences point so strongly and overwhelmingly in favor
of one party that the court concludes that reasonable
jurors could not arrive at a contrary verdict.” Orion IP,
LLC v. Hyundai Motor Am., 605 F.3d 967, 973 (Fed. Cir.
2010) (applying Fifth Circuit law). The reviewing court
must “draw all reasonable inferences and resolve all
credibility determinations in the light most favorable” to
the jury’s verdict. Power-One, Inc. v. Artesyn Techs., Inc.,
599 F.3d 1343, 1350–51 (Fed. Cir. 2010) (applying Fifth
Circuit law). We affirm a district court’s denial of judg-
6 RAYTHEON COMPANY v. INDIGO SYSTEMS CORPORATION
ment as a matter of law when there was substantial
evidence to support the jury’s verdict. Id. at 1350.
The Fifth Circuit reviews a decision to grant or deny a
motion for a new trial for abuse of discretion. Foradori v.
Harris, 523 F.3d 477, 503–04 (5th Cir. 2008). The appel-
late court’s “review of the denial of a new trial motion is
more limited than when one is granted.” Whitehead v.
Food Max of Miss., Inc., 163 F.3d 265, 269 (5th Cir. 1998).
Where a motion for a new trial is based on insufficiency of
the evidence, a district court abuses its discretion in
denying that motion only if the appellant makes a “clear
showing” of “an absolute absence of evidence to support
the jury’s verdict.” Id. Thus, in that context, the stand-
ard of review is actually “even more deferential than [the
court of appeals’] review of the denial of a motion for
judgment as a matter of law.” Hidden Oaks Ltd. v. City of
Austin, 138 F.3d 1036, 1049 (5th Cir. 1998).
The standard of review in the Fifth Circuit for a dis-
trict court’s denial of attorney fees is abuse of discretion.
See Batton v. IRS, 718 F.3d 522, 525 (5th Cir. 2013). The
appellate court reviews de novo the legal question of a
party’s eligibility to recover attorney fees under a statute.
Id.; Texas v. Interstate Commerce Comm’n, 935 F.2d 728,
730 (5th Cir. 1991).
DISCUSSION
The district court entered final judgment in favor of
Indigo on March 31, 2016. Raytheon appealed on April
29, 2016, and Indigo timely cross-appealed on May 11,
2016. We have jurisdiction under 28 U.S.C. § 1295(a)(1)
(2012). Although the patent claims that gave rise to
jurisdiction under 28 U.S.C. § 1338 were settled and
dismissed with prejudice, “the path of an appeal is deter-
mined by the basis of jurisdiction in the district court, and
is not controlled by the substance of the issues that are
appealed.” Rothe Dev. Corp. v. Dep’t of Def., 545 F.3d
1023, 1034 (Fed. Cir. 2008) (internal quotation marks and
RAYTHEON COMPANY v. INDIGO SYSTEMS CORPORATION 7
alterations omitted). Where a patent claim is joined with
a state-law claim in the complaint, we have jurisdiction
over the entire appeal of the final judgment even where,
as here, the patent claims have been dismissed with
prejudice. See Chamberlain Grp., Inc. v. Skylink Techs.,
Inc., 381 F.3d 1178, 1190 (Fed. Cir. 2004) (holding that
this court “retain[s] appellate jurisdiction over all pendent
claims in the complaint” where the patent claims were
dismissed with prejudice below).
The principal issues on appeal are: (1) whether the ju-
ry’s verdict that Indigo did not misappropriate Raytheon’s
Trade Secrets 14 and 30 was supported by substantial
evidence; (2) whether the district court abused its discre-
tion in denying Raytheon’s motion for a new trial; and
(3) whether the district court abused its discretion in
denying Indigo’s motion for attorney fees under the TTLA.
I. Trade Secret 14 Misappropriation Claim
The parties agree that California law governs Raythe-
on’s trade secret misappropriation claim. To prevail on its
claim under the California Uniform Trade Secrets Act
(CUTSA), Raytheon was required to prove, among other
things: (1) it owned a trade secret; and (2) Indigo misap-
propriated the trade secret, either by acquisition, use, or
disclosure. See Sargent Fletcher, Inc. v. Able Corp., 3 Cal.
Rptr. 3d 279, 283 (Ct. App. 2003); see also MedioStream,
Inc. v. Microsoft Corp., 869 F. Supp. 2d 1095, 1114 (N.D.
Cal. 2012).
Under California law, a trade secret must
“(1) [d]erive[ ] independent economic value, actual or
potential, from not being generally known to the public or
to other persons who can obtain economic value from its
disclosure or use; and (2) [be] the subject of efforts that
are reasonable under the circumstances to maintain its
secrecy.” CAL. CIV. CODE § 3426.1(d). Thus, information
that is generally known to the public cannot qualify as a
trade secret; nor can it form the basis for a misappropria-
8 RAYTHEON COMPANY v. INDIGO SYSTEMS CORPORATION
tion claim. See Ultimax Cement Mfg. Corp. v. CTS Ce-
ment Mfg. Corp., 587 F.3d 1339, 1355 (Fed. Cir. 2009)
(applying California law).
A defendant misappropriates a trade secret if it ac-
quires, discloses, or uses a trade secret. “Misappropria-
tion” is defined as:
(1) Acquisition of a trade secret of another by a
person who knows or has reason to know that the
trade secret was acquired by improper means; or
(2) Disclosure or use of a trade secret of another
without express or implied consent by a person
who:
(A) Used improper means to acquire
knowledge of the trade secret; or
(B) At the time of disclosure or use, knew
or had reason to know that his or her
knowledge of the trade secret was: (i) De-
rived from or through a person who had
utilized improper means to acquire it; (ii)
Acquired under circumstances giving rise
to a duty to maintain its secrecy or limit
its use; or (iii) Derived from or through a
person who owed a duty to the person
seeking relief to maintain its secrecy or
limit its use; or
(C) Before a material change of his or her
position, knew or had reason to know that
it was a trade secret and that knowledge
of it had been acquired by accident or mis-
take.
CAL. CIV. CODE § 3426.1(b).
The CUTSA defines the term “improper means” to in-
clude “theft, bribery, misrepresentation, breach or in-
ducement of a breach of duty to maintain secrecy, or
RAYTHEON COMPANY v. INDIGO SYSTEMS CORPORATION 9
espionage through electronic or other means.”
Id. § 3426.1(a). Reverse engineering and independent
derivation do not qualify as improper means. Id.
A. Scope of Trade Secret 14
As an initial matter, the parties dispute on appeal the
scope of Trade Secret 14 as it was presented to the jury. 1
Raytheon asserts that Trade Secret 14 is “its method and
use of a sequential vacuum bake during the manufactur-
ing process,” consisting of “a sequence of cascading bakes,
including a piece part bake, a subassembly bake, and then
a final bake.” Appellant Br. 25. For support, Raytheon
relies on testimony from several witnesses, including its
engineer, Stephen Black. J.A. 7690–91. Mr. Black ex-
plained that “the exact sequence of bakes is somewhat
product dependent” and that the trade secret is “a se-
quence of cascading bakes.” Id. at 7691.
Indigo responds that the concept of sequential vacu-
um baking had been well known and widely used to
enhance vacuum life of a dewar. It asserts that the goal
of outgassing (to remove gasses before sealing the dewar)
had been commonly known and that companies have
performed sequential (e.g., piece-part, subassembly, and
then final) vacuum baking since at least 1996. J.A. 9727–
29. Indigo also presented published articles disclosing
sequential vacuum baking to enhance vacuum life. J.A.
9736, 11853–95. Thus, Indigo argues that the scope of
Trade Secret 14 refers not to sequential baking in general,
but Raytheon’s specific baking recipes. It contends that
the trade secret is limited to Raytheon’s method of baking
subassemblies of components and Raytheon’s derivation
1 Neither party asked the district court to explicitly
define the contours of the trade secrets before sending the
misappropriation inquiry to the jury.
10 RAYTHEON COMPANY v. INDIGO SYSTEMS CORPORATION
and selection of specific temperature ranges for specific
materials and components.
The record does not reflect a clear definition of Trade
Secret 14, but the undisputed evidence demonstrates that
the trade secret is considerably narrower than Raytheon’s
proffered concept of a sequential vacuum bake. Such an
asserted trade secret would cover information clearly in
the public domain; Raytheon bore the burden of defining
its trade secret with specificity. Brescia v. Angelin, 90
Cal. Rptr. 3d 842, 850–51 (Ct. App. 2009) (“[T]he burden
on the trade secret claimant is to provide a level of detail
adequate to distinguish the subject information from
general knowledge or knowledge of skilled persons in the
field.”); see MAI Sys. Corp. v. Peak Comput., Inc., 991 F.2d
511, 522 (9th Cir. 1993) (“[A] plaintiff who seeks relief for
misappropriation of trade secrets must identify the trade
secrets and carry the burden of showing that they exist.”);
Arco Indus. Corp. v. Chemcast Corp., 633 F.2d 435, 441–
43 (6th Cir. 1980) (holding that plaintiff could not broaden
a trade secret to cover plaintiff’s “layout” or “approach”
when plaintiff had claimed below that the detailed, indi-
vidual steps of its process were the trade secret).
At trial, Raytheon’s own witness, Mr. Black, acknowl-
edged that vacuum baking of subassemblies at the high-
est temperature for the longest time had been reasonably
well known, and that one would only “get into the trade
secret” when it comes to identifying what temperature an
individual part can withstand. J.A. 7373–74. Raytheon’s
counsel also explained that Raytheon was “talking specif-
ics” in referring to its trade secret and “not talking about
a general recipe.” J.A. 6816.
According to Raytheon’s own experts, the trade secret
is “the use and details for vacuum baking pieces and
subassemblies of dewars for enhanced vacuum perfor-
mance and long product life” with “specific methods,
timing, and temperature for optimization of the process.”
RAYTHEON COMPANY v. INDIGO SYSTEMS CORPORATION 11
J.A. 10390. After having presented the jury with narrow-
er definitions of its Trade Secret 14, i.e., by referring to
Raytheon’s specific sequential bake recipes, Raytheon
cannot now try to broaden these definitions on appeal,
particularly in view of the evidence that using a sequence
of vacuum bakes was a previously-known concept.
B. The Jury Reasonably Found that Indigo did not Misap-
propriate Trade Secret 14
Raytheon’s theory of misappropriation is that: (1) An-
drew Sharpe, a former Raytheon employee who left to
work at Indigo, shared Raytheon’s sequential vacuum
bake recipes with Indigo; that (2) Indigo then used those
recipes to develop its own recipes; and that (3) Indigo
disclosed Raytheon’s recipes to FLIR after the 2004
acquisition by FLIR. Because substantial evidence sup-
ports the jury’s conclusion that Indigo did not misappro-
priate Trade Secret 14, Raytheon has not established that
it was entitled to judgment as a matter of law.
During trial, Mr. Sharpe expressly denied taking Ray-
theon’s specific recipes from Raytheon or otherwise mis-
appropriating them. J.A. 6925–27, 6998. If, as Mr.
Sharpe testified, Indigo did not acquire the trade secret, it
necessarily could not have used or disclosed it. See Silva-
co Data Sys. v. Intel Corp., 109 Cal. Rptr. 3d 27, 45 (Ct.
App. 2010) (defendants cannot have “used” plaintiff’s
trade secret unless defendants gained knowledge of the
secret).
Evidence at trial also showed that Indigo employees
(Sharpe and Matson) independently developed Indigo’s
particularized sequential vacuum baking recipes without
using Raytheon’s. J.A. 9001–03, 9064–67. Mr. Sharpe
testified to learning about vacuum technology during his
time at Electropacific Inc. (where he worked before joining
Raytheon). J.A. 6916. Mr. Sharpe’s process development
notes showed that he simply adhered to the well-known
practice of baking different parts of the assembly at the
12 RAYTHEON COMPANY v. INDIGO SYSTEMS CORPORATION
highest possible temperature for the longest possible
period of time. J.A. 11230. He also developed Indigo’s
own recipes through experimentation and in consultation
with vendors of materials. J.A. 6992, 11230.
Further, the recipes of Indigo are significantly differ-
ent from those of Raytheon. As Mr. Sharpe testified,
Raytheon and Indigo do not use the same sequence vacu-
um bake recipes. J.A. 6992. Indigo’s technical expert
testified about the substantial differences. J.A. 9730. For
example, Indigo’s recipes, having eleven methods as
compared to Raytheon’s four, are “far more specific,” and
the recipes differ in time, temperature, and pressure. Id.
The expert also stated that Indigo uses pressure in its
recipes that is “on an order of magnitude” higher than
that used by Raytheon. Id. Accordingly, the district court
properly denied Raytheon’s JMOL motion because a
reasonable juror could have found that Raytheon’s trade
secret (a set of specific bake recipes) was never disclosed
to or used by Indigo.
Raytheon argues that Indigo must have misappropri-
ated its trade secret because Indigo placed Mr. Sharpe in
a position to do the same kind of work he had done at
Raytheon (i.e., cooled packaging process) and did so after
initially telling Mr. Sharpe he would work in a different
area (i.e., uncooled packaging process). But this does not
provide the full picture or draw all reasonable inferences
in Indigo’s favor. Mr. Sharpe was hired to set up Indigo’s
vacuum packaging facility. J.A. 6850. As he explained, a
vacuum packaging facility is “independent of the type of
product”—it can be used for either cooled or uncooled
products. Id. Further, Mr. Sharpe’s assignment to set up
the manufacturing line came only after the founders
concluded that the concept of vacuum baking to enhance
vacuum life was in the public domain. J.A. 7783–84. Mr.
Sharpe also took precautionary measures by removing
himself from the design process for cooled products and by
limiting himself to the setup of the manufacturing facility
RAYTHEON COMPANY v. INDIGO SYSTEMS CORPORATION 13
for those products. J.A. 6985. Thus, a reasonable jury
could believe Mr. Sharpe’s work assignment did not show
that he had shared Raytheon’s trade secrets or that
Indigo desired that he do so.
To establish that Indigo’s bake recipes originated at
Raytheon and that Mr. Sharpe was Indigo’s source for
such information, Raytheon contends that Mr. Sharpe
admitted learning everything he knew about the sequen-
tial vacuum bake process from Raytheon. But Mr.
Sharpe’s testimony does not support such a contention.
Rather, he simply acknowledged that he learned about
infrared technology at Raytheon. J.A. 6766. But this
does not contradict his other testimony explaining that he
developed Raytheon recipes through public domain mate-
rials, consultation with vendors, and experimentation, or
that he later developed Indigo’s recipes using similar,
non-proprietary methods.
For these reasons, the jury reasonably found that In-
digo did not misappropriate Trade Secret 14, and the
district court did not err in denying Raytheon’s motion for
judgment as a matter of law regarding this claim.
II. Trade Secret 30 Misappropriation Claim
As with Trade Secret 14, Raytheon on appeal seeks to
broaden the scope of subject matter protected by Trade
Secret 30 and then to base its arguments for misappropri-
ation on that broadened definition. But this expanded
conception is contrary to how Raytheon framed its trade
secret before the jury.
A. Scope of Trade Secret 30
On appeal, Raytheon claims that Trade Secret 30 is
directed to its in situ solder seal package assembly pro-
cess, consisting of “the use of a batch process to allow for
the manufacture of multiple bolometer packages simulta-
neously in a vacuum chamber.” Appellant Br. 37; J.A.
7312–13, 7710. “In Raytheon’s trade secret process,
14 RAYTHEON COMPANY v. INDIGO SYSTEMS CORPORATION
instead of solder sealing each individual detector package,
a batch of detector packages can be solder sealed in a
single vacuum chamber at the same time.” Appellant Br.
37; J.A. 7710.
Indigo responds that Trade Secret 30 is more specific
and detailed. According to Indigo, the claimed trade
secret refers to Raytheon’s own process of solder sealing
batches of uncooled ceramic packages, and consists of the
time and temperature of each step in that process, as well
as the choice of metals and choice of solders used for
sealing the package. J.A. 7715.
As with Trade Secret 14, the record regarding the
scope of Trade Secret 30 is less than clear. But the un-
disputed evidence establishes that Raytheon was claiming
its own specific process for solder sealing package assem-
blies in situ as a trade secret, rather than something more
generic. Raytheon’s witness, Mr. Black, referred to the
trade secret as encompassing the particular time and
temperature of each step in the process, as well as the
choice of metals and solders. J.A. 7715. He also described
Raytheon’s evaluation of solder seals and metallurgy as
being part of the in situ process. J.A. 7314. This is con-
sistent with what Raytheon argued in its post-trial briefs:
“to use the in situ process recipe, one would need to know
a variety of things, including choice of metals, choice of
solders, and times and temperatures[.]” J.A. 5467. As
stated in Raytheon’s expert report, “Raytheon’s trade
secret is the method developed to reliably prepare and
perform an in situ tubeless closure on uncooled ceramic
packages. This method was developed to provide reliable
solder joints with the type of flux-less solder used com-
bined with the correct time and temperature at the cor-
rect vacuum levels.” J.A. 10426. Viewed collectively,
Raytheon’s own evidence indicates that Trade Secret 30 is
not just the manufacture of multiple bolometers simulta-
neously in a vacuum chamber; it also includes the time
RAYTHEON COMPANY v. INDIGO SYSTEMS CORPORATION 15
and temperature of each step of that manufacturing
process, as well as choice of metals and solders.
B. The Jury Reasonably Found that Indigo did not Misap-
propriate Trade Secret 30
Raytheon’s theory of misappropriation was that for-
mer Raytheon employee Carl Magoun shared Trade
Secret 30 with Indigo and used that information to create
Indigo’s in situ process. Mr. Magoun was a former man-
ager of Raytheon’s mechanical engineering department.
According to Mr. Magoun’s resume, he had experience in
the “design of vacuum processing and assembly system for
in situ dewar build and final dewar closure.” J.A. 7720–
21.
Indigo’s witnesses, however, explained that Indigo in-
dependently developed its in situ process. For example,
Indigo presented evidence showing that Paul Schweikert,
an Indigo employee who never worked at Raytheon,
independently developed Indigo’s in situ solder seal
package assembly process used to package the uncooled
infrared detectors for use in automobiles. J.A.8959–69.
Multiple witnesses testified that Mr. Schweikert was
responsible for developing Indigo’s in situ solder seal
package assembly process. J.A. 6996–97, 8959–60, 9020.
Mr. Schweikert testified that in 2002 and 2003 he en-
gaged in substantial brainstorming and experimentation
to develop Indigo’s in situ process. J.A. 8960–66. He
documented his development efforts extensively.
J.A. 8961–64. He also described his experiments in detail
to the jury, including how he chose the solder to be used
in the process and how he arranged to activate a “getter”
(i.e., a molecular sponge used to soak up gas inside the
detector package) after finally sealing the package.
J.A. 8964–65, 8967–68. When Indigo later obtained a
patent for its in situ process, Mr. Schweikert was listed as
the lead inventor. J.A. 8976, 11914–31. Notably, Mr.
Magoun was not a named inventor on the patent.
16 RAYTHEON COMPANY v. INDIGO SYSTEMS CORPORATION
Further, despite basing its misappropriation theory
for Trade Secret 30 around Mr. Magoun, Raytheon never
called him as a witness; and, no witness testified that Mr.
Magoun shared Raytheon’s Trade Secret 30 with anyone
at Indigo. The trial testimony showed instead that,
although Mr. Magoun was a project leader, his role was
principally supervisory. J.A. 9013, 9072–73. Further,
Mr. Schweikert testified that Mr. Magoun did not develop
Indigo’s in situ solder sealing process. Id. Rather, Mr.
Magoun had proposed that Indigo buy an off-the-shelf in
situ machine rather develop one internally. J.A. 9020.
That proposal was rejected and Mr. Schweikert instead
developed Indigo’s process and machine in-house.
J.A. 9020, 9749.
Drawing all reasonable inferences from the evidence
in favor of the verdict, the jury had more than a sufficient
basis to conclude that Raytheon had not proven misap-
propriation of Trade Secret 30. Because Raytheon did not
present any direct evidence that Indigo ever acquired
Trade Secret 30 and because Indigo presented substantial
evidence that it independently developed its in situ pro-
cess, we agree with the district court that the jury rea-
sonably concluded that Indigo did not acquire, use, or
disclose Trade Secret 30.
III. Raytheon’s Motion for a New Trial
As an alternative to its request for judgment as a
matter of law, Raytheon moved for a new trial, but the
district court denied this motion. J.A. 23. The denial of a
motion for new trial is reviewed for a clear abuse of dis-
cretion, and will not be reversed unless there is a com-
plete absence of evidence to support the jury’s verdict.
Rivera v. Union Pac. R.R., 378 F.3d 502, 506 (5th Cir.
2004).
Based on the above and our careful review of the en-
tire record in this case, we see no basis to set aside the
jury’s verdict for a new trial. A review of the district
RAYTHEON COMPANY v. INDIGO SYSTEMS CORPORATION 17
court’s denial of Raytheon’s new trial motion is “even
more deferential than [a] review of the denial of a motion
for judgment as a matter of law.” Hidden Oaks, 138 F.3d
at 1049. Raytheon’s failure to establish its entitlement to
judgment as a matter of law on the trade secret misap-
propriation issue also means it has failed to establish its
entitlement to a new trial. Thus, the district court did not
abuse its discretion in denying Raytheon’s alternative
motion for a new trial.
IV. Attorney Fees under TTLA
In its cross-appeal, Indigo challenges the district
court’s denial of attorney fees. Specifically, Indigo argues
that it was entitled to a mandatory award of attorney fees
under the TTLA because it “prevailed” on Raytheon’s
claim under that statute, when Raytheon voluntarily
withdrew its trade secrets claims based on Texas law and
instead pursued that claim under California law. We
disagree that Indigo is entitled to attorney fees for its
defense of the TTLA claim and affirm the district court’s
order denying such fees.
We begin by examining the statutory language of the
TTLA. The TTLA provides that “[e]ach person who
prevails in a suit under this chapter shall be awarded
court costs and reasonable and necessary attorney’s fees.”
TEX CIV. PRAC. & REM. CODE § 134.005 (b). Although the
TTLA does not expressly define “prevails,” Texas courts
have held that the phrase “prevailing party” in the TTLA
includes both a plaintiff successfully prosecuting a trade
secret theft suit and a defendant successfully defending
against one. See, e.g., Arrow Marble, LLC v. Estate of
Killion, 441 S.W.3d 702, 706 (Tex. Ct. App. 2014).
An award of attorney fees is mandatory when the
statutory requirements under the TTLA are met. Texas
courts have noted that such an award may be based on a
court decision on the merits for either party. See, e.g.,
Moak v. Huff, No. 04-11-00184-CV, 2012 WL 566140, at
18 RAYTHEON COMPANY v. INDIGO SYSTEMS CORPORATION
*10 (Tex. Ct. App. Feb. 15, 2012). “To recover fees, the
defendant must nevertheless prevail on the merits of the
claim, which one court has interpreted to mean ‘establish
[defendant] did not commit theft.’” Brinson Benefits, Inc.
v. Hooper, 501 S.W.3d 637, 642 (Tex. Ct. App. 2016)
(citing Travel Music of San Antonio, Inc. v. Douglas, No.
04-00-00757-CV, 2002 WL 1058527, at *3 (Tex. Ct. App.
May 29, 2002)).
A defendant may also claim prevailing-party status
when the plaintiff nonsuits or dismisses the claim with
prejudice. Epps v. Fowler, 351 S.W.3d 862, 868 (Tex.
2011). When a plaintiff’s claims are dismissed with
prejudice, the doctrine of res judicata prohibits the plain-
tiff from re-asserting his claims against that defendant in
a later suit. Id. at 867. In certain circumstances, howev-
er, “a defendant may be a prevailing party when a plain-
tiff nonsuits without prejudice if the trial court
determines, on the defendant’s motion, that the nonsuit
was taken to avoid an unfavorable ruling on the merits.”
Id. at 870.
Thus, to prove its entitlement to attorney fees under
the TTLA here, Indigo must establish either: (1) it actual-
ly prevailed on the merits of a TTLA claim; (2) Raytheon
dismissed the TTLA claim with prejudice; or (3) Raytheon
dismissed the TTLA claim without prejudice to avoid an
adverse ruling on the merits. The first two prongs do not
apply because only the CUTSA claim went to trial and
Raytheon dismissed the TTLA claim without prejudice.
See J.A. 714. As a result, the relevant remaining question
is: did Raytheon dismiss its TTLA claim to avoid an
adverse ruling on the merits of that claim?
After having considered the statutory language and
the relevant case law, we see no error with the district
court’s determination that the Indigo entities “are not the
prevailing parties under the Plaintiff’s TTLA claim and,
therefore, are not entitled to attorneys’ fees.” J.A. 29.
RAYTHEON COMPANY v. INDIGO SYSTEMS CORPORATION 19
Raytheon initially pleaded its trade secrets claims under
two separate state laws. After additional discovery, it
decided to pursue its trade secrets claims under the
CUTSA rather than the TTLA. Dismissing the TTLA
claim without prejudice in this context appears to repre-
sent a preference by Raytheon to pursue its trade secret
misappropriation claims under one state’s laws over
another’s. On this record, we agree with the district court
that it is far from clear that Raytheon’s focus on Califor-
nia law over Texas law was taken “to avoid an unfavora-
ble ruling on the merits.” See J.A. 28; see also Epps, 351
S.W.3d at 870.
Indigo argues that the district court erred because
Raytheon withdrew its TTLA claim to avoid an unfavora-
ble choice-of-law ruling, that such a ruling would have
been on the merits, and that the withdrawal therefore
gives rise to an attorney fees award under the TTLA. 2 To
support its position, Indigo relies on two cases: Chick
Kam Choo v. Exxon Corp., 486 U.S. 140 (1988) and
Vasquez v. Bridgestone/Firestone, Inc., 325 F.3d 665 (5th
Cir. 2003). Neither is a TTLA case.
In Chick Kam Choo, the Supreme Court held that a
federal district court that had previously dismissed claims
on forum non conveniens and choice-of-law grounds could
enjoin the plaintiffs from reasserting their Texas state
law claims in state court. 486 U.S. at 150–51. The Su-
preme Court explained that such an injunction would be
proper under the relitigation exception to the Anti-
Injunction Act because the validity of the Texas law claim
was adjudicated in the original federal action when the
district court decided that under applicable choice-of-law
2 The record contains no evidence that, at the time
Raytheon dismissed its TTLA claim without prejudice,
there was a pending choice of law determination to be
made by the district court.
20 RAYTHEON COMPANY v. INDIGO SYSTEMS CORPORATION
principles, the law of Singapore, rather than Texas,
controlled the petitioner’s suit. Id. at 150.
In Vasquez, the Fifth Circuit held that, after a federal
district court dismissed plaintiffs’ claims on forum non
conveniens grounds, the plaintiffs could be properly
enjoined from reasserting their Texas law claims in Texas
state court pursuant to the same exception to the Anti-
Injunction Act. 325 F.3d at 680. The Fifth Circuit ex-
plained that the district court’s earlier determination that
Mexican law, rather than Texas law, applied, adjudicated
the merits of plaintiff’s Texas law claims. Id. In other
words, when the federal court in the earlier action decided
that Mexican law governed the suit, as part of the forum
non conveniens analysis, it “actually adjudicated the
Texas state law claims.” Id. (“Whereas the [forum non
conveniens] dismissal did not decide the substantive
merits of plaintiffs’ claims, the court’s choice of Mexican
law did. This is somewhat counter-intuitive, given that a
choice-of-law determination is a necessary part of an
[forum non conveniens] dismissal.” (citing Piper Aircraft
Co. v. Reyno, 454 U.S. 235, 245 (1981))).
In our view, the cases upon which Indigo relies are
inapposite. First, unlike those cases, the district court
here never made a ruling on the proper choice of law for
Raytheon’s trade secrets claims. It is uncertain on this
record how the court would have ruled on such a motion.
Second, unlike the plaintiffs in Chick Kam Choo and
Vasquez, all of whom were barred from reasserting a state
law claim in state court after receiving an adverse choice
of law ruling in federal court, Raytheon is not attempting
to reassert its trade secrets claims in a second state court
action under the TTLA. Further, all parties understood
that Raytheon was going to pursue its trade secrets
claims under either California or Texas law, and Indigo
never explained why it would be an “unfavorable ruling
on the merits” for Raytheon, even assuming a choice of
law ruling was “on the merits,” to litigate its claims under
RAYTHEON COMPANY v. INDIGO SYSTEMS CORPORATION 21
California law. For example, Indigo never suggested that
Raytheon would somehow be in a better position to prove
its trade secret misappropriation claims under Texas law
as opposed to California law. As for the possibility of
receiving attorney fees under the TTLA, Indigo has not
cited any decisions holding that a choice-of-law ruling is a
ruling on the merits for purposes of awarding attorney
fees under the TTLA. Where, as here, significant uncer-
tainty looms over how the choice of law issue would have
been decided, the district court did not err in denying
Indigo’s motion for attorney fees.
CONCLUSION
For the foregoing reasons, the district court’s judg-
ment of no liability in favor of Indigo is affirmed. The
order of the district court denying attorney fees is also
affirmed.
AFFIRMED
COSTS
Each party is to bear its own costs.