>>A San Diego Superior Court jury yesterday awarded $114 million to a dormant dot-com that claimed its trade secrets were stolen and misappropriated by a former potential merger partner.<<
internetmagic.com
>>February 2, 2002
A San Diego Superior Court jury yesterday awarded $114 million to a dormant dot-com that claimed its trade secrets were stolen and misappropriated by a former potential merger partner.
Internet Magic Inc. of San Diego, a developer of technology that allows fax transmissions over the Internet, was given the award yesterday following two days of deliberation by a jury before Judge Ronald S. Prager.
The jury awarded $12.4 million to Internet Magic for breach of confidentiality and nondisclosure agreements, $1.67 million for misappropriation of trade secrets and punitive damages of $50 million each from Netfax Inc. of Washington, D.C., and its principal shareholder, Victor Lombardi, according to Internet Magic's attorney Bob Steele.
Steele argued during the trial that Netfax learned confidential information about Internet Magic's technology during eight months of merger talks in 1997 and 1998 and later used that information against the company after merger talks broke off.
"At the time this happened, Internet Magic was in talks with venture capital firms and other investors," Steele said. "All of those ran away because of what Netfax was doing."
Steele said Internet Magic also lost substantial business because of the turmoil.
Neither Lombardi nor attorneys for Netfax could be reached for comment.
Internet Magic, which today is comprised of just two people, President Dae Suhr and inventor Bob Kulakowski, eventually sold licensing for its technology to Intel for $4 million.
"We contended that it if wasn't for this conduct, Internet Magic would have been able to sell its technology in 1998 for at least $6.2 million, and that was a very conservative estimate," Steele said. |
