Lipson Neilson Enjoys Hard Fought Victory: Federal Court Dismisses Multi-Million Dollar Trade Secret Claim Against Altair Engineering, Inc. and Key Employee

The Lipson Neilson team of Phillip E. Seltzer, C. Thomas Ludden and Samantha K. Heraud celebrated a long-sought victory in a case originally filed against their clients in 2007. After a 2014 adverse trial verdict was vacated by the trial judge, a new trial was ordered.

However, on December 13, 2017, Judge Avern Cohn granted a summary judgment motion to Defendants, Altair Engineering Inc. and a key software director, dismissing the claims brought by MSC.Software (“MSC”) for trade secret misappropriation. In his final decision, Judge Cohn found, “MSC has no admissible evidence to support its claim for damages,” and noted, “MSC concedes that its multimillion dollar damage claim is unsupported in light of the exclusion of [MSC’s expert’s] testimony and it does not challenge Altair’s reasoning.” The Judge’s decision finished with a reference to the famous T.S. Eliot poem The Hollow Men: “This is the way the world ends; Not with a bang but a whimper.”

MSC initiated the case in 2007 when it sued Altair and a number of former employees of MSC. MSC asserted sixty-three claims of misappropriation of trade secrets by Altair and its employees, along with a breach of confidentiality and non-solicitation agreements by the key employees.

With a team of lawyers at Lipson Neilson leading the charge, the Court summarily dismissed 58 trade secret misappropriation claims out of the original 63 alleged in pre-trial proceedings. In April 2014, after a two-month trial, a jury determined that three out of the remaining five trade secrets were misappropriated. The Jury awarded MSC $26.5 million in damages out of the 62 Million plus damages sought at trial.

However, on a motion to vacate that judgment brought by Lipson Neilson (working with the Boston law firm of Fish & Richardson), Judge Cohn vacated the jury award for the trade secret violations (over 26 Million) in November 2014. The opinion noted, among other things, the misconduct of MSC’s trial counsel in abusing his right to rebuttal closing argument by raising a damage theory previously barred by a prior pre-trial ruling. Finding that the argument impermissibly skewed the damage horizon in the case, the Judge ordered a new trial regarding damages for the three trade secrets the jury determined were misappropriated. However, after further discovery and expert testimony, the Judge’s ruling of December 13, 2017, resulted in summarily dismissing MSC’s trade secret claims in their entirety against Altair and its key employee.

The law firm of Fish & Richardson, Boston, MA, represented Altair during the post-judgment/new trial phase, with Lipson Neilson representing the key employees.