Update on the Brocade Case: Court Dismisses Claims Based on Information from Settlement Discussions

Last month, I wrote about a trade-secret case in which a defendant employee, David Cheung, asked the court to order the plaintiff employer, Brocade Communications, to pay his attorney’s fees because the claims against him were frivolous.  Last Wednesday, the court agreed to dismiss the case because the only evidence Brocade had against Cheung was gleaned in settlement discussions with him, evidence which would be inadmissible at a trial under the rules of evidence.  The judge said she was “really disappointed” and “kind of shocked” when reading the briefs for the motion.  The judge left the door open for Brocade to file a claim again, but only because she would need a finding of bad faith to award attorney’s fees and costs to Cheung, and apparently she could not find bad faith (yet).  But she left the door open for such an award if Brocade filed again.  She told Cheung: “[I]f they file again, you just file a motion to transfer venue and you bring it back to me and I’ll take care of it.”

After a judicial tongue-lashing like that, I don’t expect that Brocade will be filing another claim against Cheung anytime soon.

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