No. 08-10521
plaintiff cannot recover damages without offering evidence “to show the actual profit made by [defendant].” Elcor Chem. Corp. v. Agri-Sul, Inc., 494 S.W.2d 204, 214 (Tex. Civ. App.—Dallas 1973, writ ref’d n.r.e.); see also Carbo Ceramics, Inc. v. Keefe, 166 F. App’x 714, 723 (5th Cir. 2006) (unpublished) (interpreting Texas law to permit a plaintiff to “seek damages measured by the defendant’s actual profits resulting from the use or disclosure of the trade secret”); Houston Mercantile Exch. Corp. v. Dailey Petroleum Corp., 930 S.W.2d 242, 248 (Tex. App.—Houston [14th Dist.] 1996, no writ) (finding that, as a threshold requirement to recovering damages for trade secret and unfair competition claims, “a plaintiff must produce evidence from which the jury may reasonably infer that the damages sued for have resulted from the conduct of the defendant”).
In the instant matter, MGE faces the same problems showing “actual profits resulting from the use or disclosure of the trade secret” as it did on its copyright claim. DX-37 demonstrated PMI’s total revenue, not “actual profits.” MGE has not presented evidence that provides any means of distinguishing revenue PMI gained from other sources from revenue gained through misappropriation of MGE’s trade secrets, let alone a calculation of profits from the relevant portion of revenue. MGE attempts to distinguish Elcor by arguing that DX-37 is “credible evidence of PMI’s profits,” but MGE needed to take additional steps to deduct unrelated revenue and costs from these total figures in order to demonstrate PMI’s profits related to the infringement. MGE failed to do so.
However, MGE argues that comment f to the Restatement (Third) of Unfair Competition § 45 (1995) governs damages under Texas law, and contends that it met its burden under this burden-shifting framework:
The traditional form of restitutionary relief in an action for the appropriation of a trade secret is an accounting of the defendant’s
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