A sales rep who ripped off an industrial design from a major corporation loses again. But will the corporation ever collect its $1 million in damages?
An Acadiana businessman ordered to pay nearly $1 million to Siemens Water Technologies Corp. for misappropriating a proprietary industrial design has now been found liable for more than $125,000 in attorney fees after an unsuccessful appeal to the Louisiana 3rd Circuit Court of Appeal. Rubbing salt in the wound, the appeals court in early January not only ordered Jacob David and his now-defunct Vermilion Parish company, Revo Water Systems, to pay $122,000 in attorney fees to Siemens, but to pay an additional $5,000 in lawyer costs to Siemens for the appeal.
The case goes back to 2004, winding its way through two corporate purchases and name changes and ending with a jury deciding in June 2010 that David and his company had pirated Siemens' design and so-called "trade dress" - the appearance, color, logo, etc. - of a portable reverse osmosis (RO) water desalination unit used on offshore rigs to produce potable water.
In 2004, according to court documents, David signed a confidentiality agreement with Monosep Corp., which had recently acquired his employer, Pure Water Solutions. Monosep was purchased by Siemens in 2005.
David was a sales rep for Monosep and later Siemens, selling RO units to drilling companies. The RO unit he sold was developed in the late 1990s by an employee of Pure Water Solutions (later bought out by Monosep, which was in turn acquired by Siemens). According to the court record, in June 2006 David asked the designer of the unit, Jason Badeaux, to show him how the unit was constructed, telling the designer that knowledge of the product would help him perform his sales job more effectively. Badeaux consented, and two months later, armed with the knowledge of the RO unit's design and fabrication, David resigned from Siemens and two months after that formed Revo Water Systems. The company went into direct competition with Siemens in the offshore reverse osmosis business a few months later.
Fast forward to July 2008, according to the court record: Badeaux, the designer of the unit, "was contacted about a problem with a RO unit at a location he was certain no Siemens unit had been leased to. He dispatched a Siemens technician to the location. That technician verified that the unit was not built by Siemens, but by a company known as Revo Water Systems. Further investigation by Badeaux convinced him that the Revo unit was a copy of the Siemens unit."
The discovery of the Revo knock-off RO unit came on the heels of a Siemens contractor noticing a slow-down in the RO business with drilling companies - a drop-off attributable, in Siemens' eyes, to Revo ripping off its technology, mimicking its design and cutting into its market share.
The company filed suit, claiming breach of the confidentiality agreement, violation of the Uniform Trade Secrets Act and "trade dress" infringement. The case went to civil trial in June 2010, and within days a jury sided with Siemens and awarded the company nearly $1.5 million in damages. David/Revo appealed, and in October of 2011 the 3rd Circuit, while agreeing with the jury's findings in the case, reduced the award to Siemens to a tick over $928,000.
"There is a difference between, on one hand, using your skills to invent something vital, and, on the other hand, using your inside access to misappropriate technology invented by and owned by someone else," says Tim Basden, an attorney with Lafayette-based Breaud & Meyers, the firm that represents Siemens. "A jury found that Mr. David's actions were intentional and malicious."
But due to a dispute over wording in the judgment, the matter of attorney fees for the case was set aside. It wasn't until February 2013 that the trial court signed off on the attorney fees, which led to David/Revo's latest appeal and this latest loss.
Russell Stutes, a Lake Charles attorney who represented David/Revo before the appellate court, says his client hasn't decided whether to attempt a challenge of this latest ruling to the Louisiana Supreme Court, adding that although the nearly $1 million judgment against David/Revo is final, it has not been paid to Siemens. That, adds Basden, is because David transferred the company to his sister shortly after the jury ruled in Siemens' favor and, again according to Basden, has "fought efforts to enforce the judgment."
The transfer of the company, which is now called Bucket Oilfield Services and is located at the same Lake Arthur address as Revo, is the subject of a lawsuit filed by Siemens in Jeff Davis Parish seeking to revoke the transfer. Bucket Oilfield Services was formed, according to the Louisiana Secretary of State's office, in August 2010 - about two months after the jury found David/Revo liable for damages.
David did not return a phone call seeking comment for this story.