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Mayo Clinic v. Elkin

United States Court of Appeals, Eighth Circuit

August 27, 2013

Mayo Clinic, Mayo Foundation for Medical Education and Research, and Cerner Corporation Plaintiffs - Appellees
v.
Peter L. Elkin, M.D. Defendant-Appellant

Unpublished

Submitted: October 15, 2012

Appeal from United States District Court for the District of Minnesota - Minneapolis

Before BYE, BEAM, and SHEPHERD, Circuit Judges.

PER CURIAM.

This case arises out of a trade secret dispute between Mayo Clinic ("Mayo") and Dr. Peter L. Elkin. A jury returned a verdict in favor of Mayo on its claims of trade secret misappropriation, conversion, breach of contract, interference with existing and prospective contractual relationships, and breach of fiduciary duty. The jury also found for Elkin on his breach-of-contract counterclaim against Mayo. Following trial, the district court issued an injunction against Elkin, requiring him to return the software at issue and to cease all use and possession thereof. The district court also ordered Elkin to pay Mayo's attorneys' fees and costs in the amount of $1, 900, 139.90. Elkin appeals the district court's exclusion of certain expert testimony at trial, entrance of jury findings, issuance of an overbroad injunction, and award of attorneys' fees. We affirm in part and reverse in part.

I

Elkin began working for Mayo in 1996 as a clinician and researcher. During his employment with Mayo, Elkin developed a version of Natural Language Processing (NLP) software for use with medical text. NLP allows computer users to complete data searches using plain language rather than Boolean logic—essentially the same technique Google employs to allow users to search the internet. During his tenure with Mayo, Elkin created a form of this software which allows medical practitioners to search hospital databases using ordinary language. Elkin claims ownership over the software as a derivative of his work prior to employment with Mayo. Mayo disagrees and argues it acquired ownership of the software pursuant to its Intellectual Property Policy.

In 2002, Mayo licensed the software to Conceptual Health Solutions (CHS), which commercialized and marketed it. In 2008, CHS and its software license were acquired by Cerner, a company specializing in healthcare technology. Also in 2008, Elkin left Mayo to begin working for Mount Sinai Hospital in New York. Upon his departure, Elkin ordered his staff to erase certain hard drives and took with him a stack of disks containing code for the software. Elkin contends Mayo authorized him to take the disks; Mayo disagrees. In November of 2008, Elkin gave a presentation at a conference of the American Medical Information Association. Representatives from Cerner attended the conference and viewed Elkin's presentation. Afterward, the Cerner representatives contacted Mayo and complained Elkin had presented software to which Cerner held an exclusive license. Mayo then contacted Elkin, asking him to return the disks and cease presenting the software.

When Elkin did not respond, Mayo filed suit in Minnesota state court and opted to withhold a royalty payment of $143, 220.20 due Elkin under one of the licensing agreements. Elkin removed the suit to the District of Minnesota and also filed suit against both Mayo and Cerner in the federal district court for the Southern District of New York. Ultimately, the suits were consolidated in the District of Minnesota.

Prior to trial, Elkin sought leave to introduce expert testimony through himself and Dr. Tom Love. With respect to his own testimony, Elkin argued that because he is an expert in the field, he should be permitted to testify as an expert regarding similarities between the current Mayo software and software he produced prior to working for Mayo. The court denied Elkin's request on the grounds that the current Mayo software had been edited since Elkin's departure and Elkin had not seen the newly added code; the court reasoned Elkin should not be permitted to testify to facts outside of his knowledge. The court also excluded Love's testimony on Daubert grounds, finding the methods he used had not been accepted by the scientific community.

After a five-day trial, the jury rendered a special verdict, finding Elkin had (1) breached his employment contract with Mayo; (2) intentionally interfered with an existing contractual relationship between Mayo and Cerner; (3) intentionally interfered with a prospective contractual relationship between Mayo and Cerner; (4) willfully and maliciously misappropriated one or more trade secrets belonging to Mayo; (5) intentionally exercised control over the software or its source code contrary to Mayo's rights; and (6) breached a fiduciary duty owed to Mayo. The jury also found Mayo had failed to pay Elkin the withheld royalties and awarded him $143, 222.20.

Following the trial, the court entered a final order memorializing the jury's findings and enjoining Elkin from any use or disclosure of the software and requiring Elkin to return all data and storage media containing any part of the software. Elkin filed a motion to alter or amend the order, arguing it did not fully and accurately reflect the jury's findings or delineate the parties' prospective obligations. The court denied Elkin's motion. Based on the jury's finding that Elkin's misappropriation had been willful and malicious, the court granted Mayo's request ...


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