A Houston jury ruled Thursday afternoon that Houston-based TechnipFMC did not own trade secrets related to subsea drilling designs that the company had accused hometown rival Dril-Quip and ex-FMC engineer Rick Murphy of misappropriating, handing FMC a take-nothing verdict.
In a verdict that was not unanimous, the jury left the remaining answers of a seven-question charge blank. FMC sought roughly $35 million in actual damages plus an unspecified amount of punitive damages.
The verdict reading was broadcast in the court of Harris County District Judge R.K. Sandill, who presided over the case. After the verdict was read aloud, the court told the jury they were not obligated to talk with the lawyers but encouraged them to do so. Then, the live-streaming stopped.
The jury got the case Tuesday at 1:30 p.m. and delivered its verdict at 2 p.m. Thursday.
“We respect the jury’s verdict but we do disagree with it,” AZA partner Todd Mensing, one of FMC’s lead lawyers, told The Texas Lawbook. “We appreciate their hard work and service. We are confident that this is coming back on appeal.”
Baker Botts partner Paul Morico, Dril-Quip’s lead attorney, told The Lawbook his side is “gratified” by the jury’s verdict.
“We are profoundly grateful to the jurors for their service and their careful consideration of the evidence in this matter,” Morico said. “We appreciate Judge Sandill presiding over an important trial during the pandemic.
“It’s clear to us that the jury took its responsibilities very seriously and carefully considered all of the evidence,” Morico added. “We feel confident that the jury’s verdict will be upheld in the event of an appeal.”
Gibbs & Bruns partner Barrett Reasoner, Murphy’s lead attorney at trial, told The Lawbook his client is “deeply appreciative of how carefully the jury considered the evidence and how seriously” the jurors took the job to reach their result.
“From a lawyer’s perspective, Judge Sandill shepherding an important case through an in-person trial during the pandemic was something that was very well-done,” Reasoner added. “All of the lawyers on both sides were involved in that effort. It was not an easy thing to do … but everyone did a great job.”
According to courthouse sources, the jury was deadlocked Wednesday afternoon and went home early as a result, which came after one person from the 12-juror panel was excused for a personal emergency that morning.
The meat of FMC’s case weighed on how jurors answered Question 1 of the charge, which asked whether FMC owned trade secrets. Reasoner and Baker Botts’ Danny David, a lawyer for Dril-Quip, spent a large portion of their closing arguments telling the jury that they were not trade secrets under Texas law because the information was “readily ascertainable” and already in the public domain.
“Once you answer ‘no’ to Questions [1a and 1b], you don’t need to answer any more,” David told jurors Tuesday before they got the case.
The nearly-monthlong trial was the finale of an action-packed six months for the parties, which involved fast-paced discovery, an injunctive hearing and at least three-dozen virtual depositions.
FMC sued Murphy and Dril-Quip in October, alleging Murphy stole valuable trade secrets related to FMC’s designs for subsea tree system on his way out the door to join Dril-Quip to build a competing design. FMC argued at trial that the trade secrets were drawings included in a confidential, unpublished patent application, which FMC said Murphy sent to Dril-Quip to help him secure the job.
The patent application was for an orientation-free system, an innovative technology that allows a subsea tree system to properly align itself instead of the traditional manual orientation, which requires expensive equipment and longer installation times that drive up costs by $3 million to $4 million per wellhead.
The lawsuit came three months after Dril-Quip announced its orientation-free VXTe Subsea Tree System at the Offshore Technology Conference. FMC said the diagrams of the VXTE system were virtually identical to the drawings included in FMC’s unpublished patent application.
At trial, Dril-Quip argued that its designs looked very different from FMC’s, that the “trade secrets” FMC alleged were not what Texas law considers as trade secrets, and that Dril-Quip developed its technology independently.
Murphy was the first witness called at trial, and took the stand for four days.
Due to Covid-19 concerns, Judge Sandill broadcast the trial virtually so members of the public could spectate from afar.
Given the pandemic-induced dry-spell of jury trials and the caliber of legal talent advocating for all three parties, it would be fair to assume that fellow trial lawyers around Houston gathered around their screens with popcorn in hand, watching the trial like they would the Oscars. More than 100 people tuned into Judge Sandill’s livestream channel during opening statements and closing arguments.