## Facts

- Celeritas owned U.S. Patent No. 5,386,590, covering a de-emphasis technique intended to increase data transmission rates over analog cellular networks.
- In September 1993, Celeritas and Rockwell executed a nondisclosure agreement (NDA) limiting Rockwell’s use of Celeritas’s proprietary information to evaluating a business relationship and excluding information already in (or independently entering) the public domain.
- Celeritas then disclosed implementation details of its de-emphasis technology to Rockwell under the NDA.
- In March 1994, AT&T began selling a modem that used de-emphasis technology, but the use and details were not readily detectable without specialized equipment and know-how.
- Rockwell declined to license Celeritas’s technology and instead developed similar functionality; Rockwell shipped prototype chipsets incorporating de-emphasis in January 1995, when the patent issued.
- Celeritas sued in the Central District of California for willful patent infringement, trade-secret misappropriation, and breach of the NDA.
- A jury found for Celeritas on all theories and awarded damages; the district court denied Rockwell’s JMOL and new-trial motions.
- The parties stipulated that Celeritas would recover only the highest single award among overlapping theories.

## Issues

1. Whether the patent claims were anticipated as a matter of law by prior art, requiring JMOL of invalidity.
2. Whether substantial evidence supported liability and damages for breach of the NDA, including whether the disclosed information remained “proprietary” rather than public.
3. Whether Celeritas could recover exemplary trade-secret damages in addition to contract damages despite the stipulation limiting recovery to one award.

## Decision

- Reversed the judgment on the patent claim and directed entry of judgment for Rockwell because the asserted claims were anticipated as a matter of law.
- Affirmed the verdict and damages on the breach-of-NDA claim, holding substantial evidence supported that Rockwell used covered proprietary information and that the damages measure was supported.
- Affirmed denial of additional exemplary damages for trade-secret misappropriation, holding the stipulation barred recovery on more than one overlapping claim.

## Legal Principles

- A prior-art reference anticipates if it discloses every claim limitation; disparagement of the disclosed invention (often described as “teaching away”) does not negate anticipation.
- Information embodied in a commercial product is not necessarily “public domain” for an NDA if the relevant technical details are not practically accessible and the recipient received additional implementation details under confidentiality.
- Contract damages for misuse of confidential technology may be supported by a hypothetical license measure when grounded in record evidence of economic value and licensing practice.
- A stipulation limiting a plaintiff to a single recovery for overlapping theories may bar additional exemplary damages that would create a double recovery for the same conduct.

## Conclusion

The Federal Circuit invalidated Celeritas’s patent for anticipation, but upheld Rockwell’s liability and damages for breaching the NDA based on misuse of confidential implementation details, and enforced the parties’ stipulation limiting Celeritas to one recovery, precluding added trade-secret exemplary damages.


Celeritas Techs., Ltd. v. Rockwell Int'l Corp., 150 F.3d 1354 (Fed. Cir. 1998)