Tech company on track to receive $31.95M for patent violations

A federal jury has awarded $10.65 million to a North Carolina engineering company after finding that another company took its plans for a new product and used them to secure patents by wrongly portraying the technology as its own invention. The award is expected to be trebled to $31.95 million due to violations of the state’s Unfair and Deceptive Trade Practices Act, the  plaintiff’s attorneys report.

John Morrow and Minnie Kim of Womble Bond Dickinson in Winston-Salem report that their client, Nexus Technologies, which is based in Henderson County, began talks with Christopher Petrella, the owner of a South Carolina company called Unlimited Power, to discuss whether Nexus could design and manufacture a prototype for a portable renewable energy system. Petrella told Nexus’ president, Daniel Conti, and another Nexus employee, Benjamin Bomer, that he could sell the system to the U.S. military and other government agencies, according to Nexus’ complaint.

Conti and Bomer designed the system and submitted the plans to Petrella, but the parties hadn’t entered into any contractual relationship for Nexus to actually design and manufacture a portable energy renewal system for Petrella, the complaint states.

“Conti merely agreed to prepare an engineering and design proposal for Petrella’s consideration, after which the parties could discuss whether terms for a development and supply agreement could be reached, including costs for Nexus to make and sell the product to Petrella or an entity designated by Petrella,” per the complaint.

Over the next several months, Petrella periodically told Nexus that he was attempting to secure funding that would enable him to retain and pay Nexus to design and manufacture initial prototypes of the portable renewable energy system. These communications continued throughout 2013 and into early 2014.

But the lawsuit claimed that without notice to Nexus, Petrella filed patent applications based on Nexus’ designs with the U.S. Patent and Trademark Office, which approved them.

Petrella transferred the patents to Ravensafe, Inc., a company owned by Unlimited Power’s majority shareholder. In the meantime, Nexus placed a similar energy system up for sale on its website. Ravensafe sued, alleging patent infringement.

After a three-day trial, the jury deliberated for two hours before returning a verdict for Nexus on all issues on March 15, Morrow said. The jury found that Petrella had surreptitiously obtained the patents using Nexus’ ideas and used the patents as leverage to persuade investors and others not to do business with Nexus.

The jury awarded Nexus $10.65 million in damages. Under North Carolina law, the award was trebled to $31.95 million due to violations of the state’s Unfair and Deceptive Trade Practices Act.

Morrow said that the court employed safety procedures that limited exposure between the jurors and attorneys during the trial, “while allowing for in-person evidentiary presentations that are critical to evaluating factual disputes.”

“Our jury also appeared to be very attentive and conscientious,” Morrow said. “They went above and beyond what could reasonably be expected, particularly during a pandemic.”

Robert Ward of Atlanta represented the defendants. He could not be reached for comment.

Follow Bill Cresenzo on Twitter @bcresenzonclw

VERDICT REPORT — INTELLECTUAL PROPERTY

Amount: $31.95 million

Injuries alleged: Patent violations

Case name: Nexus Technologies Inc., Daniel Conti and Benjamin Bomer v. Unlimited Power and Christopher Petrella

Court: U.S. District Court for the Western District of North Carolina

Case No.: 1:19-cv-00009

Date of verdict: March 15

Attorneys for plaintiff: John Morrow and Minnie Kim of Womble Bond Dickinson in Winston-Salem

Attorney for defendants: Robert Ward of Atlanta