Free Response to Motion - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 01-cv-00413-JLK-BNB M.D. MARK, INC., Plaintiff, v. KERR-McGEE CORPORATION and ORYX ENERGY COMPANY, Defendants. ______________________________________________________________________________ PLAINTIFF'S RESPONSE TO DEFENDANTS' RENEWED MOTION FOR JUDGMENT AS A MATTER OF LAW PURSUANT TO RULE 50(b) OR ALTERNATIVELY, MOTION FOR NEW TRIAL, FOR REMITTITUR, AND/OR TO ALTER AND AMEND THE JUDGMENT PURSUANT TO RULE 59(e) ______________________________________________________________________________ Plaintiff, M.D. Mark, Inc. ("MD Mark"), respectfully responds to Defendants' Renewed Motion For Judgment As A Matter Of Law Pursuant To Rule 50(b) or Alternatively, Motion For New Trial, For Remittitur, and/or To Alter And Amend The Judgment Pursuant To Rule 59(e). In response M.D. Mark states the following: INTRODUCTION On Friday, September 28, 2007, the jury returned verdicts in favor of M.D. Mark, Inc. against Defendants, Kerr-McGee Corporation and Oryx Energy Company. On the first claim, the jury was asked to determine whether Oryx breached license agreements. The jury found that

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Oryx breached its license agreements when "Oryx ("Sun") transferred the license agreement[s] to Kerr-McGee Corp. without prior approval" and awarded damages of $15,745,000.00. 1 On the second claim, as specifically provided for on Section B of the Special Verdict Form, the jury was asked to determine whether Kerr-McGee Corporation breached license agreements. The jury found that Kerr-McGee Corporation breached its license agreements when it "transfer[red] license agreements to Kerr-McGee Oil & Gas, no prior consent. All data was not returned trade secrets not safe guarded". The jury awarded $968,750.00 on that claim. On the third claim as specifically provided for on Section C of the Special Verdict Form, the jury was asked to determine whether Kerr-McGee misappropriated M.D. Mark's trade secrets. The jury found that Kerr-McGee gained access to and possessed PGI Data through improper means and determined that it gained access to the PGI Data through improper means in 1996 when the PGI Data was shipped to MidCon Data Services from Kerr-McGee Offices in Houston. The jury also determined that Kerr-McGee wrongfully transferred control of the PGI Data from a wholly owned subsidiary of Oryx to a subsidiary of Kerr-McGee Corporation. The jury awarded $25,266,381.00 on this claim. The Court then ordered that Judgment be entered in favor of Plaintiff, M.D. Mark, Inc. against Defendants, Kerr-McGee Corporation and Oryx Energy Company in the amount of $25,266,381.00 instead of adding the awards for each separate claim. LEGAL STANDARDS Plaintiff does not dispute the legal standards regarding Judgments as a Matter of Law ("JMOL") as provided for by Rule 50(b) or the legal standards regarding a motion for new trial
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See Section A of the Special Verdict Form

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as provided for by Rule 59(e) as cited by Defendants in their Brief. Plaintiff does however dispute Defendants attempt to apply the legal standard governing JMOL, a significantly lower burden Defendants hope to satisfy, to arguments never raised at trial. Additionally,

reconsideration of a judgment pursuant to Rule 59(e) after its entry is an extraordinary remedy which should be used sparingly. Sussman v. Salem, Saxon & Nielsen, P.A., D.C.Fla.1994, 153 F.R.D. 689; Ruscavage v. Zuratt, D.C. Pa.1993, 831 F. Supp. 417; See also Pennsylvania Ins. Guar. Ass'n v. Trabosh, D.C.Pa.1992, 812 F. Supp. 522. The Rule 59(e) motion may not be used to relitigate old matters, 2 or to raise arguments 3 or present evidence 4 that could have been raised prior to the entry of judgment. At close of Plaintiff's case, Defendants' moved arguing that the merger could not constitute a breach of the license agreements as found by the jury in Section A of the Special Verdict Form. However, Defendants never addressed, much less reconciled this Court's finding that the merger could cause the license agreements to be breached if the licenses agreements expressly prohibited a transfer as a result of merger. Therefore, this portion of Defendants current argument cannot be governed by the legal standard for a JMOV, rather is governed by a much higher burden as provided for by Rule 59(e). Likewise, Defendants' argument regarding the Court entering judgment for Defendants relating to Section B of the Special Verdict Form was never presented previously. At no point during trial did Defendants raise the issues that: 1) the 760 miles of seismic data ("Category II") data licensed by M.D. Mark to Defendant Kerr-McGee Corporation was not transferred to a
2
3

Dale & Selby Superette & Deli v. Department of Agriculture, 838 F. Supp. 1346 (D.C. Minn. 1993). Steele v. Young, 11 F.3d 1518 (C.A.10th, 1993). 4 Lostumbo v. Bethlehem Steel, Inc., 8 F.3d 569 (C.A.7th, 1993).

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wholly-owned subsidiary; 2) that Kerr-McGee had no obligation under the licenses to return this data; or 3) That M.D. Mark failed to present evidence that Kerr-McGee failed to guard trade secrets. Therefore, these three arguments are also governed by the much higher burden as provided for by Rule 59(e). ARGUMENT As more specifically provided herein, even if this court applies the lower legal standard governing JMOV to all aspects of the Judgments as Defendants hope, Defendant Kerr-McGee's Renewed Motion for Judgment as a Matter of Law Pursuant to Rule 50(b) or Alternatively, Motion for New Trial, for Remittitur, and/or to Alter and Amend the Judgment Pursuant to Rule 59(e) is dead upon arrival. I. THIS COURT SHOULD NOT ENTER JUDGMENT FOR DEFENDANTS ON ALL OF PLAINTIFF'S CLAIMS RELATING TO THE 16,000 MILES OF ORYX SEISMIC DATA (CATEGORY 1) AND THE 760 MILES OF KERR-MCGEE SIESMIC DATA (CATEGORY 2) A. Section A of the Verdict Form: This Court Should Not Enter Judgment for Defendants on Plaintiff's Claims for Breach of the Oryx/Sun License Agreements Relating to the 16,000 Miles of Oryx Seismic Data.

As stated above, Defendants never challenged at trial this Court's finding that the merger could cause the license agreements to be breached if the licenses agreements expressly prohibited a merger as a result of merger. Clearly, had this Court found as a matter of law that each of these licenses agreements did not expressly prohibit transfer by merger the Court would never have given instructions 3.2.2. and 3.2.3. This Court found as a matter of law that this issue was factually disputed and based upon the evidence presented, it was for the jury to determine whether the licenses expressly prohibited transfer via merger or not. The jury clearly agreed 4

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with Plaintiff's expert John Moye, Esq. as well as other witnesses that the PGI license agreements governing the 16,000 Category 1 seismic data did expressly prohibit the transfer of this data as a result of merger. Therefore, to set aside and/or amend the jury's finding, KerrMcGee must demonstrate: 1) that the motion is necessary to correct clear error 5 ; 2) incorporate an intervening change in the law; 6 3) to reflect new evidence not available at trial;7 or 4) the trial was not fair. 8 Defendants Motion is vague as to which of the aforementioned theories upon which it is based, but the argument suggests that the motion is necessary to correct clear error. Unfortunately for Kerr-McGee, nowhere in the instant motion is any evidence of clear error. Kerr-McGee simply makes on page 12 of its Motion the bald and unsubstantiated argument that: "the jury's fact finding that Oryx (Sun) breached the license agreements with respect to
the 16,000 in seismic data by transferring the license agreements to `Kerr-McGee Corp' is tantamount to a finding that Kerr-McGee/Oryx merger was the breach." [Emphasis Added]

In order for Kerr-McGee to satisfy this significant legal threshold that clear error exists, it is no wonder that Kerr-McGee attempts to re-characterize the jury's finding so as to violate the corporate merger law upon which the Court relied upon with respect to Jury Instruction 3.2.3. This specious argument completely ignores the evidence presented at trial by Mr. John Moye [Tr: page 174], Mr. Leon Herzog [Tr: pages 273, 281, 325], and Mr. Robert Gray [Tr: page 382, 386], each of whom testified that these agreements did in fact expressly prohibit transfer via
Messina v. Krakower, 439 F.3d 755, 758 (D.C. Cir. 2006); Bogart v. Chappell, 396 F.3d 548, 555 (4th Cir. 2005); Fox v. American Airlines, Inc., 389 F.3d 1291, 1296 (D.C. Cir. 2004); Munafo v. Metropolitan Transp. Auth., 381 F.3d 99, 105 (2nd Cir. 2004); Templet v. HydroChem., 367 F.3d 473 (5th Cir. 2004). 6 Messina v. Krakower, 439 F.3d 755, 758 (D.C. Cir. 2006); Bogart v. Chappell, 396 F.3d 548, 555 (4th Cir. 2005). 7 Infusion Res. Inc. v. Minimed, Inc., 351 F.3d 688, 696-7 (5th Cir. 2003); Messina v. Krakower, 439 F.3d 755, 758 (D.C. Cir. 2006). 8 Messina v. Krakower, 439 F.3d 755, 758 (D.C. Cir. 2006)
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merger. Specifically, in many of the PGI licenses between PGI and Sun Exploration and Production Company contains the following clause: " The date covered under this agreement is for the sole use of Purchaser and is not to be sold, traded, disposed of, or otherwise made available to other parties except under the following conditions: "1. The data may be shown to a consultant for interpretation.

2. The data may be shown to a third party in order to secure partners in a specific drilling venture but may not be shown to another party to assist said party in making a regional interpretation. 3. The data will remain in the physical possession of Purchaser and will not be actually surrendered to any third party or a consultant without the prior written consent of Pennzoil Exploration and Production Company, P.G.I. or Geophysical Systems Corporation." [Emphasis Added] This license, and others like it, expressly prohibit transfer via merger because of the only three permissible ways this data can be shared, merger is not provided for anywhere in the three exceptions. In other words, for Kerr-McGee's argument to pass muster, transfer via merger needs to be provided for in one of the three exceptions. Therefore, transfer via merger as well as every other conceivable way to transfer this data, save the three exceptions, is expressly prohibited. The evidence at trial supports the jury's finding because each of these witnesses testified that because merger was not listed as an exception, transfer via merger was not permitted. Furthermore, this very language was relied upon in other circumstances where a merger occurred between oil companies and the PGI seismic data was either returned or a transfer fee paid. See Mr. Leon Herzog [Tr: page 325] and Mr. Robert Gray [Tr: page 386] This is consistent with the testimony presented regarding the custom and practice in the seismic data industry. Evidence 6

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was also presented in the form of e-mails between Carlos Salazar and Darren Helm where this very discussion occurred with Mr. Helm coming to the same conclusion as the jury; the PGI data could not be transferred via merger. [Trial Exhibit 156 page 4] The second type of license agreements does expressly prohibit transfer via merger, using different language. These agreements accomplish this by providing specific conditions

precedent to the legal authority to transfer the PGI data in the event of a merger. In the other PGI licenses between PGI and Sun Exploration and Production Company the following clause is provided:
"Title to the Data shall remain in PGI, and Licensee shall not have the right to disclose the Data to third parties or convey or otherwise transfer the Data or any of Licensee's rights thereto, except as otherwise provided herein". ... "Licensee may disclose the Data by providing copies thereof: (1) To a wholly owned subsidiary of Licensee, to a company owning 50% or more of the voting stock of Licensee (providing such 50% ownership was effective on the date of this Agreement) or to a surviving company in the event of a complete merger by Licensee; (2) To accompany having a farmout agreement with Licensee; and (3) To any party, partner, group or combine contracting with Licensee for the purpose of joint development programs for exploring for and producing hydrocarbons in all or a portion of the areas to which the Data pertains, provided that Licensee may disclose Data to third parties under this Section IV only after Licensee has paid the group rate for the Data and such disclosure shall be limited to those seismic sections or a portion thereof displaying Data relative to the tracts in which such third party has an interest. Licensee may show, but shall not provide copies of, seismic sections to a consultant or a party with whom Licensee is conducting bona fide negotiations for a farmout or contract for joint development interest, provided that any disclosure to such party shall be limited to seismic sections or portions thereof displaying Data relative to tracts under negotiation and shall not be disclosed until the other party has agreed to keep the Data confidential. Any party who is otherwise eligible to receive the Data or any part thereof pursuant to this Section IV, may not see or receive the same until (1) such party has executed with Licensee a sublicense agreeing to the restricted use of the Data and the seismic sections and the information derived therefrom and to be bound by the other terms and conditions of this Agreement, (2) Licensee has notified PGI in writing of such sublicense, and (3) the group rate fee for providing such copies has been paid to PGI."

Again, the evidence presented at trail clearly establishes that the actual PGI data was transferred to the wholly owned subsidiary Kerr-McGee Oil & Gas Corporation. First, this 7

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license only allows copies to be provided subject to the conditions precedent being satisfied. Second, no evidence whatsoever was presented that Kerr-McGee entered into any sublicense of this data. Third, the only notice given about anything by Kerr-McGee was that M.D. Mark was to change its records to denote that the new licensee following the merger would be Kerr-McGee Oil & Gas Corporation. No notice of any sublicense is mentioned. Fourth, no evidence was presented that a group fee was paid. Indeed, Kerr-McGee's witnesses all testified that no fee was paid to M.D. Mark because it believed no fee was owed. Again, based upon this testimony, there cannot be any clear error regarding the verdict simply because the jury applied this testimony to Instruction 3.2.3. Instructions 3.2.2 and 3.2.3 clearly place with the jury the purview to determine whether this testimony regarding the PGI license agreements address the transferability via merger. Put another way, in light of this testimony it was for the jury to decide if the agreements expressly prohibited the "transfer of the license agreement[s]" as a result of the merger. If not, this Court would have found as a matter of law that the license agreements do not expressly state this and ruled accordingly. B. Section B of the Verdict Form: This Court Should Not Enter Judgment For Defendants On Plaintiff's Claims For Breach Of Contract Claims Relating To The 760 Miles Of Seismic Data Licensed Directly To KerrMcGee. 1. There Is Evidence to Support the Jury's Finding that Kerr-McGee Transferred the 760 Miles of Kerr-McGee Seismic Data (Category 2 Above) to any Subsidiary, Including Kerr-McGee Oil & Gas.

It is important to note that this argument was also never presented at trial and is therefore, governed by the Rule 59(e) legal standard. Kerr-McGee again apparently argues that the jury clearly erred in finding that the license agreements governing this 760 miles of category 2 data 8

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were breached by the "transfer [of the] license to Kerr-McGee Oil & Gas no prior consent. All data was not returned trade secrets were not safe guarded." On page 14, Kerr-McGee argues that "[t]here is no evidence that Kerr-McGee ever suggested that it was transferring, much less that Kerr-McGee did actually transfer, any of the 760 miles of the seismic data ... to any subsidiary." Unfortunately, there is evidence of a transfer in the form of testimony by KerrMcGee's attorney Carlos Salazar. Mr. Salazar testified that Kerr-McGee Corporation did not engage in any onshore exploration because all onshore exploration was done by subsidiaries such as Kerr-McGee Oil & Gas Corporation. [Tr: page 587] Mr. Salazar went so far as to testify that Kerr-McGee Corporation had no use for seismic data. This testimony is corroborated by the testimony of Tom Schultz who testified that the data was used in Dallas at the offices of KerrMcGee Oil & Gas Corporation. Again, this makes sense since Kerr-McGee Corporation was not engaging in onshore exploration. This testimony was clearly compelling to the jury as the jury specifically mentions this transfer as the basis for the beach of contract in Section B. The jury correctly relied on this testimony which established that Kerr-McGee Corporation transferred this data to at least KerrMcGee Oil & Gas Corporation. According to Mr. Salazar and Mr. Schultz, all exploration utilizing this 760 miles of seismic data had to done via one these subsidiaries in Dallas, Texas, not Oklahoma City, Oklahoma, where Kerr-McGee Corporation was located. Kerr-McGee's other attorney Marilyn Young also testified to this fact. [Tr: page 1067] This new argument is also completely contradicted by Kerr-McGee's "one big happy family" argument presented at trial. Carlos Salazar testified that Kerr-McGee was permitted to

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share all the PGI seismic data with its subsidiaries. Counsel for Kerr-McGee repeatedly argued this point to the jury epitomized with the quote that: "A parent and its wholly owned subsidiary have a complete unity of interest. Their objectives are common, not disparate; their general corporate actions are guided or determined not by two separate consciousnesses, but one. They are not unlike a multiple team of horses" -- I like that one -- "drawing a vehicle under the control of a single driver. The subsidiary acts for the benefit of the parent, its shareholder." (Tr: 901, lines 15 -22) 2. Kerr-McGee did have an Obligation Under its Contract to "Return" The 760 Miles of Kerr-McGee Seismic Data.

Kerr-McGee next cites the 1994 license agreement in which it licensed PGI seismic data directly from M.D. Mark that it did not have an obligation to return the 760 miles of category 2 PGI data. This argument is completely illogical, contradicted entirely by the express language of this license. Kerr-McGee's claims that just because this license may terminate due to some violation detailed therein, that somehow this does not mean the 760 miles of PGI data need to be returned. More confusing is that Kerr-McGee in its brief cites the express language which contradicts this argument. Specifically on page 15 it states "[I]n the event of acquisition or merger, the license granted herein shall immediately terminate and all copies of the Data shall be promptly returned to Licensor." It is inexplicable how Defendants can claim that the jury committed clear error in finding that Kerr-McGee Corporation breached this license agreement by refusing to return the 760 miles of PGI data when the undisputed evidence presented at trial was that since 1999 KerrMcGee merger with Oryx engaged in several corporate reorganizations and mergers. Marilyn Young's testimony was consistent with John Moye's testimony each of whom confirmed this 10

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fact. Ms. Young admitted to at least on corporate reorganization occurring in 2002 and a top hat merger in 2001 with HS Recourses, another merger with Westport in 2004. [Tr: pages 1067-71] 3. Similarly, There Is Evidence that Kerr-McGee Failed to Guard Trade Secrets in Connection with the 760 Miles of Kerr-McGee Seismic Data.

Again, this argument was never raised during trial and therefore, Defendants must prove that the jury clearly erred in finding that Kerr-McGee failed to safeguard M.D. Mark's trade secret. At trial, Kerr-McGee stipulated that all of the PGI seismic data at issue in this case was a trade secret. Accordingly, it was stipulated to by Kerr-McGee that this data was to be afforded special protection while it was in the possession of Defendants. Finally, it was admitted at trial that 227 miles of M.D. Mark's trade secrets were not returned and that Kerr-McGee could not account for the location of these trade secrets. To now argue that somehow the jury clearly erred in finding that Kerr-McGee breached these license agreements when it admitted to not being able to find M.D. Mark's trade secret is utter nonsense. No matter what legal standard is applied, this argument is dead upon arrival. C. Section C1(b) of the Verdict Form: This Court Should Not Enter Judgment for Defendants on Plaintiff's Misappropriation of Trade Secrets Claim Relating to the 16,000 Miles of Oryx Seismic Data

Kerr-McGee again argues that the jury's finding that this data was transferred to a wholly owned subsidiary of Kerr-McGee must be set aside. Kerr-McGee, in making this legally flawed argument, concedes that judgment in its favor can only occur if "the evidence points but one way" and that there is "no legally sufficient evidentiary basis ... with respect to a claim or

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defense under the controlling law." Citing Mason v. Okla. Turnpike Auth., 115 F.3d 1442, (10th Cir. 1998) Nowhere in Defendants' Motion is any explanation how this Court can ignore the testimony of Mr. Salazar or Mr. Schultz, each of whom testified that they thought the 16,000 miles of category 1 data was transferred to Kerr-McGee Oil & Gas Corporation. Evidence that this data was located in Dallas Texas at the Kerr-McGee Oil & Gas Corporation offices was also unrebutted by Defendants. This Court need look no further than the letter sent by Kerr-McGee Corporation stating that the new licensee of this data will be Kerr-McGee Oil & Gas Corporation, not Kerr-McGee Oil & Gas Onshore LLC or Kerr-McGee Oil & Gas Onshore LP. Incredibly, on page 22 of their Motion, Kerr-McGee now claims that Ms. Horsfall's letter was incorrect. In making this argument, it is claimed that the record supports such a finding. Upon review of the testimony of Mr. Salazar and Mr. Schultz cited above, the record does not support such a finding. Regardless, Ms Marilyn Young absolutely contradicts this letter as well as the testimony of both Mr. Salazar and Mr. Schultz, therefore, defeating this argument because the evidence presented in this case absolutely does not point "but one way". What this evidence

does establish is that there was sufficient evidentiary basis for the jury's finding that Defendant's misappropriated these trade secrets. Additional evidence upon which the jury based its verdict, also contradicting KerrMcGee's argument is the undisputed fact that the named licensee for the category 1 PGI seismic data is Sun Exploration and Production Company or Oryx Energy Company, not Sun Operating Limited Partnership. This much was admitted by Ms. Young during trial. [Tr: page 1066] Again, Kerr-McGee's argument ignores the undisputed fact that SOLP never licensed any PGI 12

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seismic data. At trial Kerr-McGee presented no evidence that this transfer was permissible. The evidence at trial points in the direction that regardless of the conflicting testimony as to exactly which subsidiary of Kerr-McGee acquired this data, the transfer from Oryx (formerly Sun Exploration and Production) constituted a breach of these licenses agreements. Ms. Young went on to admit that as part of the 2002 "top hat" merger that everything transferred to Kerr-McGee Oil & Gas and then on to various subsidiaries of Kerr-McGee Oil & Gas. [Tr: page 1069] The jury was free to determine factually that the category 1 PGI data did not remain in the possession of SOLP and likely was transferred within the "family" of KerrMcGee Corporations. 2. The License Agreements Do Prohibit a Transfer to a Subsidiary.

Every attorney that testified at trial agreed that the Kerr-McGee subsidiaries were separate corporations and therefore, constituted a third party for purposes interpreting the license agreements. See [Ann Lane, Esq. Tr: page 482; Carlos Salazar, Esq. pages 555, 567; John Moye, Esq. page 187, 201; Marilyn Young, Esq.] The language of the licenses agreements quoted above clearly indicate that transferring the actual PGI data and license to the data to a subsidiary violated the express terms of these licenses. This Court's ruling which resulted in Jury

Instruction 3.2.3 is consistent with the testimony of each of these witnesses. Again, Kerr-McGee presented no evidence at trial which contradicts this finding. On page 23 of their Motion, Kerr-McGee now argues that this was a factual determination for the jury to have decided. However, no citation to the trial transcript is given, and upon review of the transcript it is Plaintiff's position that this was another legal argument that Defendants failed to raise during trial. Specifically, it does not appear anywhere in this transcript where Defendants 13

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claim that the jury was required to interpret the language of the license agreements as opposed to being a legal question for the Court to decide. Without some citation to the record, this issue is reviewed by the higher legal standard as provided for by Rule 59(e). Defendants are required to prove that this Court committed clear error in interpreting the license agreements as purely a question of law. No legal authority in support of this argument is presented and therefore cannot be sustained by the clear error standard. What the Defendant does is present several cases which Kerr-McGee relied upon in its Motion for Partial Summary Judgment as to Corporate Merger. The Defendants do not present any new legal basis which would cause this Court to rule any differently than it did when denying that Motion. Kerr-McGee cannot overcome the binding legal precedent that when licensing seismic data, the owner of the data retains the absolute right to control the persons who have access to their data. Not only is this standard custom and practice in the industry, it is the law. In Thistle v. Tenneco, Inc., 872 P.2d 1302, 1307 (Colo. App. 1994), the Colorado Court of Appeals held that "the right to control the persons who have access to seismic data is necessarily an incidental attribute of the right of ownership of that data. Indeed, without the right to such control, the right of ownership would be meaningless." The ruling in Thistle is in complete accordance with the holding in Cincom v. Novelis Corp., 2007 WL 128999 (S.D. Ohio 2007). Specifically, with respect to trade secrets they cannot be transferred to subsidiaries as a result of merger. The Court in Cincom took great care in distinguishing the TXO holding finding that: The TXO court specifically distinguished PPG, noting that "[t]he PPG opinion also was based upon strong public policy against the implied assignment of patent licenses" and that the plaintiff in the case before it had failed to show that seismic 14

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data was a trade secret akin to patent rights. 999 S.W.2d at 142 n. 4." [Emphasis Added] It is quite telling that Kerr-McGee, in making this argument, intentionally omitted the Court's finding that a trade secret was akin to patent rights, hoping to convince this Court to distinguish the ruling in Cincom to the instant case. Unfortunately for Kerr-McGee, the fact that trade secrets are akin to intellectual property, both cases are distinguishable from the TXO holding as well as the other authority cited already once rejected by this Court. 3. Defendants Can Be Held Liable for the 11,000 Miles of Oryx Seismic Data that it Returned.

Yet again, Defendants present an argument that was not adequately raised at trial and therefore, is again subject to the clear error legal standard. Kerr-McGee never raised at trial the defense that a misappropriation of trade secrets could be affirmatively defended by simply returning the trade secret years later and after having been used. Colorado's trade secret statute, C.R.S. § 7-74-104 makes no mention of such an affirmative defense. This statute provides that:
"1. Acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or 2. Disclosure or use of a trade secret of another without express or implied consent by a person who: a. Used improper means to acquire knowledge of the trade secret; or b. At the time of disclosure or use, knew or had reason to know that such person's knowledge of the trade secret was: (A) Derived from or through a person who had utilized improper means to acquire it; (B) Acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or (C) Derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use; or c. Before a material change of such person's position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake."

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Absent is some legal basis offered in support of this argument which clearly is contrary to Colorado law, judgment cannot enter in favor of Defendants. Additionally, Defendants' argument that "no evidence that Defendant Kerr-McGee `misappropriated' the 11,000 miles of Oryx data" is contradicted by all of the trial testimony and evidence cited above. The jury found that the misappropriation occurred when the PGI data was transferred to a subsidiary of Kerr-McGee Corporation. By virtue of the testimony of Carlos Salazar and Tom Schultz, consistent with Patricia Horsfall's letter prove that enough evidence exists to support this verdict. II. AS FOR THE CLAIMS CONCERNING THE 3,100 MILES OF SEISMIC DATA (CATEGORY 3 ABOVE) THIS COURT SHOULD NOT GRANT A NEW TRIAL. Kerr-McGee conceding during the Rule 50 Motion, following the close of Plaintiff's case, that the claims relating to the 3,100 miles of the Category 3 data was to be decided by the jury. Now Kerr-McGee claims on page 25 that "no judgment for Plaintiff is proper" or at least a new trial should be granted. To get there, Kerr-McGee claims that the damages of $25,266,381 were so excessive so as to shock the judicial conscience. A. The Jury's $25,266,381 Damage Award for Misappropriation of Trade Secrets Was Not the Result of Passion or Prejudice.

The problem with Kerr-McGee's argument that this award is unreasonably excessive is that it fails again to overcome the evidence presented at trial. Specifically, all of the witnesses save Defendants' expert witnesses 9 testified that that seismic data licensed for somewhere between $1,000 and $1,400 per mile. Mr. Leon Herzog testified that the PGI continues to

license for about $1,200 per mile just as it did back in the mid 1980's. [Tr: page 298] Mr.
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John Moye was not asked to offer any expert testimony on damages.

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Robert Gray, Ms. Ann Lane, Esq., Ms. Davies, Mr. Darren Helm, all agreed that the typical license fee for seismic data was about $1,200 per mile. [Gray Tr: page 371; Lane Tr: page 443; Davies Tr: page 715; and Helm Tr: page 735] Even Kerr-McGee's expert, Mark Kramer, conceded that seismic data licenses for $1,200 per mile in smaller quantities. [Tr: page 1202] Therefore, in order to put the damage award into context and applying the standard as specifically provided for in Jury Instruction 3.6 which states that: "compensatory damages seek to make the injured party whole. That is, to compensate the party for the damages that it suffered and represent a sum of money that will fairly, adequately and reasonably compensate a party for harm caused by another's conduct... You may also consider evidence regarding the actual value, if any, of the seismic data that M.D. Mark alleges to have been misappropriated to the extent that value reflects something other than that or different from lost license fees." Unfortunately, we do not know the exact methodology the jury uses in arriving at the specific dollar awards. The jury could have awarded $1,000 per mile for the breach of contract damages, and a dollar figure very close to that for the misappropriation claims if all the mileage is added up for all 4 categories of PGI seismic data. If the jury were punishing Kerr-McGee, the jury would have used a much higher price per mile than the average price per mile than the $1,200 per mile all the witnesses knowledgeable about such fees agreed was typical in the industry. 1. In Section C, the Jury Was Not Asked Only Whether Defendants Misappropriated the 16,000 Miles of Oryx Seismic Data (Category 1 Above) and the 3,100 Miles of Seismic Data (Category 3 Above)

This latest argument is contradicted by the express language of Section C of the Verdict Form. In section C1(a) the jury is asked to determine if M.D. Mark proved that "Kerr-McGee 17

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Corporation gained access to and possessed PGI Data through improper means." [Emphasis Added] Clearly, this question is not limited to the 3,100 miles of bootlegged data, and

contemplates all of the PGI Data transferred to a subsidiary of Kerr-McGee Corporation as well as the lost PGI Data Kerr-McGee admitted it could not find or account for. Kerr-McGee argues that section C1(b) could only relate to the 16,000 miles of Oryx data because of Jury Instruction 3.2.2. Again, nowhere in this argument is it explained why this section could not also relate to the missing data which, as part of the transferring of this data to these various subsidiaries was lost, misplaced, or became unaccounted which would change Defendants math in Plaintiff's favor. Defendants have divided the combined 16,000 miles of category 1 data with the 3,100 miles of data to get a total of 19,100 miles which Defendants divided by the $25,266,381 speculating that the jury awarded $1,322.85 per mile. The $1,322.85 is almost exactly what the witnesses identified above testified was within the $1,000 to $1,400 price per mile. What is most confusing and completely unsupported by any legal authority cited by Defendants is how the $1,322.85 which is consistent with the evidence at trial was arrived at by the jury based upon undue passion or prejudice. In order for this argument to fly and fall with the legal authority cited by Defendants, the jury would have had to use a number so high and unsupported by the evidence so as to shock the judicial conscience of the Court. It gets worse for Defendants. If the approximately 6,000 miles of missing category 4 data is added to Defendants formula, the price per mile used by the jury is even less and more reasonable. Using a rounded number of 25,000 miles for all 4 categories of the PGI data, the jury awarded about $1,000 per mile just as it did for the breach of contract damages. Again, it is inexplicable how $1,000 per 18

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mile, approximately $200 per mile cheaper than the data was licensed for over 25 years ago could be prejudicial or inspired by unsupported passion. It should not be lost on this Court that the 25 year old licenses fees of $1,200 per mile were negotiated absence any theft of trade secrets which the jury clearly believed was the case with the 3,100 miles of bootlegged data. In other words, Defendants got off easy paying either the $1,200 or $1,000 per mile on the bootlegged data given the testimony regarding the cost Kerr-McGee would have incurred if forced to shoot this data on their own. Robert Gray and Marilyn Davies, both of whom oversaw and arranged for the shooting of two dimensional seismic data, testified that the cost to acquire the PGI data ranged from $4,500 to $35,000 per mile depending on terrain and difficulties in shooting the data. [Gray Tr: pages 355, 370; Davies page 693] According to Jury Instruction 3.6 the jury could have awarded somewhere between $5,000 and $35,000 per mile for the 3,100 miles of stolen data. That award could have been $15,500,000 and $108,500,000, well in accordance with the evidence presented and the applicable law, both of which would have been reasonable. Defendants' own math confirms the absurdity of the argument that this award should be set aside as shocking and excessive. Further defeating Defendants' argument is the egregious conduct of Kerr-McGee where the evidence at trial established that the 3,100 miles of bootlegged data was the best PGI data owned by the Plaintiff, and which Kerr-McGee refused to return. If this data was used by KerrMcGee for successful oil exploration, Kerr-McGee could have made much more money than the jury awarded the Plaintiff. For all any of us know, even if Kerr-McGee wrote a check for the $$25,266,381, Kerr-McGee could still have earned a tidy profit from the theft of this data. It is 19

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exactly for this reason that the jury was allowed to consider the acquisition costs of this data. If not, the chance of making the Plaintiff whole may not have been possible. B. A New Trial on Damages for the 3,100 Miles of Alleged "Bootlegged Data" is Not Required.

Defendants argue that lump sum damages are not permitted and therefore, a new trial is required. The problem for Defendants is the fact based upon the math formula they presented and explained above, it appears that the jury did not arrive at a lump sum. A lump sum denotes a nice round number like $25,000,000. Why did the jury arrive at such a unique number such as $25,266,381. This number clearly indicates a detailed and well thought out formula that the jury used. Just because Defendants are not privy to the exact formula used by the jury, does not render this a lump some. By Defendants own math, it is not a coincidence that the jury's unique award is very close to the testimony cited above of $1,000 to $1,400 per mile. III. OTHER GROUNDS DO NOT EXIST FOR A NEW TRIAL In citing all of the testimony above, it is clear that the jury arrived at the appropriate verdict. In the interest of judicial economy Plaintiff M.D. Mark requests that the citation to the trial transcript above and argument be incorporated as a response to this argument. A. The Jury's Verdict Does Not Run Counter to the Great Weight of the Evidence.

In the interest of judicial economy, Plaintiff M.D. Mark requests that the citation to the trial transcript above and argument be incorporated as a response to this argument. B. The Jury's Verdict is Not Contrary to this Court's Clear Instructions.

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As argued at length above, this Court was required to resolve all questions of law such as the Court's finding as provided for in Jury Instruction 3.2.2. and 3.2.3. During trial, there was ample evidence that the custom and practice in the seismic data industry supports the testimony that it was the intent of PGI to prohibit transfers via merger. It is for this reason that other oil companies agreed with the witnesses that a transfer fee was owed or the data returned. C. Certain Jury Instructions Were Legally Erroneous.

As stated above, based upon the plain language of the license agreements and the testimony of John Moye, Esq., the issue of merger is expressly addressed. Alternatively, if the jury did error by simply omitting Oil & Gas from Section A intending to find just as they did in section B, Defendants argument fails again. Regardless, based upon the evidence presented at trial regarding these licenses agreements, the Court's ruling on these instructions was appropriate. Defendants attempt to characterize these instructions as being pure error is based upon unsubstantiated speculation as to what the jury found. As provided for above, Defendants cannot say with a straight face that the jury's finding only relates to certain categories of PGI data and not others. Defendants have to make this argument so as to manufacture an appellate issue claiming the damages are unreasonable. D. The Court's Evidentiary Rulings Do Not Require a New Trial.

Again, in the interest of judicial economy, Plaintiff will decline the opportunity to reargue the response to the objection to the testimony of John Moye presented at trial. M.D. Mark stands in agreement with the Court's rulings and limiting instructions given. This issue was briefed and argued to death which is now ripe for appeal.

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Defendants' remaining arguments have been addressed above at length. Plaintiff requests that that argument be incorporated here. Furthermore, the Jury Instructions provided that the jury was free to accept all, part, or none of the expert testimony presented. Obviously, the jury rejected Mr. Kramer's opinion and accepted the other defenses witnesses such as Ann Lane or Plaintiff's witnesses all of whom testified that $1,000 to $1,400 per mile was the appropriate license fee. CONCLUSION For the reasons stated above, M.D. Mark, Inc. respectfully requests the Court deny Defendants' Motion for Judgment as a Matter of Law and/or to Amend the Judgment against Kerr-McGee Corporation. Defendants have not met their burdens of proof on each issue.

Accordingly, Defendants Motion should be denied. DATED: November 2, 2007. Respectfully submitted, PELZ, BONIFAZI & INDERWISH, P.C. s/ Harlan P. Pelz Harlan P. Pelz Daniele W. Bonifazi 1873 South Bellaire Street, Suite 1401 Denver, CO 80222 Telephone: 303-691-5600 Facsimile: 303-691-5606 ATTORNEYS FOR PLAINTIFF CERTIFICATE OF SERVICE I hereby certify that on the 2nd day of November, 2007, a true and correct copy of the foregoing PLAINTIFF'S RESPONSE TO DEFENDANTS' RENEWED MOTION FOR 22

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JUDGMENT AS A MATTER OF LAW PURSUANT TO RULE 50(b) OR ALTERNATIVELY, MOTION FOR NEW TRIAL, FOR REMITTITUR, AND/OR TO ALTER AND AMEND THE JUDGMENT PURSUANT TO RULE 59(e) was faxed and placed in the United States Mail, postage prepaid, addressed as follows: M. Antonio Gallegos, Esq. Scott S. Barker, Esq. Gregory E. Goldberg, Esq. HOLLAND & HART, LLP 555 Seventeenth Street, Suite 3200 Post Office Box 8749 Denver, CO 80201-8749 303-295-8261 Fax

s/ Allison E. Goldstein Allison E. Goldstein

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