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Saturday, February 27, 2021

Fort Worth company wins trade secret lawsuit

Fort Worth-based telecom company, XIP LLC, has been awarded at least $10 million in damages and now inches closer to winning up to $30 million in its trade-secret lawsuit against a Plano-based company.

A Tarrant County jury returned a verdict in favor of XIP on May 6, after hearing 10 days of testimony regarding CommTech Sales LLC’s unlawful use of XIP-acquired generator interface technology and trademark.

XIP makes generators for the wireless telecommunications industry.

According to a court petition filed by XIP in 2015, CommTech and its owner Michael McGraw “committed fraud” to obtain designs, specifications, drawings, photographs and related documents to manufacture and sell products that were the intellectual property of XIP.

The generator interface units were originally designed by the engineering team of Mark Henderson and Kyle Smith. Henderson’s father, J.K. Henderson, had financed the product development, so, the intellectual property of the product was assigned to his name.

The trademarked MTC technology that they created was developed by Micrin Technologies and later acquired by XIP. The technology provides alternative sources of power during electrical outages caused by extreme weather and other unforeseen events.

J.K. Henderson, in 2010, gave consent to United States Radio Frequency Corporation (USRF) to produce its own line of products utilizing the intellectual property.

McGraw was a salesman for USRF and also his own sales company, CommTech, at that time. McGraw approached J.K. Henderson and falsely claimed that he had an existing contract with AT&T for generator panels and wanted to use Henderson’s generator designs, according to the petition.

McGraw offered a token fee of $3 per generator panel sold by CommTech. CommTech did end up selling thousands of generators but did not pay any fee to the Henderson family business.

Attorneys from Boyd, Powers & Williamson — who represent XIP and the Hendersons in the case — presented evidence that CommTech misappropriated the MTC trademark, as well as industrial designs and trade secrets.

The attorneys are seeking profits from CommTech ranging from $12 million to $21 million and punitive damages of $8 million.

“This verdict shows you can’t infringe on another company’s intellectual property rights and expect to get away with it,” said XIP attorney Derrick Boyd of Boyd, Powers & Williamson. “We are grateful for the jurors’ attention in this case and their decision in favor of our client.”

In the verdict, all the 12 jurors unanimously agreed that CommTech infringed on the MTC trademark.

The final judgment will be determined by the 348th District Court in Tarrant County, based on the jury’s findings.

“Intellectual property laws are vital for engineers and developers like us,” said Mark Henderson who developed the MTC products at issue in the case. “This verdict allows XIP to continue to use this proprietary technology free from unfair competition.”

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