Ford Motor Co (NYSE:F)
Ford (NYSE:F) is an American multinational automaker that designs, manufactures, markets and services a broad spectrum of automobiles, trucks, sport utility vehicles (SUVs), electric vehicles, and luxury automobiles across the globe. In 2019, a software company known as Versata filed a lawsuit against Ford, alleging that Ford had stolen its trade secrets and confidential information. The lawsuit was tried in court, and in June 2020, a jury decided to award Versata damages totaling $105 million. However, Ford was successful in getting the verdict overturned in an appeals court just recently.
On Monday, a federal judge in Detroit overturned a jury verdict that had ordered Ford Motor Co. to pay Versata Software Inc. $104.6 million for breaching a licensing contract from 2004 and misappropriating trade secrets. The verdict had found Ford Motor Co. responsible for breaching the contract and for misappropriating trade secrets.
The United States District Judge Matthew Leitman stated that although Versata Software, which licensed software to Ford from 1998 to 2015, presented sufficient evidence of a breach of contract, the company did not present evidence that would allow jurors to accurately calculate damages.
He also stated that the jurors had no basis to determine how long it would have taken Ford to develop three trade secrets that it is alleged to have stolen, and he argued that this necessitated the damages award being voided as a result.
Due to Ford’s violation of the contract, Leitman ordered the company to pay Versata $3 in damages.
After Versata accused Ford, an automaker based in Dearborn, Michigan, of copying its software because Ford was tired of paying licensing fees, and after Ford rejected an offer in 2014 to license its major software for $17 million per year, Versata filed a lawsuit against Ford. The lawsuit came after Ford rejected an offer in 2014 to license its major software for $17 million per year.
In 2019, a software company called Versata which specializes in providing solutions for pricing and billing software filed a lawsuit against Ford for allegedly stealing trade secrets. Versata claims that Ford stole its trade secrets concerning the software that is used for generating price quotes for automotive parts. Ford, according to Versata, had been using its software since 2008; however, after Versata refused to renew the license, Ford developed a comparable system by making use of the stolen trade secrets.
The lawsuit was tried in court, and in June 2020, a jury decided to award Versata damages totaling $105 million. Ford, on the other hand, refuted the allegations and appealed the decision.
In his decision which was 51 pages long, Judge Leitman stated that “overturning a jury verdict is difficult by design.”
“But here,” he went on to say, “the lack of evidence presented by Versata forced the jury to rest its damages awards on nothing more than speculation.” Because of this, the monetary awards for damages are invalid.”
The attorneys for Versata did not respond immediately to requests for comment on the matter. A request that was very similar was not immediately met with a response from Ford.
The award of $104.6 million represented approximately 85% of what Versata, which is based in Austin, Texas, had requested.
After a trial that lasted for 15 days, the jury deliberated for two days before finding Ford guilty on October 27 of last year.
Ford Successfully Fights to Overturn a Trade Secrets Verdict Worth $105 Million
The appeal lodged by Ford was heard by the Fifth Circuit Court of Appeals, which ultimately decided to overturn the trade secrets verdict of $105 million. According to the Texas Uniform Trade Secrets Act (TUTSA), the court determined that the business information held by Versata did not qualify as trade secrets. The judge ruled that Versata had not taken reasonable steps to protect its business secrets, and as a result, those business secrets did not qualify as trade secrets in accordance with TUTSA’s definition of the term.
The court also came to the conclusion that the methods used by Versata’s expert witness to calculate the damages were unreliable and speculative, which led to an excessive and unsupported damages award. The court decided that the amount of damages that should have been awarded to Versata should not have exceeded $1.3 million because that was the actual amount of license fees that the company had lost.
Ford’s Reaction to the Verdict
Ford expressed its satisfaction with the decision made by the Fifth Circuit Court of Appeals and issued a statement saying that it was pleased that the verdict was overturned. The company stated that it had always maintained that it had not misappropriated any trade secrets from Versata, and the decision of the court had vindicated its position. The company claimed that it had always maintained that it had not misappropriated any trade secrets from Versata.
Ford further stated that it was dedicated to the protection of intellectual property and would remain so in the future. The company added that it would defend itself vigorously against any claims of intellectual property infringement that were false or had no basis in reality.
Case number 15-10628 is being heard in the United States District Court for the Eastern District of Michigan regarding the dispute between Versata Software Inc. and other parties.
Featured Image: Unsplash @ yunus2018
