Ford gets trade secrets damages slashed from $105m to $3
The car maker convinces a US federal judge to overturn an earlier jury decision which favoured a software provider | Court finds that Versata “forced the jury to rest its damages awards on nothing more than speculation”.
Ford Motor Company has convinced a US federal judge to reverse a jury trial decision in which it was ordered to pay almost $105 million to an automotive software provider in a trade secrets spat.
Versata Software sued the car maker in 2015 for breach of contract and misappropriation of trade secrets over its Automotive Configuration Management (ACM) software, which Versata licensed to Ford for approximately 10 years.
The two parties had attempted to negotiate a renewal of the annual licence for the ACM software in mid-2014, but were unable to reach an agreement and negotiations “ultimately broke down”. Ford subsequently decommissioned Versata’s ACM software and developed its own version internally.
Texas-based Versata and two co-plaintiffs (Trilogy Development Group, and Trilogy) accused the car maker of continuing to use its software after their contract had expired. The damages claimed were based on the assertion that Ford would have paid at least $17 million per year to use the software after the contract’s expiry.
Versata won the case in October 2022, after a Michigan jury found against Ford and ordered it to pay Versata damages of $82,260,000 for breach of contract, and $22,386,000 for trade secret misappropriation. This amounted to about 85% of what Versata had asked the jury to award.
The company originally filed seven legal claims against Ford. Three of those claims were for breach of contract, and four were for theft of trade secrets. Versata prevailed on six out of those seven claims.
But Michigan-based Ford filed a motion for judgment on the matter in February, which was partially granted yesterday, Monday, May 1 in the US District Court for the Eastern District of Michigan.
Damages ‘speculation’
Ford argued in its motion that Versata did not provide sufficient evidence of breach of contract, and did not present sufficient evidence to enable the jury to calculate damages accurately.
While Judge Matthew Leitman disagreed with the first contention, he agreed with the second, saying that Versata did not present sufficient evidence for the jury to quantify damages in compliance with Michigan law and “forced the jury to rest its damages awards on nothing more than speculation”.
“Versata’s experts never explained to the jury how to calculate the amount of Versata’s breach of contract damages,” he wrote. “Nor did any lay witness for Versata ever testify that Versata suffered a particular amount of contract damages. In fact, no Versata witness offered even a rough approximation as to the amount of contract damages that Versata suffered.
“Likewise, Versata did not introduce into evidence any documents reflecting a calculation of its breach of contract damages. Without any of this evidence, the jury had no way to calculate Versata’s claimed breach of contract damages with reasonable certainty.”
Judge Leitman reduced Versata’s contract damages to just $3, and invited Ford to submit a proposed judgment reflecting the court’s ruling by May 19, 2023.
WIPR has approached both parties for comment, without immediate response.
