Ford hit with $105M verdict over trade secrets

A federal jury in Michigan found Ford Motor Co. guilty of violating a contract and misuse of trade secrets, awarding Texas-based Versata Software $104.65 million on Wednesday after three weeks of trial testimony.

“While we respect the jury’s decision, we believe the facts and the law do not support this outcome. Ford will appeal the verdict,” spokeswoman Catherine Hargett told the Detroit Free Press on Thursday.

At issue is a 2004 contract between the two companies involving software Versata developed to manage how vehicle components are configured during assembly.

The jury determined that Ford misused confidential information, reverse-engineered Versata’s software for its own commercial use and used it without a license. Law360 first reported the verdict.

The jury awarded $82.26 million for breach of contract and $22.39 million for misuse of trade secrets, according to the jury verdict form reviewed by the Free Press.

‘Stabbed in the back’

The verdict signals to companies that theft has consequences, said Dan Webb, attorney for Versata.

“When you have a company, like Versata, that has expended so much effort in developing intellectual property and software for a company to use, that software still belongs to, in this case, Versata. They built the software,” said Webb, who is with Winston & Strawn in Chicago. “For Ford to have stolen the software of Versata’s just so they could make a competing product and then no longer have to pay license fees to the software owner, that is a serious act of misconduct that we just can’t allow to go on.”

Ford hired Versata in the late 1990s to develop software intended to address issues that had led to costly recalls, he said.

“The companies reached a 15-year contract for Ford to use the software in 2004, but Ford ended the agreement in 2014, saying it had developed its own software,” Law360 reported. “Webb said he told the jury that Versata later discovered that Ford ‘stabbed us in the back,’ and that the software it had secretly developed incorporated Versata’s trade secrets.”