Best Buy Ordered to Pay $27 Million After Stealing Trade Secrets
Published on: 8th Dec 2012
Note -- this news article is more than a year old.
Struggling US consumer electronics retailer Best Buy has been ordered pay USD22 million in damages after a court found that it had made improper use of trade secrets owned by a tech start up TechForward.
The jury determined that Best Buy's conduct was willful and malicious. The court also awarded TechForward an additional $5 million in punitive damages.
The case related to TechForward's Guaranteed Buyback Program, which had been implemented with other national consumer electronics retailers around the country.
Under the Guaranteed Buyback Program, the consumer electronic retailer's customers pay for the right to redeem newly purchased electronic devices at a future date in exchange for store credit that represents a percentage of the original purchase price that can be used toward the purchase of another device from the retailer.
TechForward claimed that Best Buy, after months of working with TechForward to implement the program in Best Buy stores, misappropriated TechForward's trade secrets and launched its own buyback program without TechForward.
Best Buy announced the launch of its program in February 2011 with great fanfare with a Super Bowl commercial featuring Justin Bieber and Ozzy Osbourne.
Jade Van Doren and Marc Lebovitz founded TechForward in 2006. Major investors included leading venture capital firms New Enterprise Associates and First Round Capital. TechForward was sold to SquareTrade in April 2012. The original TechForward investors retained the right to pursue the lawsuit against Best Buy.
Reacting to the jury award, TechForward's co-founders Jade Van Doren and Marc Lebovitz said in a statement, "We are extremely pleased that the jury recognized Best Buy's misconduct, and we hope this verdict puts large companies on notice that there are real consequences to illegally exploiting start-up businesses like ours."