A federal appeals court has breathed new life into most of a blockbuster Detroit verdict against Ford, restoring $82.2 million of a roughly $104.6 million jury award that Versata Software won and sending the rest back to Michigan for another round. The ruling revives the bulk of the contract damages a Detroit jury ordered and reopens the thorny question of what, if anything, Ford must pay on Versata’s trade-secret claims.
The U.S. Court of Appeals for the Federal Circuit found that the jury had calculated breach-of-contract damages with reasonable certainty and reinstated the $82.2 million slice, while directing a fresh look at trade-secret damages, according to Reuters. The order follows a 2023 lower-court decision that had largely wiped out the jury’s work and cut Versata’s recovery down to a token sum.
A Detroit federal jury in October 2022 handed Versata about $104.6 million in total - roughly $82.26 million for breach of contract and $22.37 million for misappropriation of trade secrets - after a three-week trial, as reported by Law360. Versata has said it licensed its automotive configuration software to Ford from 1998 through 2015, then accused the automaker of copying elements of that system rather than continue paying millions of dollars in annual licensing fees.
U.S. District Judge Matthew Leitman set aside the jury’s awards in a May 1, 2023 opinion, concluding that the evidence did not allow jurors to calculate damages with reasonable certainty and entering only $3 in nominal damages, according to the Eastern District of Michigan decision. That move erased more than $100 million on paper and set the stage for Versata’s appeal to the Federal Circuit.
Appeals Court Salvages Contract Award, Kicks Trade-Secret Tab Back To Trial Court
On appeal, the Federal Circuit reinstated the contract portion of the verdict and sent the narrower trade-secret damages issue back for a new trial, Reuters reported. The panel said the record gave the jury enough to hang its hat on for the contract damages, but held that the value of the alleged stolen secrets requires a more precise, trade-secret-by-trade-secret analysis.
What Lawyers Are Watching In The Damages Fight
The decision highlights a familiar battleground in intellectual-property trials: courts may be relatively comfortable with contract-based loss models, but they insist on tighter, non-speculative proof for trade-secret awards. Bloomberg Law and the court record note that the trial judge excluded Versata’s expert because his all-or-nothing development-time model left jurors without a reliable way to price only the misappropriated components. The Federal Circuit said that problem has to be fixed before any trade-secret number can stick.
For Versata, winning back the contract award at the Federal Circuit leaves a sizable potential payout on the table and raises the odds that Ford may weigh settlement against the costs and risks of a new trial. The appeal remains active on the Federal Circuit’s docket, and the court posted oral-argument materials in mid-May on its public website, where the filing is listed on the Federal Circuit’s site.
Legal observers say the opinion will be closely read in both the auto and software worlds, because it illustrates how contract remedies can survive while trade-secret awards get pared back if the valuation work is not tightly tied to specific secrets, as discussed by McGuireWoods. For now, the case heads back to the Eastern District of Michigan, where the next steps - and the prospect of a do-over trial on trade-secret damages - will be worked out.
