4 minute read | July.19.2014
A new trade secrets settlement has shaken up our top 10 disclosed settlements of all time. Business Logic, a Chicago-based developer of financial software, reports that the investment firm Morningstar, Inc. has agreed to pay it $61 million to settle a trade secrets action.
According to Business Logic’s press release, the company alleged that Morningstar and its subsidiary, Ibbotson Associates, violated a contract and took Business Logic's intellectual property in a case involving software for managing 401(k) retirement accounts. (The press release incorrectly claims that Trade Secrets Watch has called this “the largest disclosed trade secrets settlements in Illinois history.” We have never made such a ranking.). Business Logic’s $61 million settlement is now the #9 biggest disclosed trade secret settlement of all time.
Litigation settlements can often be shrouded in secrecy, and trade secret litigation settlements are no different. Parties are often sworn to confidentiality, and court dockets are typically silent on the amount of settlements (or even on their existence). Trade Secrets Watch has tried to pull back the curtain, hunting for the biggest trade secrets settlements we could find. Although these settlements generally run smaller than the top 10 trade secret verdicts we brought you earlier, they are still quite substantial and confirm that trade secret cases can mean big money:
Rank | Amount | Settlement Payee | Case Name |
---|---|---|---|
#1 | $1.1 billion (VW agreed to pay $100 million and buy at least $1 billion of auto parts from GM) | General Motors Corp. | General Motors Corp. v. Lopez de Arriortua, 2:96-cv-71038-NGE, E.D. Mich. (Jan. 1997) |
#2 | $400 million paid by IBM to settle trade secret and antitrust claims (IBM agreed to license $140 million in Compuware software and buy $260 million in Compuware services) | Compuware Corp. | Compuware Corp. v. IBM Corp., 2:02-cv-70906-GCS, E.D. Mich. (Mar. 2005) |
#3 | $340 million paid by AT&T to settle trade secret, patent and bankruptcy claims relating to the failed “At Home” broadband business | Bondholders' Liquidating Trust | Multiple actions settled (May 2005) |
#4 | $290 million paid by Semiconductor Manufacturing International Corp. (SMIC) to settle trade secret, patent and breach of contract claims stemming from the 2005 settlement (see No. 5) | Taiwan Semiconductor Manufacturing Company (TSMC) | Multiple actions in California Superior Court and China settled (November 2009) |
#5 | $175 million paid by Semiconductor Manufacturing International Corp. (SMIC) to settle trade secret and patent claims | Taiwan Semiconductor Manufacturing Company (TSMC) | Multiple actions in U.S. District Court, California Superior Court, ITC, and Taiwan District Court settled (January 2005) |
#6 | $75 million paid by Hilton to settle trade secret, fraud, unfair competition, conversion, and multiple other claims | Starwood Hotels | Starwood Hotels & Resorts Worldwide v. Hilton Hotels Corp., 09-cv- 03862, S.D.N.Y. (Dec. 2010) |
#7 | $75 million paid by A10 in trade secret, patent and copyright action | Brocade Communications Systems | Brocade Communications Sys. Inc. v. A10 Networks Inc., 5:10-cv-03428, N.D. Cal. (Aug. 2012) |
#8 | $65 million cash paid by Alnylam Pharmaceuticals, plus $10 million promised in milestone payments, plus transfer of 150 patents and patent applications to Tekmira, plus royalty streams in future products | Tekmira Pharmaceuticals Corp. | Tekmira Pharms. Corp. et al. v. Alnylam Pharms. Inc., et al., 11-1010-BLS2, Business Litigation Session of the Massachusetts Superior Court (Nov. 2012) |
#9 | $61 million paid by Morningstar, Inc. | Business Logic | Business Logic Holdings v. Ibbotson Associates, 2009-CH-46687, Illinois Circuit Court, Cook County Law Division (July 2014) |
#10 | $44.5 million paid by Grumman Systems Support Corp. in trade secret and copyright action | Data General Corp. | Data General Corp. v. Grumman Data Systems, Inc., 4:93-cv-40087-NMG, D. Mass. (Oct. 1995) |