Versata Software, LLC v. Ford Motor Company

Versata Software, LLC v. Ford Motor Company The Federal Circuit held that the district court legally erred by categorically precluding Versata from seeking unjust enrichment damages under the DTSA and MUTSA, which expressly authorize such recovery, and vacated the trade secret damages judgment for a new trial; the court also reversed the JMOL reduction of the breach-of-contract jury award from $82.26M to $3, reinstating the full verdict as supported by sufficient evidence. The court affirmed denial of Ford's JMOL on trade secret liability, holding that neither the DTSA nor MUTSA requires a plaintiff to prove a defendant's specific knowledge of each element of a combination trade secret. Counsel litigating trade secret misappropriation under the DTSA or state uniform trade secrets acts should note that unjust enrichment damages are a statutory right that cannot be categorically foreclosed by a court simply because the parties have a licensing history, and that combination trade secret claims do not require proof of a defendant's granular knowledge of each component of the combination. Affirmed-in-part (trade secret liability), reversed-in-part (breach-of-contract damages reinstated at $82.26M), vacated-in-part and remanded (trade secret damages for new trial with instruction to reconsider previously excluded unjust enrichment and value-based royalty models). The DTSA and MUTSA expressly permit unjust enrichment damages as an alternative or supplement to actual loss; the district court abused its discretion by confining Versata solely to a reasonable-royalty model tied to the parties' licensing history, which the Federal Circuit found was not compelled by Sixth Circuit precedent (Vitro Corp. or Mid-Michigan). On trade secret liability, neither the DTSA nor MUTSA imposes a heightened knowledge requirement that a defendant specifically knew the precise combination elements of a combination trade secret—consistent with the Sixth Circuit's rejection of a similar argument in Caudill Seed. The $82.26M breach-of-contract jury award was reinstated because Versata presented three licensing-history-based damages figures, expert testimony distinguishing base license fees from support fees, and the MSSA and its 2011 addendum—sufficient for the jury to calculate damages with reasonable (not mathematical) certainty under Michigan law. The Federal Circuit vacated the trade secret damages judgment and remanded for a new trial, instructing the district court to reconsider the two previously excluded reasonable-royalty models that incorporated value-to-Ford components beyond the parties' licensing history. Federal Circuit jurisdiction was proper notwithstanding dismissal of the patent claims, because the appeal arose from a final judgment in a case that originated with patent claims under 28 U.S.C. § 1295(a)(1). damages remand precedential standing / jurisdiction damages remand precedential standing / jurisdiction damages remand precedential