Florida residents have probably heard about Best Buy’s buy-back program. Essentially, it allows customers to purchase a plan that lets them sell their appliance back to Best Buy for a portion of the purchase price. The idea is that the customer will then use the money earned from the buy-back to buy a new item.
But a California company called TechForward Inc. thought the specifics of Best Buy’s plan sounded awfully familiar, so it sued, alleging that Best Buy had infringed on its trade secret with the buy-back program.
A jury agreed and awarded TechForward $27 million.
A trade secret is information that is important for a company’s business, is kept reasonably secret by that business and derives some economic value from not being generally known.
Best Buy has denied that it lifted its idea for the buy-back program from TechForward and has said it will appeal the award of $22 million in compensatory damages and $5 million in punitive damages.
An analyst noted that the award is not large enough to hurt Best Buy financially, but also pointed out that the company is struggling in the eyes of the consumer, so any bad PR right now is a very unwelcome development.
Intellectual property elements, like trade secrets, are something we work with in our Naples office. Many business owners are interested in making sure they have secured the proper protections, so we have experience helping these businessmen and -women achieve their goals in that regard.
For further information on intellectual property law and how it intersects with business, please feel free to revisit our blog. We update it at least once a week with fresh, relevant information.
Source: Bloomberg Businessweek, “California tech company awarded $27 million in Best Buy trade-secret judgment,” Dec. 7, 2012