Versata Software v. Ford Motor Co. — Federal Circuit Reinstates $82M Jury Award and Opens Door to Unjust Enrichment Damages for Trade Secret Misappropriation

Background

Ford hired Versata Software (formerly Trilogy Software) to develop vehicle configuration software — the Automotive Configuration Manager (ACM) and Materials Cost Analytics (MCA) — that allowed Ford to efficiently configure vehicles and analyze part costs. In 2004, Versata licensed this software to Ford under a Master Subscription and Services Agreement (MSSA). When the MSSA was set to expire in 2014 and the parties could not agree on renewal terms, Ford released its own replacement software, called PDO, which it had developed while still licensing Versata’s software.

Versata sued Ford for trade secret misappropriation under both the federal Defend Trade Secrets Act (DTSA) and Michigan’s Uniform Trade Secrets Act (MUTSA), as well as breach of contract. After a 2022 jury trial, the jury found Ford liable on both claims, awarding $22.4 million for trade secret misappropriation and $82.3 million for breach of contract. But the district court slashed both awards — reducing the trade secret damages to $0 and the breach of contract damages to just $3 — finding that Versata had not presented sufficient evidence for the jury to calculate damages.

The Court’s Holding

The Federal Circuit issued a sweeping decision in Versata’s favor, addressing three major issues in this precedential opinion.

Unjust enrichment damages are available as a matter of statutory right. The court held that the district court fundamentally erred when it confined Versata to a reasonable-royalty damages model based solely on the parties’ licensing history. Both the DTSA and MUTSA expressly allow plaintiffs to recover unjust enrichment damages — the value a misappropriator gained from using the stolen trade secrets — in addition to actual losses. The court found support in decisions from the Sixth, Tenth, and Eleventh Circuits, all of which recognized unjust enrichment as a separate and available remedy for trade secret misappropriation. As the Tenth Circuit noted in Russo v. Ballard Medical Products, “the party that acted wrongfully must assume the risk it took by misappropriating rather than licensing” the trade secret. The Federal Circuit vacated the trade secret damages judgment and remanded for a new trial, instructing the district court to reconsider the two damages models it had previously excluded.

The $82.3 million breach of contract verdict is reinstated. The court reversed the district court’s reduction of the jury’s $82,260,000 breach of contract award to $3. Versata had presented clear evidence at trial: three damages calculations based on the parties’ licensing history ($10.95M, $14.95M, and $17M per year), multiplied by 7.5 years of Ford’s breach. The jury’s award — approximately $10.97 million per year — fell squarely within the range supported by the proof. Both Versata’s expert and Ford’s own damages expert acknowledged the $10.95 million base license fee as a reasonable starting point. The court held the district court’s contrary conclusion was error.

Trade secret liability affirmed. Ford cross-appealed, arguing that Versata failed to show Ford had specific knowledge of the particular “combination” trade secrets at issue (Grid, Buildability, and Workspaces). The Federal Circuit rejected this argument, holding that neither the DTSA nor the MUTSA requires a misappropriator to have known the exact composition of a combination trade secret. Expert testimony and documentary evidence — including user guides, technical presentations, and the software itself — provided sufficient evidence that Ford acquired knowledge of Versata’s trade secrets.

Key Takeaways

• Trade secret plaintiffs have a statutory right to unjust enrichment damages. Courts cannot categorically limit trade secret plaintiffs to a reasonable royalty based on licensing history. Both the DTSA and state UTSA statutes expressly allow recovery of the misappropriator’s unjust enrichment — the value they gained — not just what a license would have cost.
• Jury verdicts on damages deserve deference. When a jury’s award falls within the range supported by evidence at trial, appellate courts will reverse a district court’s post-trial reduction. Mathematical certainty is not required — reasonable certainty suffices under Michigan law.
• Combination trade secrets do not require proof of specific knowledge. A trade secret defendant need not have known the exact elements of a combination trade secret. Knowledge that confidential information was acquired under circumstances giving rise to a duty of secrecy is sufficient.
• Software companies that develop replacements while licensing a competitor’s product face significant exposure. Ford’s decision to build PDO while still licensing Versata’s software — and its failure to renew the MSSA — resulted in both trade secret and contract liability potentially exceeding $100 million.

Why It Matters

This precedential decision is a landmark ruling for trade secret damages law. By affirming that unjust enrichment damages are available as a statutory right under both the DTSA and state trade secrets acts, the Federal Circuit has aligned itself with a growing circuit consensus that significantly expands the potential recovery for trade secret plaintiffs. Companies that misappropriate trade secrets can no longer argue that damages should be capped at what a license would have cost — they must account for the full value they derived from the stolen secrets.

The decision also sends a strong signal about jury verdicts. When a jury hears weeks of testimony and renders a carefully calculated damages award that tracks the evidence presented at trial, district courts should not substitute their own judgment. The reinstatement of the $82.3 million verdict underscores that juries remain the primary fact-finders on damages questions. For technology companies and software developers, the case is a cautionary tale about the risks of developing competing products while still under license — the overlap between trade secret and contract exposure can be enormous.