Starting a small business and growing it into a successful company is what many Colorado residents dream of. Although starting a company can come with a fair share of challenges and complex business transactions, small businesses are vital to our economy. When they become more and more successful, however, it is important that business owners are aware of the growing risks they may be faced with in a fiercely competitive market.
Recently, the owners of a small technology company called TechForward finally found the rewarding light at the end of a very long legal tunnel. For the past two years, the company had been fighting against the actions of the multi-billion dollar company Best Buy. TechForward had to sell their company assets to a third party and could have been crushed under the financial weight of the lawsuit, but ultimately, the small company prevailed. A jury recently awarded them $27 million in damages for Best Buy's malicious behavior.
The dispute started after Best Buy began working with TechForward on a buyback program that the smaller company had developed. By utilizing a highly-protected formula, the tech company could assign a value to an item that a consumer wanted to sell back to the retailer from which it was purchased if the consumer chose to participate financially in the appropriate plan.
Best Buy liked this strategy and gave it a trial run in some of their stores. Believing they were protected by a confidentiality agreement signed by both parties, TechForward gave Best Buy access to the buyback formula in the hopes of starting a mutually beneficial business relationship.
According to reports, Best Buy ended the relationship shortly after receiving the proprietary information from TechForward. They then launched their own buyback program, which was essentially the same as the one designed by the smaller company. Instead of backing down, TechForward moved ahead with a lawsuit suing Best Buy over misappropriated trade secrets.
A jury agreed that not only had Best Buy improperly used trade secrets, but they had done so maliciously and willfully. All told, the jury awarded $27 million to TechForward.
Source: TechCrunch, "TechForward Wins $27M In Lawsuit Against Best Buy Over Stolen Trade Secrets," Leena Rao, Dec. 5, 2012
- Fighting to protect the future of a business is essential, but it can also be intimidating. For more information on how our firm can assist growing companies in the complex legal issues that may come up, please visit our Colorado business litigation page.