Caterpillar hit with $73.6 million trade secrets verdictReprints
(Reuters) — Caterpillar Inc. was ordered to pay $73.6 million in damages in a lawsuit by a former supplier that accused the equipment manufacturer of misappropriating its trade secrets.
A federal jury in Chicago on Friday awarded the damages to Miller UK Ltd., a British manufacturer whose case drew attention because the company funded its suit with financing from third-parties not involved in the dispute.
The verdict was confirmed on Monday by Reed Oslan, a lawyer for Miller, which filed the lawsuit in 2010.
Caterpillar spokeswoman Rachel Potts said the company was disappointed by the verdict and was considering its next steps.
According to the lawsuit, Miller had long supplied Caterpillar with a device called a coupler that enables the operator of a hydraulic excavator to attach tools such as buckets and hammers.
In 2008, Caterpillar developed its own coupler product and moved to end its supply agreement with Miller.
Miller said Caterpillar’s product was based on confidential information it supplied and accused the company of misappropriating its trade secrets.
The case was noted in legal circles because of how Miller, a family-owned business with 100 employees, financed the litigation through third-party funding.
The case is one of a growing number in which hedge funds and other financial firms provide funding for lawsuits in exchange for a cut of any damages.
Such financing is controversial in the United States, where the U.S. Chamber of Commerce argues it promotes frivolous suits and supporters say it helps plaintiffs who otherwise could not afford to pursue their cases.
Court documents indicate Miller received financing from Juris Capital L.L.C., a privately held commercial litigation funding firm in Chicago, and Highland Park, Illinois-based Arena Consulting L.L.C.
David Desser, Juris Capital’s managing director, said in a statement he was “pleased with the jury verdict and very happy for the Miller family.”
Miller plans to seek interest and attorneys fees on top of the $73.6 million verdict, which could bring the award to more than $100 million, Mr. Oslan said.
Mr. Oslan, a partner at the law firm Kirkland & Ellis L.L.P., declined to say how much of the award Juris or Arena are eligible to receive.
He said the family that owns Miller plans to use its funds to repay debts, shore up the business and rehire employees.