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Best Buy Sued For "Misappropriating" Trade Secrets

By - Source: TechForward | B 34 comments

Electronics chain Best Buy will be required to pay $22 million in damages to start-up company TechForward for the improper use of trade secrets, a California jury decided on Wednesday. The company must also pay another $5 million in punitive damages.

California-based TechForward filed its lawsuit against Best Buy in the United States District Court for the Central District of California in 2011. The small start-up claimed that Best Buy misappropriated TechForward's trade secrets relating to TechForward's own "Guaranteed Buyback Program".

According to TechForward, its Guaranteed Buyback Program had been implemented with other national consumer electronics retailers around the country.

"Under the Guaranteed Buyback Program, the consumer electronic retailer's customers pay for the right to redeem newly purchased electronic devices at a future date in exchange for store credit that represents a percentage of the original purchase price that can be used toward the purchase of another device from the retailer," TechForward explained in a press release on Friday.

The lawsuit claimed that after months of working with TechForward to implement the program in Best Buy stores, the electronics retail chain canceled its deal, "misappropriated" TechForward's trade secrets, and launched its own buyback program in February 2011 without TechForward's involvement. Consumers were even introduced to the new buyback program in a Super Bowl ad the month before featuring Justin Bieber and Ozzy Osbourne.

"We are extremely pleased that the jury recognized Best Buy's misconduct, and we hope this verdict puts large companies on notice that there are real consequences to illegally exploiting start-up businesses like ours," stated TechForward's co-founders Jade Van Doren and Marc Lebovitz.

As of this writing, Best Buy had not issued a statement.

 

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  • 24 Hide
    alidan , December 8, 2012 9:43 AM
    can someone also sue them for stocking their shelves before fulfilling preorder obligations?
  • 23 Hide
    ddpruitt , December 8, 2012 11:37 AM
    I don't think anyone explained to the jury as to what a trade secret is. I can't imagine this being a big secret. Now breach of contract might be a different matter.
  • 18 Hide
    cookoy , December 8, 2012 12:29 PM
    Nothing secretive about a trade-in offer to entice a potential customer. I should sue the gov't for misappropriating trade secrets that guns kill.
Other Comments
  • 24 Hide
    alidan , December 8, 2012 9:43 AM
    can someone also sue them for stocking their shelves before fulfilling preorder obligations?
  • -6 Hide
    plekter , December 8, 2012 11:25 AM
    This is getting out of hand..
  • 23 Hide
    ddpruitt , December 8, 2012 11:37 AM
    I don't think anyone explained to the jury as to what a trade secret is. I can't imagine this being a big secret. Now breach of contract might be a different matter.
  • 14 Hide
    maddad , December 8, 2012 12:16 PM
    ddpruittI don't think anyone explained to the jury as to what a trade secret is. I can't imagine this being a big secret. Now breach of contract might be a different matter.

    I second that!
  • 18 Hide
    cookoy , December 8, 2012 12:29 PM
    Nothing secretive about a trade-in offer to entice a potential customer. I should sue the gov't for misappropriating trade secrets that guns kill.
  • 6 Hide
    spentshells , December 8, 2012 12:32 PM
    Good to see. Breach of contract as well.
  • 0 Hide
    freggo , December 8, 2012 12:42 PM
    Nothing really 'secret' about this.
    It's kinda like when you lease a car. They tell you upfront what it will cost you at the end of the lease if you want to buy it.

    So here they tell you upfront how much credit you get after, say 2 years, if you tradde in your box of chips.

    Not exactly Coca Cola formula or McD secret sauce kinda stuff.
    Especially to the tune of $27 Million which, as we all know, will come out of consumer's pockets eventually.

  • 12 Hide
    dweezled , December 8, 2012 1:00 PM
    Yet another reason not to shop at "Best" Buy (like we needed one)
  • 7 Hide
    A Bad Day , December 8, 2012 2:06 PM
    JacekRingGuns don't kill people, police officers armed with guns kill people.


    Head to Detroit's slums. There aren't that many police officers there.
  • 0 Hide
    stingstang , December 8, 2012 2:37 PM
    So then what does Gamestop do other than exactly this?
  • 1 Hide
    elbert , December 8, 2012 3:21 PM
    Doesn't EVGA's buyback program predate this by a decade? Not sure how a trade secret on a buy back program would be worth this much.
  • 1 Hide
    kinggraves , December 8, 2012 3:31 PM
    A Bad DayHead to Detroit's slums. There aren't that many police officers there.


    Obviously, those places are dangerous! The officers could be at risk serving and protecting Detroit. Much safer to sit on the freeway with a radar gun and write speeding tickets to soccer moms.

    Oh wait this article is about BB, not police. Yeah good riddance. I remember back when Circuit City were the con artists and BB were the good guys. Seems like all the CC management went to manage Best Buy or something. How about we also sue them for the damage their lying sales reps do to the market in general by convincing people Apple and Sony are better brand names than cheaper alternatives.
  • 13 Hide
    Anonymous , December 8, 2012 4:20 PM
    It's not about creating a trade in program by observing the industry, BB actually hired these guys just long enough to take their systems, then dumped them before paying for it. A business's process IS a trade secret. BB could have simply created their own from scratch and been fine, but instead they got someone elses template via breech of contract resulting in theft of a trade secret.
  • 2 Hide
    Anonymous , December 8, 2012 4:53 PM
    Best Buy is not getting my Business, hell the Best Buy at Landmark Ctr. will only stock crappy PNY computer RAM, and when you go to the weekly ad, sometimes there will be corsair memory advertised, but will the Best Buy at Landmark Ctr. stock the better RAM, no, only PNY, PNY that does not work with any of my laptops, even though it is specified to do so! I had to go to Microcenter to get memory that works with my laptops! Goodby Best Buy!
  • 3 Hide
    jupiter optimus maximus , December 8, 2012 5:14 PM
    alidancan someone also sue them for stocking their shelves before fulfilling preorder obligations?

    Not possible today cause of Supreme Court decision on "AT&T Mobility v. Concepcion." So no more class-action lawsuit.
  • 7 Hide
    JonnyDough , December 8, 2012 6:10 PM
    I did a study on Best Buy in college and found that Best Buy's profiling practices were appalling. Needless to say that most of the time I can find what I'm looking for cheaper online anyway. I hope Best Buy goes the way of Circuit City.
  • 2 Hide
    Andy Chow , December 8, 2012 6:16 PM
    I think there has to be something specific not mentioned in this article. Probably in the technology used, or the model used for pricing. After all if it's as simple as some people claim why would the two companies be in working for months to implement it?
  • 14 Hide
    RealBeast , December 8, 2012 7:42 PM
    JonnyDough. . . I hope Best Buy goes the way of Circuit City.


    Hopefully, BB will stay in business. I love BB, I go there all the time to look at stuff. I never buy anything from them since they charge way too much and the employees have the technical knowledge of an onion, but if I want to play with a new TV or whatever before an Internet order the first place I go is BB.
  • -4 Hide
    bbemployee , December 9, 2012 8:00 AM
    bestbuy ain't going No where period! suck it up and find something more constructive to say instead of bashing on a company that you may had a bad expierencing in because you tried returning a product either out of the return policy or the ones that get mad because they think the employees don't know what they are talking about and we see you the next day pissed off but shamefully admitting that you indeed were wrong but to make yourself feel better you blame us the employees. these negative comments about bestbuy makes about 5% of what actually goes good in the stores! There's a lot more of what's in the media about bestbuy than you think! amazon just a Fad they lost money last quarter where we actually comp!
  • -4 Hide
    bbemployee , December 9, 2012 8:17 AM
    you know what people are entitled in spending there money how ever they want to spend there money. period if you feel robbed when you shop then so be it. If a customer comes in and buys a product we are not robbing them we offer 30 price matching now including amazon no restocking fees trade in blah blah blah I see it where if a customer walks out happy no matter what they had spent they did not get robbed. Amazon will save you money but does not provide you with a complete solution. You make yourself sound ignorant for the fact that you think we are robbing elderly do you think they are incapable of shopping for themselves? Maybe it's the fact that they don't know technology like you and I and want that service of being able to talk to an associate and find that proper full solution don't shop out of your own pocket.
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