Best Buy Sued For "Misappropriating" Trade Secrets

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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  • alidan
    can someone also sue them for stocking their shelves before fulfilling preorder obligations?
  • plekter
    This is getting out of hand..
  • ddpruitt
    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.
  • maddad
    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!
  • cookoy
    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.
  • spentshells
    Good to see. Breach of contract as well.
  • freggo
    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.

  • dweezled
    Yet another reason not to shop at "Best" Buy (like we needed one)
  • A Bad Day
    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.
  • stingstang
    So then what does Gamestop do other than exactly this?