General

Trade secret dispute settles for $61M

In the course of operating a successful business it is not uncommon for businesses to protect certain types of information that it relies upon to run. Called trade secrets, it is important for businesses to keep this information private. In many cases businesses use contracts to keep other parties from disclosing it. When intellectual property is taken and used without permission, the party to which it belongs may take legal action.

This was the case with a long running dispute involving an investment research company, Morningstar, and a software company, Business Logic. The dispute arose after the investment research company purchased another business, Ibbotson, which years earlier had a contract with Business Logic to use its software. After the acquisition of Ibbotson in 2006, Morningstar then created its own software. Business Logic accused the two other businesses of using its trade secrets, previously acquired by Ibbotson, to develop the new software.

Business Logic filed a lawsuit regarding the matter in 2009. Though the other two businesses to the action initially fought against the claim, recently the matter was settled. Business Logic will receive $61 million from Morningstar. Interestingly, as a result of the settlement, Morningstar will not have to stop using its software. In exchange, Morningstar has secured a license to use the intellectual property.

Trade secret disputes are only one of many types of disagreements that could arise involving businesses. Because these disputes can be expensive for businesses involved, regardless of the dispute type, it is important to work with a business lawyer to resolve the matter.

Source: NASDAQ, “Morningstar To Pay Business Logic $61 Mln To Settle Dispute,” July 17, 2014

Mon Aug 27, 1:38pm