IP Law Daily, TRADE SECRETS—Fed. Cir.: Software developer Versata should have been allowed to pursue unjust enrichment damages on trade secret misappropriation claims against Ford, (May 26, 2026)

By Robert Margolis, J.D.

Court vacates district court’s post-trial judgment as a matter of law that reduced to $0 Versata’s damages for trade secret misappropriation, and remands for new trial on damages.

The federal district court in Michigan erred when it precluded Versata Software, LLC, from pursuing damages measured by the amount Ford Motor Company was unjustly enriched after a jury found that Ford misappropriated Versata’s trade secrets, the United States Court of Appeals for the Federal Circuit has held. The jury had awarded Versata $22,386,000 for trade secret misappropriation based on the parties’ licensing history, which the district court reduced to $0 in granting Ford’s motion for judgment as a matter of law (JMOL). The appellate court held that the district court’s improper refusal to consider unjust enrichment damages tainted the damages portion of the trial, and therefore vacated the JMOL and remanded for a new trial on damages. The appellate court cited the plain language in the statutes Versata brought claims under, the federal Defend Trade Secrets Act (DTSA) and the Michigan Uniform Trade Secrets Act (MUTSA), both of which allow for unjust enrichment damages for trade secret misappropriation that is not accounted for when calculating damages for actual loss. The appellate court also reversed the district court’s JMOL reduction of Versata’s breach of contract damages to $3, rejecting the district court’s determination that there was insufficient evidence for the jury’s award of $82,260,000. Finally, the appellate court affirmed the denial of Ford’s JMOL motion as to liability (Versata Software, LLC v. Ford Motor Co., No. 24-1140 (Fed. Cir. May 22, 2026)).

Software license. The lawsuit arose out of the expiration of a license agreement between Versata and Ford, for two pieces of computer software that would allow Ford to more efficiently enable vehicle configuration: the Automotive Configuration Manager (ACM) and Materials Cost Analyzer (MCA). In 2004, Versata licensed the software to Ford and they entered into a Master Subscription and Services Agreement (MSSA). When the MSSA expired in 2014, instead of renewing it Ford released its own manufacturing configuration software (PDO), which it developed while licensing software from Versata.

Lawsuit. After releasing PDO, Ford sought a declaratory judgment that it had not infringed Versata’s intellectual property or misappropriated its trade secrets. Versata counterclaimed for trade secret misappropriation under both the DTSA and MUTSA, and for breach of contract under Michigan law. During pre-trial proceedings, in the context of precluding testimony from Versata’s damages expert, the district court limited Versata’s recovery of damages “to a reasonable royalty model of damages that is based upon the parties’ relevant business history,” and precluded Versata from seeking damages based on the value of benefits Ford obtained by allegedly using Versata’s trade secrets in its PDO software.

A jury trial was held and the jury found that Ford breached the MSSA and misappropriated three Versata trade secrets. It awarded Versata $22,386,000 for trade secret misappropriation based on the parties’ licensing history and $82,260,000 for breaching the MSSA. After trial, Ford moved for a JMOL on liability and damages. The district court upheld the verdict on liability for trade secret misappropriation and breach of contract, but reduced both damages awards as noted above. The parties each appealed.

Misappropriation damages. The appellate court held the district court abused its discretion when it precluded Versata from seeking damages under an unjust enrichment theory. The district court had reasoned that unjust enrichment damages are only appropriate when the trade secret damages are not “subject to exact measurement,” and because the parties had a licensing history to use for valuing the damages to Versata, there was no basis for seeking alternative forms of damages. But on appeal, Versata argued that under the plain language of the DTSA and MUTSA, it has a statutory right to seek such damages, and the appellate court agreed. The DTSA states a court may award, inter alia, “damages for any unjust enrichment caused by the misappropriation of the trade secret that is not addressed in computing damages for actual loss[.]” 18 U.S.C. § 1836(b)(3)(B)(i)(II). Similarly, the MUTSA states that damages may include “both the actual loss caused by the misappropriation and the unjust enrichment caused by misappropriation that is not taken into account in computing actual loss.” Mich. Comp. Laws § 445.1904.

In addition to highlighting the plain language of the relevant statutes, the appellate court cited decisions from the Sixth Circuit, Tenth Circuit, and Eleventh Circuit, all holding that unjust enrichment damages are appropriate in trade secret misappropriation cases. The district court had relied on two Sixth Circuit cases where the parties’ licensing history was used to calculate damages, but as the appellate court pointed out, in neither of those cases did the court preclude unjust enrichment damages.

Because the district court’s preclusion of unjust enrichment damages impacted Versata’s ability to seek damages throughout the case, including at trial and in post-trial proceedings, the appellate court partially vacated the JMOL to the extent it reduced to $0 the jury’s damage award for the trade secret misappropriation claims, and remanded for a new trial for damages for trade secret misappropriation.

Contract damages. The district court had found insufficient evidence to support the jury’s $82,260,000 award to Versata for Ford’s breach of the MSSA. But the award approximated the $10.95 million base license fee for the MSSA in the final year of the license, multiplied by 7.5, representing the number of years that Ford breached the MSSA through trial. The record included evidence from Versata’s expert explaining how the base license fee can be separated from fees for extended support and service, along with the original version of the MSSA, and testimony from Ford’s own expert acknowledging that $10.95 million figure. Finding this evidence sufficient to support the jury’s verdict, the appellate court reinstated the $82,260,000 award.

Liability. Ford argued it was entitled to JMOL on liability because Versata failed to show that at the time of disclosure or use of the trade secrets, Ford knew of the specific combination of trade secrets at issue. Because neither the DTSA nor the MUTSA requires a plaintiff to show a defendant knew the specific elements of combination trade secrets, the appellate court affirmed the district court in denying JMOL on liability. The court quoted the two statutes’ definitions of misappropriation, 18 U.S.C. § 1839(5) and Mich. Comp. Laws. § 445.1902(b)(ii)(A)-(B), and noted neither requires specific knowledge of the combination trade secret elements. Moreover, there was evidence that Versata did disclose the ACM combination trade secrets to Ford, in the form of manuals and presentations given to Ford’s engineers and other employees.

The Case is No. 24-1140.

Judge: Hughes, T.

Attorneys: Jeffrey A. Lamken (Mololamken LLP) for Versata Software, LLC. Jessica Lynn Ellsworth (Hogan Lovells US LLP) for Ford Motor Co.

Companies: Versata Software, LLC; Ford Motor Co.

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