Reporting Cherri Gregg
By Cherri Gregg
PHILADELPHIA (CBS) – Two of Philadelphia’s most well-known innovators/investors, Josh Kopelman and Howard Morgan, were in on a deal with Best Buy that went south. They sued and won big, slapping the big box retailer with a $27 million jury verdict.
Josh Kopelman and Howard Morgan were investors in TechForward. The small technology start-up developed a new method for a Buy Back program that allowed customers with obsolete tech gadgets to upgrade to newer models. Attorneys Erik Leon and Joe Serino of Kirkland & Ellis say retailers were clamoring over the concept.
Eventually, Best Buy took notice, launching a pilot program with the start up. All went well and the two signed confidentiality agreements and launched a 12-store pilot in California.
“We thought we had a reputable partner with whom we could do business, with whom we could trust,” says Serino. “We took Best Buy at their word and shared our trade secrets with them.”
But after Techforward shared the secret sauce of their innovation, the deal went south.
“Best Buy then kicked Tech Forward to the curb, took Techforward’s trade secrets and used them to develop their own by-back program,” says Leon.
TechForward sued, but ended up get bought after retailers scrambled. The jury awarded TechForward $22 million in damages and another $5 million in punitives.
“We did everything we could to protect our trade secrets,” says Serino. “This award proves innovators have a protectable interest in their ideas and innovations.”
Best Buy says it disagrees with amount of the award given the facts. It plans to challenge the verdict.