Federal Circuit Reinstates $82 Million Verdict Against Ford Motor Company and Revives Trade Secrets Unjust Enrichment Theory

The court concluded that the plain language of both the Defend Trade Secrets Act (DTSA) and the Michigan Uniform Trade Secrets Act (MUTSA) expressly allows a plaintiff to seek unjust enrichment damages and that Sixth Circuit precedent does not categorically foreclose that recovery theory. The court vacated the district court’s judgment, which had eliminated a $22 million jury award for trade secret misappropriation damages, and remanded for a new trial on damages.

Background

In 2004, Ford Motor Company hired Versata Software, LLC to develop car configuration software. Versata licensed the software to Ford under a licensing agreement that expired in 2014. Instead of renewing the agreement when it expired, Ford released its own software.

Ford then filed a declaratory judgment action asserting that it had not infringed Versata’s intellectual property rights or misappropriated its trade secrets. Versata counterclaimed for trade secret misappropriation under the DTSA and MUTSA and for breach of contract under Michigan common law. 

During pretrial proceedings, the district court excluded testimony from Versata’s damages expert, ruling that his unjust enrichment model improperly measured Ford’s total enrichment rather than its unjust enrichment. The district court concluded that Versata’s trade secret damages must be measured with reference to the parties’ licensing history and confined Versata to a reasonable-royalty model tied solely to that history. When Versata submitted three reasonable-royalty models, the court admitted only the one calculated solely on the parties’ licensing history. It excluded the other two because they included additional damages related to the value to Ford of using the trade secrets.

At trial, the jury found that Ford had misappropriated three trade secrets and breached the license agreement, awarding $22 million for trade secret misappropriation and $82 million for breach of contract. Ford filed a post-trial motion for judgment notwithstanding the verdict. The district court granted Ford’s motion on damages, reducing the trade secret award to $0 and the breach of contract award to $3, while denying Ford’s motion on liability. Both parties cross-appealed.

Case Information

Citation: Versata Software, LLC v. Ford Motor Company, – F.4th –-, 2026 WL 1449851 (Fed. Cir. 2026)

Plaintiffs: Versata Software, LLC fka Trilogy Software, Inc.; Versata Development Group, Inc.; Trilogy, LLC

Defendant: Ford Motor Company

Judges: Hon. Todd M. Hughes, writing for the Federal Circuit panel (Moore, Taranto, and Hughes)

Analysis

Preclusion of Unjust Enrichment Damages

The Federal Circuit held that the district court erred as a matter of law by precluding Versata from pursuing unjust enrichment damages for its trade secret misappropriation claims and remanded for a new trial on trade secret damages.

The court reasoned that the plain statutory language of both the DTSA and the MUTSA expressly permits recovery of unjust enrichment damages caused by the misappropriation of the trade secret that is not addressed in computing damages for actual loss. Specifically, the DTSA provides that a court may award “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). The MUTSA contains nearly identical language, providing that damages may include “both the actual loss caused by misappropriation and the unjust enrichment caused by misappropriation that is not taken into account in computing actual loss.” Mich. Comp. Laws § 445.1904.

The court also found persuasive support from the Sixth, Tenth, and Eleventh Circuits. In Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc., 53 F.4th 368, 392 (6th Cir. 2022), the Sixth Circuit recognized the availability of unjust enrichment damages under the Kentucky Trade Secrets Act, which uses language nearly identical to the MUTSA. In Russo v. Ballard Medical Products, 550 F.3d 1004, 1020–21 (10th Cir. 2008), the Tenth Circuit held that, under the Utah Trade Secrets Act — which includes the same language as the DTSA and MUTSA — a plaintiff has the express choice of seeking unjust enrichment damages to remedy trade secret misappropriation. Similarly, in Alabama Aircraft Industries, Inc. v. Boeing Co., 133 F.4th 1238, 1252–53 (11th Cir. 2025), the Eleventh Circuit relied upon Caudill and Russo to recognize unjust enrichment recovery as “separate and distinct” from a jury award for breach under the Missouri Trade Secrets Act, which also uses identical language to the DTSA and MUTSA.

The Federal Circuit further held that the district court had misread Sixth Circuit precedent. The district court relied on Vitro Corp. of America v. Hall Chemical Co., 292 F.2d 678 (6th Cir. 1961) and Mid-Michigan Computer Systems, Inc. v. Marc Glassman, Inc., 416 F.3d 505 (6th Cir. 2005) to conclude that damages must be based on the parties’ licensing history. The Federal Circuit disagreed, explaining that while the Sixth Circuit in those cases upheld royalty-based damages awards, neither decision categorically barred unjust enrichment as an available theory. 

The court also rejected Ford’s argument that the district court had merely excluded speculative damages rather than categorically barring unjust enrichment. The Federal Circuit found this characterization unpersuasive for two reasons. First, the district court expressly stated that Versata was confined to seeking damages directly tied to the parties’ licensing history. Second, the district court excluded two of Versata’s damages models solely because they were not tied to that history.

Because the district court’s preclusion of unjust enrichment damages impacted Versata’s ability to seek damages throughout the case, the court vacated the judgment that had zeroed out the jury’s $22 million trade secret damages award and remanded for a new trial on trade secret damages. The court also instructed the district court to reconsider the two previously excluded reasonable-royalty models.

Breach of Contract Damages

The Federal Circuit also reversed the district court’s reduction of the jury’s breach of contract award from $82 million to $3. At trial, Versata’s counsel presented three base damages amounts based on the parties’ licensing history: $17 million per year (what Versata offered to license its software after the agreement had expired), $14.95 million per year (what Ford paid in the final year of the agreement), and $10.95 million per year (the base license fee excluding support and maintenance). The jury’s award of $82 million equated to approximately $10.97 million per year over seven and a half years, which fell squarely within the range supported by the evidence. The court found that the jury had calculated damages with reasonable certainty under Michigan law, which does not require mathematical certainty, and that Versata’s and Ford’s expert testimony, the licensing agreements, and closing arguments all provided the jury with a reasonable basis from which to properly calculate damages.

Why It Matters

This case reinforces the importance of maintaining multiple damages theories in trade secrets litigation. By holding that the plain language of both the DTSA and state trade secret statutes expressly permits unjust enrichment damages, the Federal Circuit has provided strong appellate authority for plaintiffs seeking to recover the full value that a defendant derives from misappropriating trade secrets — not merely the value of the parties’ prior relationship.