Southfield, Michigan – An auto parts supplier based in Markham, Ontario has won an appeal upholding a US$10 million jury award levied against another parts supplier regarding the production of components for Chrysler vehicles.
Markham-based Multimatic, Inc. had been awarded the verdict over French-based Faurecia Interior Systems USA for the breach of a confidentiality agreement. The U.S. Court of Appeals for the Sixth Circuit has affirmed the award.
The lawsuit involved the supply of cross-car beams for the Chrysler Stratus and Sebring models. Chrysler awarded Faurecia the supply of the instrument panel. In turn, Faurecia asked Multimatic to design the cross-car beam that runs under the panel. Multimatic designed and developed the beam on the understanding that it would be the production source.
Before disclosing its proprietary design, Multimatic demanded that Faurecia sign a confidentiality agreement to protect the intellectual property and technology inherent in the design. The lawsuit said that Faurecia signed the agreement in February 2004, but in April 2005, it secretly took the design to market for a bid from Multimatic’s competitors, in violation of the terms of the agreement. After receiving quotes from other companies, Faurecia demanded that Multimatic lower its price to produce the beam, and asked for $200,000 as an “entry ticket” to supply the parts to Faurecia. When Multimatic refused, Faurecia gave the design to a competitor, awarding it the production purchase order for the Sebring contract. It was this act, and Multimatic’s resulting loss of profits on the order, that the jury punished.
In September 2007, the case was tried before a jury, which asked for $9,981,821 for Multimatic’s lost profits.
“This decision is a multi-million-dollar reminder about the perils of stealing valuable intellectual property,” said Steven Susser, Multimatic’s attorney. “The court has affirmed that theft is theft, whether it be a $10 million Picasso or a $10 million idea.”
The U.S. Court of Appeals affirmed the verdict, and said that Multimatic was entitled both to damages for the work it actually performed, and for the loss of profits it would have earned had it been awarded the Chrysler purchase order.