Sears to Pay $25M for Stealing Rotozip
Verdict Hiked To $25M In Sears Trade Secrets Suit
Thursday, May 29, 2008 — Sears, Roebuck and Co. should pay more than
$25 million for stealing the invention for a popular power tool, a federal judge
decided Tuesday in upholding the jury’s verdict in the trade secrets case
against the retailer.
U.S. District Judge David H. Coar issued a final judgment in the Northern
District of Illinois upholding the $21.4 million jury verdict and adding $3.7
million in prejudgment interest.
He also denied post-trial motions from Sears for judgment as a matter of law
or for a new trial or reduction in damages.
“While the defendant certainly may not agree with the jury’s interpretation of
the evidence, the evidence itself was sufficient for a reasonable jury to reach
the verdict,†Judge Coar wrote.
In November, a federal jury in Illinois ruled Sears had misappropriated the
trade secrets of Wisconsin carpenter Bob Kopras and the company he
started 30 years ago in his basement, Roto Zip Tool Corp., now known as
RRK Holding Co.
The jury verdict included $11.7 million for actual losses, $1.7 million for
unjust enrichment and more than $8 million for punitive damages, according
to court documents.
In his ruling, Judge Coar found that the plaintiff also was entitled to interest
that he would have earned on the actual losses had it not been for Sears’
trade secrets misappropriation, and he tacked on another $3.7 million.
The judge also amended the actual losses and unjust enrichment amounts to
account for a calculation error, but the new figures did not change the total,
according to court documents.
Bob and Becky Kopras said in a statement issued by their attorneys that
“even though this has been a very long and tiring process, we hope this
verdict will send a message to corporations who attempt to steal innovations
from small entrepreneurs and will encourage entrepreneurs who have been
abused by these big corporations to take legal action and hold them
accountable for their wrongdoings.â€
A Sears representative could not be reached for comment Thursday.
The dispute dates back to the late 1990s, when Roto Zip was one of Sears’
major suppliers of the rotary saw.
In 1999, Kopras confidentially disclosed to Sears his drafts for a
next-generation, handheld combination power saw, but the parties could not
agree on a price and the retail chain passed on it.
Kopras continued developing the tool, unaware that Sears had secretly
commissioned a Chinese manufacturer to copy the design, breaching its
nondisclosure agreement with the carpenter, the jury was told.
The company unveiled its Craftsman Combination Tool — a two-in-one
router and spiral saw — in August 2001, a week after Kopras launched his
finished product.
The carpenter filed a lawsuit in the U.S. District Court for the Northern District
of Illinois in 2004, amending his complaint in May 2005.
Sears continued to sell a device using Roto Zip’s trade secrets after the suit
was filed, and sales of Roto Zip’s rotary saw dipped dramatically from $41
million in 2000 to $615,000 in 2003, the jury was told.
The jury found Sears guilty of willful and malicious trade secrets
misappropriation and breach of contract.
Kopras borrowed $20,000 to start up his power tool business in the
basement of his Wisconsin home in 1976. By 1998, with clients that included
Sears and Home Depot, Roto Zip had grown to report earnings of $50
million. The business was sold to Bosch Tool Co. in August 2003, but Kopras
retained the right to pursue his case against Sears.
Replies
way to kick golaths butt.the little guy wins. and i love the extra 4 mill the judge threw in. hope his lawyers don't get it all. larry
if a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
Didn't Sears also steal the push-button release for ratchet wrenches? Years ago. Lost on that one too, if I recall.
While "stealing" might be a bit strong a term, Sears certainly did BS a high school student, who worked for them one summer, and grossly misrepresented their interest. For such deceit ... as well as their continual meritless appeals, the courts hammered Sears many times. That was a 'patent' case. This one is described as a 'trade secret' case. I wonder what the exact issues were.... With the "Ratchet scandal," I divested myself of all Sears products - and maintain they position today. I will not knowingly deal with a thief. This story just goes to show you that a leopard can't change it's spots.
Technically it is "misappropriation" of trade secrets. It's commonly called "theft" of trade secrets. You can decide if "stealing" is too harsh a word...
This is part of the article:
In 1999, Kopras confidentially disclosed to Sears his drafts for a
next-generation, handheld combination power saw, but the parties could not
agree on a price and the retail chain passed on it.
Kopras continued developing the tool, unaware that Sears had secretly
commissioned a Chinese manufacturer to copy the design, breaching its
nondisclosure agreement with the carpenter, the jury was told.
The company unveiled its Craftsman Combination Tool — a two-in-one
router and spiral saw — in August 2001, a week after Kopras launched his
finished product.
The carpenter filed a lawsuit in the U.S. District Court for the Northern District
of Illinois in 2004, amending his complaint in May 2005.
Sears continued to sell a device using Roto Zip's trade secrets after the suit
was filed, and sales of Roto Zip's rotary saw dipped dramatically from $41
million in 2000 to $615,000 in 2003, the jury was told.
The jury found Sears guilty of willful and malicious trade secrets
misappropriation and breach of contract.
Kopras borrowed $20,000 to start up his power tool business in the
basement of his Wisconsin home in 1976.
Billy
but 25m to sear aint nothing, a hour profit. it should be 25 billion
That is if Sears was making a profit.This just posted a loss..
.
A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
What's profit and loss got to do with it? Does a man's tax return affect his liability when he commits a crime .... or has a judgment against him? Indeed, the very purpose of penalties is to cause suffering. It appears - I have yet to read the source documents - that Sears' sin was in telling the guy they were not going to use the idea - then went ahead and used it anyway, without paying him for it. Another factor in this case was the well documented pattern that Sears, and it's former subsidiary Allstate, have in practicing this sort of deceit. Indeed, they seem to encourage it, by promoting those responsible for these activities. It seems any behavior is allowed, as long as you can claim you were just looking out for the company's interests. This is the sort of "corporate culture" that a court would seek to penalize.
"What's profit and loss got to do with it?"I never said that it did. I was responding to BB."Does a man's tax return affect his liability when he commits a crime .... or has a judgment against him?"Actually it does come into play in figuring punitive payments.It does not make any differences on figuring money damages.I don't remember if there where any punitive damages in this case or not. Punitive damages are suppost to be a warning not to do sometihng like this again. And thus has to be sized to the companies size. What is punative to one might not be anything to a 2nd and totally overwhelm a 3rd..
.
A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
One theory is the bad guy should pay the plaintiff the profits he actually made from his bad deed, but usually the payment is "lost profits" -- the profit the good guy would have made if his idea had not been stolen. At that point it's a battle of the highly paid economic experts to determine how much the plaintiff would have made.
When I think of all the money I would have made if I just did this business or that, or followed up this idea... better not go there! Never look back unless it helps you decide what to do going forward.
Billy
I apologize, Billy ... I was responding to the 'theft' of the ratchet idea. While I'm no fan of Sears, they did go through the motions of paying the kid for his idea. They just grossly lied as to their intentions for the product. He trusted them, and he was betrayed. That's why Sears lost the case.