TechForward Won A $27 Million Lawsuit Against Best Buy
TechForward is a startup that has won a lawsuit against Best Buy based on misappropriated trade secrets according to TechCrunch. A judge awarded TechForward $22 million in damages and $5 million in punitive damages. TechForward set up a program called a Guaranteed Buyback Plan with Best Buy back in 2009.
The company did similar deals with other retailers after that. The way it worked is that customers were able to buy a plan when buying a gadget and then customers would have the option to sell the gadget back to Best Buy for store credit based on a prorated amount. The longer that the consumer kept the product, the less store credit they would get back.
The way that TechForward evaluated buyback was based on the price, exercise rates, and other factors. Best Buy was able to get TechForward to give them valuable data around the return factors under a confidentiality agreement. Best Buy ended their relationship with TechForward shortly after that and started a similar program. They even advertised that program in a Super Bowl commercial in 2011.
TechForward filed a lawsuit against Best Buy because of that. TechForward ended up running out of cash and they had to sell their assets to SquareTrade. First Round Capital, one of TechForward’s investors, funded the lawsuit against Best Buy. TechForward was founded by Jade Van Doren and Marc Lebovitz.