Best Buy Co. Inc. on Thursday was socked with a $27 million jury verdict after being accused of stealing a small California company's trade secrets.
Los Angeles software firm TechForward sued the world's largest consumer electronics retailer in federal court, accusing Best Buy of "misappropriating" trade secrets and breach of contract in connection with Best Buy's Guaranteed Buyback program.
The jury awarded TechForward $22 million. The judge added another $5 million in punitive damages.
"We are extremely pleased that the jury recognized Best Buy's misconduct, and we hope this verdict puts large companies on notice that there are real consequences to illegally exploiting start-up businesses like ours," TechForward's co-founders Jade Van Doren and Marc Lebovitz said in a statement.
Best Buy said it did nothing wrong and promised to appeal the decision.
"We vehemently disagree with the size of the award given the facts of this case, and intend to vigorously challenge this verdict," said Paula Baldwin, a Best Buy spokeswoman.
For Best Buy, which produces $50 billion in annual sales, the judgment will have little, if any, meaningful financial impact, said R. J. Hottovy, an analyst at Morningstar Inc. "But it's just the latest in a long string of mishaps for the company," he said.
Indeed, Best Buy has been beset by distractions in what has been one of the most tumultuous years for the company. Several key executives have left in the past several months, including CEO Brian Dunn, who abruptly resigned in April amid allegations he had an inappropriate relationship with a female employee. Since then, the company's founder, Richard Schulze, has resigned as chairman and is pursuing a takeover bid.