Caterpillar hit with $73m trade secrets verdict in Chicago

Caterpillar was ordered to pay damages of $73.6m (€67.7m) in a lawsuit by a former supplier that accused the equipment manufacturer of misappropriating its trade secrets.

A federal jury in Chicago on Friday awarded the damages to Miller UK Ltd, a British manufacturer whose case drew attention because the firm funded its suit with financing from third-parties not involved in the dispute.

The verdict was confirmed yesterday by Reed Oslan, a lawyer for Miller, which filed the lawsuit in 2010.

Caterpillar spokeswoman Rachel Potts said the firm was disappointed by the verdict and was considering its next steps.

According to the lawsuit, Miller had long supplied Caterpillar with a device called a coupler that enables the operator of a hydraulic excavator to attach tools.

In 2008, Caterpillar developed its own coupler product and moved to end its supply agreement with Miller.

Miller said Caterpillar’s product was based on confidential information and accused it of misappropriating its trade secrets.

The case was noted in legal circles because of how Miller, a family-owned business with 100 employees, financed the litigation.

The case is one of a growing number in which hedge funds and other financial firms provide funding for lawsuits in exchange for a cut of any damages.

The US Chamber of Commerce argues it promotes frivolous suits and supporters say it helps plaintiffs who otherwise could not afford to pursue cases.