1 

UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF MICHIGAN 

SOUTHERN DIVISION 

VERSATA SOFTWARE, INC. et al., 

 Plaintiffs, Case No. 15-cv-10628 

 (consolidated with Case No. 15-11264) 

v. Hon. Matthew F. Leitman 

FORD MOTOR COMPANY, 

 Defendant. 

__________________________________________________________________/ 

OPINION AND ORDER (1) GRANTING FORD MOTOR COMPANY’S 

MOTION FOR JUDGMENT AS A MATTER OF LAW (ECF No. 1030) AND 

(2) TERMINATING AS MOOT FORD’S MOTION FOR ORDER 

REQUIRING PLAINTIFFS TO MAKE AN 

ELECTION OF REMEDIES (ECF No. 1018) 

 In this action, Plaintiffs Versata Software, Inc., Trilogy Development Group, 

Inc., and Trilogy, Inc. (collectively, “Versata”) brought breach of contract and trade 

secret misappropriation claims against Defendant Ford Motor Company. The case 

proceeded to trial, and a jury awarded Versata $82,260,000 in breach of contract 

damages and $22,386,000 in trade secret misappropriation damages. Ford has now 

moved for judgment as a matter of law in its favor. (See Mot., ECF No. 1030.) Ford 

argues that Versata failed to present sufficient evidence to support (1) the jury’s 

finding of liability on Versata’s trade secret misappropriation claims and (2) either 

of the jury’s damages awards. 

 

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The Court agrees with Ford that the jury’s damages awards are not supported 

by sufficient evidence. Thus, even though the Court’s review of the damages awards 

is highly deferential, the Court cannot permit those awards to stand. The Court will 

therefore GRANT Ford’s motion.1

I 

A 

Versata is a computer software company based in Austin, Texas. Ford is one 

of the world’s largest automakers. Ford hired Versata to develop computer software 

that would allow Ford to more efficiently configure the millions of cars that it 

manufactures each year. Versata created that software and called it “ACM.” Versata 

licensed ACM and other related software (including a software program called 

“MCA”) to Ford through an agreement that was called the Master Subscription and 

Services Agreement (the “MSSA”). The parties entered into the MSSA in 2004. 

1

 During trial, Ford made both an oral motion for judgment as a matter of law and 

filed a written motion requesting the same relief. (See Mot., ECF No. 999, 1001. See 

also Ford’s motion for leave to file an oversized brief, ECF No. 998.) The Court did 

not rule on the motions at that time and instead submitted the case to the jury. (See 

10/18/2022 Trial Tr., ECF No. 989, PageID.64460.) Those motions were 

superseded by Ford’s post-trial motion for judgment as a matter of law. 

Accordingly, the Court TERMINATES the motions Ford filed during the trial as 

MOOT. Versata also made an oral motion for judgment as a matter of law during 

trial on Ford’s counterclaim for breach of contract. The Court took Versata’s motion 

under advisement and submitted Ford’s counterclaim to the jury. (See 10/12/2022 

Trial Tr., ECF No. 996, PageID.65232.) The jury then ruled in favor of Versata on 

Ford’s counterclaim. Thus, the Court TERMINATES Versata’s oral motion for 

judgment as a matter of law without prejudice AS MOOT. 

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Under the MSSA (and subsequent addendums to the MSSA), Ford agreed to 

pay Versata fees (1) to license ACM and MCA and (2) for support and software 

enhancement services related to those programs. In the final year of the MSSA, Ford 

paid Versata $14.95 million to license the software and for certain enhanced support 

services. 

The MSSA was set to expire in 2014. Prior to the expiration of that 

agreement, the parties attempted to negotiate an extension. Those negotiations were 

not successful. 

Instead of renewing the MSSA, Ford developed and implemented its own 

automotive configuration software program to replace ACM and MCA. Ford called 

this software “PDO.” Ford had been working on PDO for several years before the 

MSSA expired. 

B 

At trial, Versata claimed that Ford breached the MSSA and misappropriated 

its (Versata’s) trade secrets when Ford developed PDO. Versata told the jury that 

Ford breached the MSSA in three ways: by misusing and disclosing Versata’s 

confidential information; by reverse engineering ACM and MCA as part of the effort 

to develop PDO; and by denying Versata the right to enter Ford’s premises to verify 

Ford’s compliance with the provisions of the MSSA. 

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 Versata also claimed at trial that Ford misappropriated four of Versata’s trade 

secrets when Ford developed PDO. The four trade secrets were called (1) the Grid, 

(2) Buildability, (3) Workspaces, and (4) MCA. Each of these trade secrets were 

combination trade secrets made up of several different elements. 

At the conclusion of Versata’s case in chief, Ford made an oral motion for 

judgment as a matter of law. It thereafter filed a written motion seeking the same 

relief. (See Mot., ECF Nos. 999, 1001.) The Court heard argument on the motion, 

but it did not rule on it at that time. Instead, the Court took the motion under 

advisement and submitted Versata’s claims to the jury. (See 10/18/2022 Trial Tr., 

ECF No. 989, PageID.64460.) 

 The jury returned a verdict mostly in Versata’s favor. (See Verdict Form, ECF 

No. 1004.) The jury first concluded that Ford breached the MSSA in all three ways 

identified by Versata. It awarded Versata $31,350,000 in damages for Ford’s misuse 

and disclosure of Versata’s confidential information; $50,160,000 in damages for 

Ford’s reverse engineering of Versata’s software; and $750,000 in damages for 

Ford’s refusal to permit Versata to exercise its verification rights. (See id., 

PageID.65558-65559.) Next, the jury concluded that Ford misappropriated the Grid, 

Buildability, and Workspaces combination trade secrets. (See id., PageID.65560-

65563.) It awarded Versata $10,185,000 in damages for Ford’s misappropriation of 

the Grid; $4,494,000 in damages for Ford’s misappropriation of Buildability; and 

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$7,707,000 in damages for Ford’s misappropriation of Workspaces. (See id.) 

Finally, the jury concluded that Ford did not misappropriate MCA. (See id., 

PageID.65563.) 

On February 17, 2023, Ford filed a renewed motion for judgment as a matter 

of law. (See Mot., ECF No. 1030.) The Court will discuss the bases on which Ford 

seeks judgment in its favor in substantial detail below. 

II 

Ford brings its motion under Federal Rule of Civil Procedure 50. That rule 

provides that “ [i]f a party has been fully heard on an issue during a jury trial and the 

court finds that a reasonable jury would not have a legally sufficient evidentiary 

basis to find for the party on that issue, the court may resolve the issue against the 

party; and grant a motion for judgment as a matter of law against the party on a claim 

or defense that, under the controlling law, can be maintained or defeated only with 

a favorable finding on that issue.” Fed. R. Civ. P. 50(a)(1). The rule further provides 

that, where, as here, a party files a motion for judgment as a matter of law before the 

case is submitted to the jury, and the court does not rule on the motion at that time, 

the party “may file a renewed motion for judgment as a matter of law” after the trial 

has concluded. Fed. R. Civ. P. 50(b). 

 The standards governing a Rule 50 motion are well settled. “[J]udgment as a 

matter of law is appropriate when viewing the evidence in the light most favorable 

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to the non-moving party, there is no genuine issue of material fact for the jury, and 

reasonable minds could come to but one conclusion, in favor of the moving party.” 

Mike’s Train House, Inc. v. Lionel, LLC, 472 F.3d 398, 405 (6th Cir. 2006) (internal 

quotation marks omitted). “[T]he verdict should not be considered unreasonable 

simply because different inferences and conclusions could have been drawn or 

because other results are more reasonable.” Mosby-Meacham v. Memphis Light, 

Gas, & Water Div., 883 F.3d 595, 602 (6th Cir. 2018). Moreover, when reviewing 

such a motion, a “court should not weigh the evidence, evaluate the credibility of the 

witnesses, or substitute its judgment for that of the jury.” Id. (internal punctuation 

omitted). 

 Finally, a court’s review of a jury’s damages award under Rule 50 “is 

extremely deferential.” Mike’s Train House, 472 F.3d at 413 (internal quotation 

marks omitted). Such an award must stand unless “the award is contrary to all 

reason.” Id.

III 

 The Court begins with Ford’s motion for judgment as a matter of law on 

Versata’s breach of contract claim. The Court will grant that motion, reduce 

Versata’s contract damages to $1 in nominal damages for each of the three breaches 

found by the jury, and will enter judgment in favor of Versata on its breach of 

contract claims in the amount of $3. 

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A 

Before turning to the merits of Ford’s motion, the Court pauses to provide 

some important context as to how Versata presented its contract damages theory 

during discovery and how Versata’s trial presentation on contract damages differed 

from its position on contract damages during discovery. 

 During discovery, Versata said that it would prove its breach of contract 

damages in two ways, but it did not present either methodology at trial. Versata 

identified these methodologies in response to an interrogatory from Ford. In that 

interrogatory, Ford asked Versata to “identify each category of damages Versata 

[was] seeking (i.e., actual or compensatory damages, unjust enrichment, entitlement 

to a reasonable royalty, and/or any other form of damages), and further state the 

theories of recovery, factual support for those theories, and computations of damages 

within each category, and identify the evidence Versata will rely upon in support.” 

(Versata Supp. Interrogatory Resp., ECF No. 803-15, PageID.56570.) 

Versata first responded that “[d]amages calculations and evidence material to 

those calculations [were] the domain of expert testimony.” (Id., PageID.56571.) But 

Versata did not provide any expert opinions concerning contract damages at that 

time. Instead, Versata said that it would “supplement its response in accordance 

with the court’s deadline for the submission of expert reports.” (Id.) 

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However, Versata’s later-served reports from its damages experts said very 

little about contract damages. Rather, the reports focused almost exclusively on 

trade secret misappropriation damages. For instance, a 2017 report authored by Dr. 

Craig Elson, one of Versata’s damages experts, devoted 61 pages to Versata’s trade 

secret damages and addressed breach of contract damages in a single footnote. (See 

Dr. Elson Rpt., ECF No. 347-4, PageID.17849-17910.) That footnote stated, in 

relevant part, that “[q]uantitatively, the damages associated with certain of Versata’s 

breach of contract claims (assuming liability) are subsumed in the trade secret 

misappropriation damages quantified herein.” (Id., PageID.17833 at fn.4.) 

Likewise, in a second damages report that Dr. Elson jointly authored with 

Christopher Bokhart (another of Versata’s experts) in 2018, the experts addressed 

Versata’s trade secret damages over the course of 52 pages and again addressed 

Versata’s breach of contract damages in a lone footnote. (See Dr. Elson and Bokhart 

Rpt., ECF No. 573-2, PageID.43186-43238.) In relevant part, that footnote said 

that “if [Ford’s] unauthorized use [of Versata’s software] is alternatively (or 

additionally) considered a breach of existing license agreements, reasonable royalty 

damages as calculated herein would also be reflective of damages under that 

construct.” (Id., PageID.43168 at fn. 11.) 

As trial approached, Versata attempted to augment the sparse expert contract 

damages opinions offered by Dr. Elson and Bokhart. In July of 2022, Versata served 

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a joint supplemental expert reply report on damages drafted by Bokhart and new 

Versata damages expert Renee McMahon.2

 In that report, the damages experts 

presented a never-before-disclosed breach of contract damages model based on 

Versata’s lost profits. (See Versata Supp. Reply Rpt., ECF No. 860-2.) 

Ford moved to exclude Versata’s new lost profits model of contract damages 

as untimely and unreliable (see Mot., ECF No. 860), and the Court granted the 

motion. (See Order, ECF No. 916, PageID.60219.) The Court ruled that because 

Versata had not previously and timely disclosed the lost profits damages model to 

Ford, and because there was not time for Ford to conduct new discovery on that 

damages model prior to trial, Versata could not present that model to the jury. (See 

9/12/2022 Hr’g Tr., ECF No. 919, PageID.60381-60387.) The Court also held that 

the lost profits model Versata disclosed was not sufficiently reliable because it did 

not distinguish between Ford’s different alleged breaches of contract and did not 

“provide the jury any way to calculate damages if it found that Ford breached the 

contract in some ways, but not in others.” (Id., PageID.60385-60386.) 

At trial, Versata did not present any expert testimony on contract damages. 

McMahon provided expert testimony on damages, but she confined her opinions to 

Versata’s trade secret damages. (See 10/17/2022 Trial Tr., ECF No. 979, 

2

 McMahon replaced Dr. Elson when health challenges prevented Dr. Elson from 

being available to testify at trial. 

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PageID.64127.) She did not testify, as Dr. Elson and Bokhart had opined in their 

earlier reports, that (1) Versata’s trade secret damages were “reflective” of its breach 

of contract damages or (2) Versata’s breach of contract damages were “subsumed” 

within its trade secret damages. 

In Versata’s second response to Ford’s interrogatory about breach of contract 

damages, Versata said that it would present evidence that “Ford was willing to pay 

$17 million for a one-year extension of its license to ACM and MCA under the 

MSSA,” and Versata asserted that it was “entitled to recover at least [that] amount 

for every year or part of a year that Ford continued to use Versata confidential 

information in violation of its license.” (Versata Supp. Interrogatory Resp., ECF No. 

803-15, PageID.56571.) In a hearing before the Court, Versata said that evidence of 

Ford’s willingness to pay $17 million per year would come from witness Mike 

Richards, a former Versata employee. Versata explained that Richards would testify 

at trial that during negotiations with Ford over the renewal of the MSSA, a 

representative of Ford told him (Richards) that Ford would agree to pay $17 million 

for a one-year extension of the MSSA: 

So there will be evidence at trial, it is not in the record, but Mike 

Richards will testify that in the back and forth discussion that he 

had with David Baxter, from Ford, that Ford initially rejected the 

idea of $17 million per year as part of a three or five-year deal, 

but that when they were talking Baxter, expressed a willingness 

to consider $17 million for one year, for only one year. He will 

testify to that. That’s why this is a fact issue that depends on the 

evidence presented at trial. 

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(4/8/2022 Hr’g Tr., ECF No. 815, PageID.57002.) 

But Richards did not offer that testimony at trial. Instead, Richards testified 

only that Versata had offered to license the software to Ford for $17 million per year 

and that Versata would not accept any amount less than $17 million per year to 

license ACM and MCA to Ford. In fact, no witness testified that Ford was willing 

to pay $17 million per year to renew the MSSA for any period of time. 

B 

 The Court instructed the jury on contract damages after the proofs had closed 

but before the parties presented their closing arguments. The Court told the jury that 

if it found that Ford had breached the MSSA, it should award damages in an amount 

that would put Versata in the same – but not a better – position that Versata would 

have been in if there had been full performance under the MSSA: 

If you find that Ford is liable to Versata for breach of contract, 

then you must decide the amount of money, if any, to award to 

Versata as contract damages. If you find that Ford is not liable, 

then you do not award Versata contract damages. 

[....] 

The parties seeking damages must prove by a preponderance of 

the evidence the amount of any damages to be awarded. 

However, that party does not need to prove its damages with – 

with mathematical precision because it is not always possible 

that a party can prove the exact amount of its damages. 

Therefore, it is necessary only that Versata [] prove its damages 

to a reasonable certainty or a reasonable probability. However, 

you may not award damages on the basis of guess, speculation 

or conjecture. 

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[....] 

Contract damages are intended to give the non-breaching party 

the benefit of the party’s bargain by awarding it a sum of money 

that will, to the extent possible, put it in as good a position as it 

would have been in had the contract been fully performed. The 

non-breaching party should receive those damages naturally 

arising from the breach. [] Versata [] can[not] recover a greater 

amount in damages than it could have gained by the other party’s 

full performance of the contract. 

(10/24/2022 Trial Tr., ECF No. 1006, PageID.65596-65598; emphasis added.) 

C 

During closing arguments, Versata’s counsel asked the jury to award Versata 

$17 million per year as damages for each of Ford’s three alleged breaches of 

contract. He said that $17 million per year was the appropriate amount because the 

evidence showed that (1) Versata would not accept anything less than $17 million 

per year to renew the MSSA and (2) Ford had no choice but to accept that offer 

because it could not survive without Versata’s software. (See id., PageID.65690-

65692.) As support for his claim that Ford was compelled to accept Versata’s $17 

million per year offer, counsel cited testimony from Ford employee Dave Baxter that 

Ford “ha[d] to have [automotive] configuration software” and “didn’t think [it was] 

going to get PDO done in time” to replace ACM and MCA. (Id., PageID.65690-

65692.) 

Versata’s counsel then asked the jury to multiply $17 million per year by 

seven and one-half years. (See id.) That was the amount of time that counsel said 

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Ford had been in breach of the MSSA. The total amount came to $127,500,000. 

Counsel asked the jury to award that amount for each of the three individual breaches 

of contract. (See id., PageID.65692: “I think it’s reasonable to conclude that the best 

evidence of what the license fee would be would be $17 [million] per year times 7.5 

years for each breach of contract.”) Counsel never attempted to explain for the jury 

how that damages amount was tied to each individual breach. Instead, he told the 

jury to award the same $127.5 million amount for all three breaches and not to 

“worry about rendering duplicative damages” because the Court would adjust the 

jury’s verdict after trial. (Id., PageID.65699.) 

In the alternative, Versata’s counsel provided the jury with two other amounts 

that he said the jury could use as Versata’s annual damages for each of the three 

breaches of contract. Those alternative amounts were $14.95 million per year and 

$10.95 million per year. Counsel told the jury the following about those differing 

amounts: 

Now, I also, though, recognize that you as the jury, you get to 

determine this, I don’t. And you’ve heard the evidence. Another 

number -- so I put -- I put alternative numbers on here if you want 

to consider it. You can ignore my recommendation, that’s up to 

you. But I think 17 million based on the evidence is the right 

amount, but another number would be 14.95. That -- you heard 

that from the evidence from the damage expert, Renee 

McMahon. This is the total that Ford actually paid for ACM and 

MCA software in 2014, the last year of the contract. So you 

would assume that Ford would have been willing to pay the same 

amount for future years that it paid in 2014, which would be 

$14.95 million 

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Now, if you didn’t want to accept that as far as -- there’s another 

number for 2014. If you take out basically what are called 

support and maintenance payments, the number could come 

down to 10.95 for 2014. So if you strip out -- but that’s not really 

realistic because if they’re going to use our software, they’re 

going to want our -- they’re going to want our support and 

maintenance that they would -- that they paid for every year. 

(Id., PageID.65692-65693.) 

 As noted above, the jury ultimately concluded that Ford breached the MSSA 

in each of the three ways identified by Versata. It awarded Versata $31,350,000 in 

damages for Ford’s misuse and disclosure of Versata’s confidential information; 

$50,160,000 in damages for Ford’s reverse engineering of Versata’s software for 

Ford’s commercial use; and $750,000 in damages for Ford’s refusal to permit 

Versata to exercise its verification rights. (See Verdict Form, ECF No. 1004, 

PageID.65558-65559.) 

D 

Ford argues that the Court must set aside the jury’s contract damages awards 

for two reasons: because Versata did not sufficiently prove causation of contract 

damages and because Versata did not present sufficient evidence to enable the jury 

to determine its contract damages with reasonable certainty. The Court disagrees 

with the first contention but agrees with the second. The Court addresses each 

assertion below. 

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1 

 The Court begins with the issue of causation. According to Ford, Michigan 

law requires a plaintiff alleging breach of contract to “establish a causal link between 

the asserted breach of contract and the claimed damages.” (Mot., ECF No. 1030, 

PageID.66627, quoting Gorman v. Am. Honda Motor Co., 839 N.W.2d 223, 227 

(Mich. App. 2013).) And Ford insists that at trial, “Versata did not even try to prove 

actual contract damages, let alone try to prove a causal link between any alleged 

breach and damages.” (Id., PageID.66628.) More specifically, Ford asserts that “no 

Versata witness testified that because of the inspection-provision breach, Versata in 

incurred $X of damages; that as a result of the misuse-provision breach, Versata 

incurred $Y of damages; or that as a result of the reverse-engineering provision 

breach, Versata incurred $Z in damages.” (Id.) 

Ford has, indeed, identified a serious problem with Versata’s damages case 

(more on that below), but it is not one of causation. Ford conflates two separate

components of a breach of contract claim: proof of causation of damages, on one 

hand, and proof of the amount of damages, on the other hand. The causation 

component focuses on whether the defendant’s alleged breach has resulted in any 

damage to the plaintiff, while the amount component focuses, as the name suggests, 

on the quantification of the plaintiff’s damages. Because these components are 

separate, “courts have always distinguished between proof of causation of damages 

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and proof of the amount of damages.” MCI Commc’ns Corp. v. Am. Tel. & Tel. Co., 

708 F.2d 1081, 1161 (7th Cir. 1983) (emphasis in original). 

Ford has not cited any Michigan authority holding that a plaintiff must present 

evidence that a particular breach caused a particular dollar amount of damages in 

order to satisfy its burden on causation. The sole Michigan decision it cites as 

authority for that assertion – Gorman, supra – does not support it. The plaintiff in 

Gorman brought a breach of warranty claim against an automobile manufacturer and 

a car dealer. However, the “undisputed evidence show[ed] that defects brought to 

defendants’ attention during the warranty period were repaired within a reasonable 

period of time and that the vehicle was returned to service without any further 

complaints from plaintiff.” Gorman, 839 N.W.2d at 226-27. Because there was “no 

evidence” that the defendants “failed to honor” the warranty, the Michigan Court of 

Appeals held that the plaintiff could not prevail on her breach of warranty claim. Id.

In the portion of the decision cited by Ford, the Michigan Court of Appeals 

rejected the plaintiff’s argument that she could establish a breach of warranty based 

upon evidence that she needed to repair her vehicle after the warranty expired: 

Plaintiff’s reliance on the vehicle’s postwarranty repair history is 

misplaced because there is no evidence of a causal link between 

them and an unrepaired defect that plaintiff brought to 

defendants’ attention during the warranty period. In a breach of 

contract case, the plaintiff must establish a causal link between 

the asserted breach of contract and the claimed damages. See 

Miller–Davis Co. v. Ahrens Constr., Inc. (On Remand), 296 

Mich.App. 56, 71–72, 817 N.W.2d 609 (2012). In this case, there 

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is no evidence the same repairs were made during and after the 

warranty period, and if they were the same, there was no 

evidence that the postwarranty repairs were not normal 

maintenance items as opposed to an unrepaired defect, or that the 

postwarranty repairs were not necessitated by poor workmanship 

by nonparty Suburban Acura, which performed all the warranty 

repairs. “‘There may be 2 or more plausible explanations as to 

how an event happened or what produced it; yet, if the evidence 

is without selective application to any 1 of them, they remain 

conjectures only.’” Kaminski v. Grand Trunk W. R. Co., 347 

Mich. 417, 422, 79 N.W.2d 899 (1956) (citation omitted). “To 

be adequate, a plaintiff’s circumstantial proof must facilitate 

reasonable inferences of causation, not mere speculation.” 

Skinner v. Square D Co., 445 Mich. 153, 164, 516 N.W.2d 475 

(1994). Simply put, the postwarranty repair history creates only 

speculation and conjecture that defects disclosed to defendants 

during the warranty period went unrepaired; this is insufficient 

to create an issue of material fact to survive a motion for 

summary disposition. MEEMIC Ins. Co. v. DTE Energy Co., 292 

Mich.App. 278, 282, 807 N.W.2d 407 (2011). 

Id. at 227-28 (internal footnote omitted). 

As this quoted excerpt makes clear, nothing in Gorman’s discussion of 

causation suggests, as Ford seems to contend, that a plaintiff alleging breach of 

contract must present evidence that a particular breach caused a particular amount 

of damages. The issue in Gorman simply had nothing to do with whether the 

plaintiff had sufficiently proved the amount of her claimed damages. 

In order to satisfy its burden on causation under Michigan law, Versata had to 

present evidence that its claimed damages arose “naturally [] from [Ford’s] breach” 

of the MSSA. (10/24/2022 Trial Tr., ECF No. 1006, PageID.65598.) Versata carried 

that burden. Versata sought damages for Ford’s non-renewal of the MSSA, and it 

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presented evidence that those damages arose naturally from Ford’s breaches of the 

MSSA. More specifically, Versata presented evidence that Ford breached the 

MSSA by disclosing Versata’s confidential information to the Ford employees who 

were developing PDO and by reverse engineering ACM and MCA; that those two 

breaches allowed Ford to develop PDO as a replacement for ACM and MCA; and 

that if Ford had not developed PDO, Ford would have had no choice but to renew, 

and would have renewed, the MSSA. That evidence, when viewed in the light most 

favorable to Versata, was sufficient to satisfy Versata’s burden on the causation 

element of its breach of contract claim. 

2 

While Versata did show that Ford’s breaches caused it (Versata) to suffer 

damages, it did not present sufficient evidence to permit the jury to quantify those 

damages in compliance with Michigan law. For that reason, the jury’s award of 

contract damages cannot stand. 

a 

 Under Michigan law, “damages are not presumed in relation to contracts.” 

Doe v. Henry Ford Health System, 865 N.W.2d 915, 922 (Mich. App. 2014). 

Instead, a plaintiff alleging breach of contract must “prove the measure of damages 

with reasonable certainty.” Id. (internal quotation omitted). “[I]t is not necessary 

that damages be determined with mathematical certainty.” Chelsea Inv. Grp., LLC 

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v. Chelsea, 792 N.W.2d 781, 792 (Mich. App. 2010). But “damages that are 

speculative or based on conjecture are not recoverable.” Id. Simply put, as this Court 

explained in Stonemen Grp., Inc. v. Metalforming Techs., Inc., 362 F.Supp.2d 896, 

(E.D. Mich. 2005), a decision that Versata finds persuasive (see Versata Resp., ECF 

No. 1038, PageID.66774-66775), “[a] plaintiff must produce a method by which 

damages can be calculated with reasonable certainty.” Stonemen, 362 F.Supp.2d at 

902 (emphasis added). 

 Versata did not do that. Versata’s experts never explained to the jury how to 

calculate the amount of Versata’s breach of contract damages. Nor did any lay 

witness for Versata ever testify that Versata suffered a particular amount of contract 

damages. In fact, no Versata witness offered even a rough approximation as to the 

amount of contract damages that Versata suffered. Likewise, Versata did not 

introduce into evidence any documents reflecting a calculation of its breach of 

contract damages. Without any of this evidence, the jury had no way to calculate 

Versata’s claimed breach of contract damages with reasonable certainty. 

b 

Instead of presenting testimony from a witness identifying its amount of 

contract damages, Versata presented its theory of contract damages to the jury in the 

closing argument by its attorney. As noted above, Versata’s counsel asked the jury 

to award breach of contract damages of $17 million per year for seven and one-half 

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years based upon the theory that (1) Versata offered to license ACM and MCA to 

Ford for that amount, (2) Versata was not willing to accept any lower amount to 

license ACM and MCA to Ford, (3) Ford had no alternative but to accept that 

amount, and (4) Ford was in breach for 7.5 years. 

This model for calculating damages was inconsistent with Michigan law – as 

reflected in the Court’s jury instructions – that an award of contract damages must 

put the non-breaching party “in as good a position as it would have been in had the 

contract been fully performed” while not giving that party “a greater amount in 

damages than it would have gained” absent the breach. (10/24/2022 Trial Tr., ECF 

No. 1006, PageID.65596-65598.) More specifically, this method necessarily 

overcompensated Versata because it did not account for any of the costs of 

performance that Versata would have incurred if Ford had accepted its $17 million 

per year offer and the parties had thereafter performed under the terms of that offer. 

Stated another way, the $17 million per year would have been Versata’s gross

revenue under the terms of its offer, not Versata’s net earnings in the event of full 

performance under the offer, and Versata’s damages model based upon the $17 

million per year offer thus sought to recover more from Ford than Versata would 

have gained absent a breach by Ford. Versata’s damages model is therefore 

inconsistent with Michigan law. See, e.g., Goodwin v. Coe, 233 N.W.2d 598, 603 

(Mich. App. 1975) (explaining that when calculating breach of contract damages, 

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“[t]he injured party is not [] entitled to be placed in a better position than he would 

have been if the contract had not been broken, i.e., the measure of damages is the 

actual loss sustained by reason of the breach. Thus, deduction of any saving to the 

injured party must be made.”) (internal citations omitted). 

The failure of Versata’s damages model to account for Versata’s costs cannot 

be dismissed as a minor flaw because Versata had meaningful performance 

obligations under the terms of its offer. For instance, Versata’s offer required 

Versata to provide “4 managed maintenance releases per year [....,] error resolution 

and patch releases, [and] customer support services (ticketing system, triage 

meetings, phone, email, and web based support, etc.).” (Plaintiff’s Trial Ex. 537, 

Bates No. FORD_VERSATA 11619.) Versata’s costs in providing these products 

and services could not have been de minimis.

3

 By failing to deduct those expenses, 

Versata’s damages model necessarily yielded a damages award that put Versata in a 

better position than it would have been in had the contract been fully performed. 

3 Versata’s own damages expert – in an opinion not expressed to the jury (because 

the Court excluded it, see above at Section (III)(A)) – pegged Versata’s annual costs 

of performance at $1.1 million per year. (See McMahon Expert Rpt. at ¶¶ 60-61 and 

Ex. 5, ECF No. 860-2, PageID.58779-58780, 58809.) Ford would presumably 

contend that Versata’s costs were higher – and thus that Versata’s available damages 

were lower – but Ford never conducted discovery into Versata’s costs because 

Versata did not disclose during discovery any theory of damages that included a 

consideration of its costs.

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Moreover, even if the jury had attempted to correct for the overcompensation 

inherent in Versata’s model, it could not have done so on a reliable basis. That is 

because Versata did not present the jury with any evidence of any specific cost or 

expense that it would have incurred when performing under the terms of its offer. 

Thus, the jury could only have speculated as to the amount of Versata’s costs that it 

would have needed to subtract out of its contract damages awards in order to put 

Versata in the same position that it would have been in if the parties had performed 

under Versata’s offer. But a damages award may not rest on speculation. See, e.g., 

Chelsea Inv. Grp., 792 N.W.2d at 792. For all of these reasons, Versata’s damages 

model was contrary to Michigan law and could not have been the basis of a proper 

contract damages award. 

 Moreover, the two alternative contract damages models proposed by 

Versata’s counsel during his closing argument suffered from the same flaws as the 

primary model. As noted above, the first of those alternative models called for the 

jury to award $14.95 million per year for 7.5 years. That is the amount that Ford 

actually paid Versata in the final year of the MSSA. (See 10/17/2022 Trial Tr., ECF 

No. 979, PageID.64156-64157.) The $14.95 million consisted of the “base” license 

fee of $10.95 under the MSSA million plus an additional $4.0 million for, among 

other things, “extended support and maintenance services” provided by Versata. 

(10/17/22 Trial Tr., ECF No. 985, PageID.64274-64275.) Those extended support 

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services included “provid[ing] engineers to support” Ford’s use of ACM, releasing 

several software updates each year, agreeing to “investigate” and “provide resolution 

for Errors identified” in ACM, attending “a weekly meeting with Ford personnel 

[...] to review the status” of its error investigations, and providing Ford “telephone, 

email, and web-based support.” (Addendum #1 to ACM Subscription Schedule #4 

of the MSSA, ECF No. 421-1, PageID.26502-26505.) Because the $14.95 million 

per year figure – like the $17 million per year figure in Versata’s primary damages 

model – included payments for services and support that Versata provided at some 

cost to itself, that number is a gross revenue number. It is not a net figure that 

accurately represents the amount that Versata actually gained by performing its 

obligations during the final year of the MSSA. Thus, as with Versata’s primary 

damages model, any award of damages using the $14.95 million per year figure 

necessarily would have overcompensated Versata. And, again, the jury could not 

have corrected for that overcompensation because it had no evidence concerning 

Versata’s costs. 

 Versata’s second alternative damages model called for the jury to award 

$10.95 million per year in contract damages for 7.5 years. The $10.95 million was 

the “base” license fee under the MSSA. As its name suggests, the “base” license did 

not require Versata to provide an enhanced level of service and support to Ford. 

Thus, Versata’s costs under the base license would have been less, and an award 

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based upon the base license fee of $10.95 million per year – as opposed to an award 

based upon the alternative figures of $17 million or $14.95 million per year – would 

admittedly have been closer to a proper award of Versata’s net revenue. 

But even though the base license required Versata to provide less service and 

support, it did require Versata to provide some level of technical support. For 

example, under the MSSA’s base license, Versata was obligated to perform “support 

and enhancement services” that included “replicating and diagnosing Errors reported 

by Ford.” (Plaintiff’s Trial Ex. 100, Bates No. VRS00004809.) Thus, Versata 

incurred some costs under the base license, and the base license fee therefore 

represented gross revenue to Versata rather than net gain. And, once again, because 

Versata introduced no proof of its costs, the jury had no evidence from which it could 

have determined Versata’s net gain if it (the jury) had used the base license fee as 

the foundation for its damages award. Furthermore, Versata’s costs of performance 

under the base license – i.e., its cost to correct errors, among other things – cannot 

be dismissed as a mere de minimis expense because Ford presented evidence at trial 

that it experienced frequent errors while using Versata’s software. And even 

Versata’s own damages expert, Renee McMahon, estimated (in her report, but not 

at trial, see footnote three above) that Versata would have incurred $1.1 million in 

“incremental expenses” under the “base” license. (Ex. 4 to McMahon Expert Rpt., 

ECF No. 860-2, PageID.58808.) For all of these reasons, if the jury used the base 

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license fee to calculate Versata’s contract damages, that would have resulted in the 

overcompensation of Versata, and the jury could not have reliably accounted for the 

overcompensation in its award.4

c 

 Versata offers several additional arguments as to why the Court should not 

disturb the jury’s award of contract damages, but none persuade the Court that the 

award may stand under Michigan law. 

 Versata initially argues that the Court may uphold the contract damages award 

on the theory that the jury properly awarded those damages as a “reasonable 

royalty.” (Versata Resp., ECF No. 1038, PageID.66772-66773.) The Court declines 

to uphold the award on that basis for two reasons. First, it is not clear that Michigan 

recognizes a reasonable royalty theory of contract damages. See Innovation 

Ventures, LLC v. Custom Nutrition Lab’ys., LLC, 912 F.3d 316, 347 (6th Cir. 2018) 

4

 The Court cannot solve the problem created by Versata’s use of a gross figure to 

calculate its contract damages by subtracting from the jury’s award of contract 

damages the $1.1 million per year in costs identified by McMahon in her report. 

That is because, as explained above in footnote three above, Ford did not conduct 

any discovery into Versata’s costs (because Versata never revealed during discovery 

a contract damages theory that included consideration of its costs), and thus it would 

be unfair to Ford treat McMahon’s figure as accurate. For much the same reason, 

the Court may not simply say that Versata’s costs under the base license would have 

been so insubstantial that any award of damages using the base license fee would 

not materially overcompensate Versata. That, too, would be unfair to Ford given 

that Ford, through no fault of its own, is in no position to challenge the level of 

Versata’s costs under the base license. 

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(noting that “no controlling authority from either this court or any Michigan court 

holds that damages in the form of a reasonable royalty may be assessed in a breach 

of contract case”). Second (and more importantly), even if Michigan did recognize 

such a theory of contract damages, the theory would be of no help to Versata here 

because Versata presented no evidence at trial to support a reasonable royalty theory 

of contract damages. The only Versata witness who testified about the amount of a 

reasonable royalty was Versata’s damages expert, Renee McMahon, and she said 

nothing about contract damages. When asked by Versata’s counsel “what [she was] 

here to testify about,” McMahon responded “I’m here to talk about Versata’s 

damages associated with trade secret misappropriation[].” (10/17/2022 Trial Tr., 

ECF No. 979, PageID.64127.) Finally, the Court never instructed the jury that it 

could award breach of contract damages based on a reasonable royalty model; 

instead, the Court mentioned reasonable royalty only in its instructions on trade 

secret damages. For all of these reasons, the jury’s contract damages award cannot 

be sustained as a proper award of reasonable royalties. 

Versata next argues that the jury may have properly “followed a lost-profits 

approach” when calculating breach of contract damages. (Versata Resp., ECF No. 

1038, PageID.66774.) This argument fails for at least two reasons. First, Versata 

never disclosed a lost profits theory of contract damages during discovery, and thus 

it would be unfairly prejudicial to Ford to uphold the contract damages award on 

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that basis. Second, Versata did not present sufficient evidence at trial to permit an 

award of lost profits. Under Michigan law, “[d]amages for lost profits are based on 

the loss of net rather than gross profits. Any other rule would obviously grant the 

offended litigant a greater sum than he would have earned had the breach not 

occurred.” Lawton v. Gorman Furniture Corp., 282 N.W.2d 797, 801 (Mich. App. 

1979) (emphasis added; internal citation omitted). And here, as described in detail 

above, Versata never presented any evidence of its costs and expenses that would 

have been essential to a determination of its net profits. For these reasons, the 

contract damages award cannot be sustained on a lost profits theory.5

Finally, Versata argues that even if its evidence at trial left some uncertainty 

as to the amount of its damages, the Court must nonetheless permit the damages 

award to stand “because the rule in Michigan is that the risk of uncertainty is cast 

upon the wrongdoer, not the injured party.” (Versata Resp., ECF No. 1038, 

PageID.66775; internal punctuation omitted; quoting Stonemen Grp., 362 F.Supp.2d 

at 903.) But the flaw in Versata’s contract damages case was not a mere uncertainty 

as to the amount of its damages. Rather, the flaw was that, as described in detail 

above, in several key respects Versata’s damages case was supported by no evidence 

5

 Versata counters that under Michigan law, “juries can calculate lost profits in 

circumstances like these without direct evidence of costs.” (Versata Resp., ECF No. 

1038, PageID.66774.) But for the reasons explained in detail in Ford’s Reply, the 

cases cited by Versata do not support that proposition. (See Ford Reply, ECF No. 

1041, PageID.66847-66849.) 

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– e.g., no testimony as to the amount of those damages, no documents reflecting the 

calculation or amount of those damages, and no evidence concerning its costs and 

expenses. Simply put, Versata’s contract damages case crossed the line from 

uncertainty to speculation, and the jury’s contract damages award therefore cannot 

stand. 

d 

 Even though Versata failed to prove its actual contract damages with 

reasonable certainty, it is nonetheless entitled to an award of nominal damages for 

each of the three breaches of contract found by the jury. See, e.g., Kolton v. Nassar, 

99 N.W.2d 362, 364 (Mich. 1959) (confirming that a plaintiff who proves a breach 

of contract becomes “entitled to nominal damages”). The Court will therefore enter 

judgment in favor of Versata in the amount of $1 for each of the three breaches found 

by the jury, for a total of $3. 

IV 

 The Court next turns to Ford’s arguments that it is entitled to judgment as a 

matter of law on Versata’s trade secret misappropriation claims. The Court will 

address each of Ford’s arguments separately below. 

A 

Ford first argues that Versata failed to produce sufficient evidence that it 

(Versata) disclosed the combination trade secrets to Ford. The Court disagrees. 

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The Court instructed the jury on Versata’s burden of proof with respect to the 

disclosure issue. It told the jury that “[t]o prove its claim with respect to any one of 

these alleged combination trade secrets,” Versata had to establish, among other 

things, that it “sufficiently disclosed each of its alleged combination trade secrets to 

Ford such that Ford had knowledge of each trade secret under the totality of the 

circumstances. In making this determination, you should consider whether, taking 

into account all of Versata’s relevant disclosures and the circumstances under which 

they were made, it would be reasonable to infer that Ford had knowledge of each of 

the alleged combination trade secrets.” (10/24/2022 Trial Tr., ECF No. 1006, 

PageID.65599, 65603-65604.) 

Ford says that Versata failed to satisfy its burden of proof on the disclosure 

issue because “[n]o witness testified that Versata identified the elements of any 

asserted combination as a combination to Ford.” (Mot., ECF No. 1030, 

PageID.66639; emphasis in original). Instead, according to Ford, Versata only 

“pointed over and over to a mountain of user guides and other documents and 

asserted that all the elements [of each combination] were [individually] in there 

somewhere.” (Id.) Thus, Ford asks, “[h]ow could Ford possibly have known which 

features were alleged trade secrets and which were not?” (Id., PageID.66640.) 

 The Court finds real merit in Ford’s argument. And if this Court had been 

sitting as a juror, the Court would have found that Versata did not sufficiently 

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disclose each combination trade secret to Ford for the reasons Ford identified. The 

Court was convinced during trial, and continues to believe, that Versata did not 

persuasively establish that it ever meaningfully disclosed the trade secrets – as the 

combinations identified at trial – to Ford. But this Court’s personal view of the 

disclosure issue is not dispositive. The question before the Court, at this stage of the 

proceedings, is not whether the Court would have found sufficient disclosure if 

sitting as a trial juror. Instead, the question is whether the evidence, taken in the 

light most favorable to Versata, was sufficient to support a finding that Versata 

disclosed the combination trade secrets to Ford. It was. 

 The primary evidence that Versata disclosed the combination trade secrets to 

Ford came from Versata’s technical expert, Dr. Samuel Malek. He repeatedly 

testified at trial that Versata disclosed the trade secrets as combinations to Ford 

through its user guides and presentations to Ford.6

 For example, Dr. Malek testified 

that Versata “disclose[d] the entire Grid, as well as every element of the Grid” to 

Ford in this manner. (10/13/2022 Trial Tr., ECF No. 974, PageID.63808; emphasis 

6

 At the hearing before the Court, Ford’s attorney suggested that Dr. Malek was not 

an expert on the disclosure of trade secrets and that he could not have, and did not, 

offer any opinions concerning disclosure. But Ford never objected to any of Dr. 

Malek’s testimony concerning disclosure on the ground that it exceeded the scope 

of his expertise or was improper for any other reason. On the contrary, Ford choose 

to challenge Dr. Malek’s testimony regarding disclosure during cross-examination. 

(See, e.g., 10/13/2022 Trial Tr., ECF No. 972, PageID.63571-63572, 63596-63606, 

63611-63612.) 

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added.) Dr. Malek further testified that Versata disclosed “Workspaces and the 

elements of Workspaces to Ford.” (Id., PageID.63871; emphasis added.) And he 

told the jury that Versata’s “user guides and Trie presentations” disclosed “all of 

Buildability to Ford.” (Id., PageID.63849; emphasis added.) Additional testimony 

on the disclosure issue came from former Versata employee Seth Krauss. Versata’s 

counsel asked Krauss, “how did Versata disclose all of these combination trade 

secrets, including all of their elements, to Ford,” and Krauss responded that Versata 

“disclosed [] all of the information in manuals, in technical documentation, our 

functional walkthroughs, launch acceptance documents, system requirement 

specifications, presentations [...], e-mails that we sent, discussions that we had 

onsite and the software, itself.” (10/11/2022 Trial Tr., ECF No. 968, PageID.63322; 

emphasis added.) Moreover, Versata presented evidence that its manuals and 

presentations were given to Ford’s engineers and other employees with technical 

expertise. From all of this testimony and evidence, taken in the light most favorable 

to Versata, the jury reasonably could have concluded that Versata disclosed the 

combination trade secrets to Ford in a manner that Ford, through its technicallyproficient employees, would have been able to understand. 

B 

Ford next argues that Versata failed to produce evidence that each of its 

combinations had “synergistic” value – i.e., evidence that each combination trade 

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secret had a value that was greater than the sum of its parts. (See Mot., ECF No. 

1030, PageID.66647-66649.) The Court disagrees. 

The Court addressed the issue of synergistic value in its instructions to the 

jury. It told the jury that “[a] combination qualifies as a trade secret only when the 

combination creates value beyond the sum of its individual parts.” (10/24/2022 Trial 

Tr., ECF No. 1006, PageID.65602.) 

Ford says that Versata “offered no evidence that the value of any specific 

combination of elements [of Versata’s asserted trade secrets] exceeded the value of 

the individual elements” and that “[n]o document [presented at trial] explained that 

these elements combine[d] to produce a synergistic effect.” (Mot., ECF No. 1030, 

PageID.66647-66648.) Ford insists that “[b]ecause the jury had no evidence that 

any of Versata’s combinations created value beyond the sum of the individual parts, 

the Court should enter judgment in Ford’s favor that Versata did not prove its 

combinations were trade secrets.” (Id., PageID.66649.) 

While Versata’s witnesses did not use the term “synergistic value” or phrases 

like “the whole has greater value than the sum of its parts,” their testimony was 

sufficient to support a finding that the combination trade secrets had value beyond 

the value of their individual elements. Versata’s witnesses told the jury that, when 

assembled into the combinations in question, the elements of Versata’s trade secrets 

were collectively able to perform complex functions. From that testimony, the jury 

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could have reasonably inferred that the combination of the elements in each trade 

secret had value above and beyond the sum total of the value of the elements 

individually. 

Versata witness Seth Krauss provided much of the relevant testimony. He 

explained that the “components” of the Grid “work[ed] together to provide a 

valuable technology” by, among other things, providing Ford “a much more intuitive 

user interface, [] a much faster to use interface, and [... a] user interface that 

prevented errors from being introduced that would cause a lot of time researching 

and understanding how to fix in the previous systems that were used [by Ford].” 

(10/11/2022 Trial Tr., ECF No. 968, PageID.63277-63279.) Krauss likewise told 

the jury that the “Buildability trade secret” (i.e., the combination of the elements of 

Buildability) was the “core computing brain, the big processor behind many of the 

key operations in ACM.” (Id., PageID.63297.) And he explained how the 

“elements” of the Buildability trade secret “work[ed] together” to “confer a benefit 

on Ford”: 

[T]he benefit to Ford was the ability, in realtime, during the 

modelling exercise, to implement these extremely complex 

operations that would allow models to be created in a manner 

that matched what they wanted to both engineer and what they 

wanted to market. Without Buildability, there would have been 

no capability to provide modelers, at the point of entering data to 

create models like that, that could go downstream, without lots 

of quality assurance and verification checks in turn. 

(Id., PageID.63301.) 

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Krauss also provided similar testimony with respect to the Workspaces trade 

secret. When Krauss was asked to describe how the Workspaces “combination trade 

secret” allowed Ford to solve problems with its production, he explained that 

Workspaces “allowed each of the individual users [at Ford] to make edits within 

their own workspace or sandbox, and then merge those edits together, guarantee that 

they are consistent, allow users to sync or update their own views as the production 

workspace changed” in a manner “that guaranteed that no inconsistencies got 

introduced into production.” (Id., PageID.63312.) 

In sum, from Krauss’ testimony (and other testimony offered by Versata 

witnesses), the jury could reasonably have concluded that Versata’s combination 

trade secrets had synergistic value because, when assembled as combinations of the 

elements, the trade secrets allowed users of ACM to perform complex operations.7

7 During the hearing before the Court, Ford’s counsel offered a helpful example that 

illustrates how the synergistic value requirement applies in the context of 

combination trade secrets. Counsel’s example involved a bike manufacturer. He 

said that if the manufacturer placed all of the individual parts of a bike into a box 

without assembling them into a bike, the value of the contents of the box would be 

the sum total of the value of each individual part – and no more. But if the bike 

manufacturer assembled those same parts into a finished bicycle and placed that into 

a box, then the value of the contents of the box would far exceed the sum total of the 

value of each individual part. That is because the parts, when assembled into the 

bike, could perform an important function that the parts, individually, could not 

perform. This bike analogy helps Versata, not Ford, here because Krauss’ testimony, 

quoted above, shows how the combination of the elements in the Versata trade 

secrets – like the assembled parts of the bike – worked together to perform functions 

that the elements, individually, could not have performed. 

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For all of these reasons, Ford is not entitled to judgment as a matter of law on 

Versata’s trade secret claims on the ground that Versata failed to prove a lack of 

synergistic value. 

C 

Next, Ford argues that Versata failed to present evidence that it (Ford) 

“misappropriated every element” of the Grid and Buildability trade secrets. (Mot., 

ECF No. 1030, PageID.66649-66652.) This argument relies on the Court’s 

instruction to the jury that “[f]or each alleged combination trade secret, Versata must 

prove that Ford misappropriated every element of that combination or else there is 

no misappropriation of that combination.” (10/24/2022 Trial Tr., ECF No. 1006, 

PageID.65600; emphasis added.) The Court concludes that Versata presented 

sufficient evidence to satisfy its obligation under this instruction for both the Grid 

and Buildability combinations. 

1 

The Court begins with the Grid. Ford argues that Versata failed to prove 

misappropriation of every element of the Grid because Versata did not present 

evidence that Ford’s PDO screens use the “{ALL} notation” – a notation that 

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appeared as part of the Grid on the ACM screens.8

 (Mot., ECF No. 1030, 

PageID.66649-66651.) Ford contends that it is, in fact, “undisputed” that “PDO’s 

screens do not use or include an {ALL} notation.” (Id., PageID.66650.) The Court 

disagrees. 

 While Ford presented some evidence that its PDO screens did not use the 

“{ALL} notation” (see, e.g., testimony of Ford employee Darlene Coomer denying 

that PDO used the {ALL} notation at all, ECF No. 991, PageID.64790), Versata 

presented contrary evidence. For instance, Dr. Malek testified that Ford “cop[ied] 

the entire Grid” including “every element of the Grid.” (10/13/2022 Trial Tr., ECF 

No. 974, PageID.63808; emphasis added.) Because the “{ALL} notation” was an 

element of the Grid that appeared on the ACM screens, this testimony supports a 

finding that the PDO screens used that notation. Dr. Malek also offered even 

stronger testimony on this point. He testified that “just like ACM, PDO also has the 

All notation.” (Id., PageID.63677; emphasis added.) From that testimony, the jury 

reasonably could have concluded that the PDO screens – “just like ACM” – have the 

“{ALL} notation.” 

8

 The “{ALL} notation” on the screen was an element of the Grid trade secret in 

ACM because (1) one of the elements of the Grid was the Dynamic Grid and (2) the 

Dynamic Grid required the display of the “{ALL} notation.” (ECF No. 1002, 

PageID.65545.)

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2 

The Court next turns to Buildability. According to Ford, Versata failed to 

prove that Ford misappropriated each element of that trade secret because Versata 

did not present evidence that PDO utilizes Buildability’s “minimize trie” data 

structure. (See Mot., ECF No. 1030, PageID.66651-66652.) Ford says that Versata 

could not have made that showing because it is undisputed that PDO relies upon “an 

MDD data structure, not a trie or a minimized trie.” (Id., PageID.66651.) 

Ford’s argument rests upon an unduly cramped understanding of 

“misappropriation.” Ford wrongly assumes that in order to misappropriate Versata’s 

minimized trie, it had to incorporate that structure into PDO. But the Court 

instructed the jury that “misappropriation” includes using a trade secret to “assist or 

accelerate [a party’s own] research and development.” (10/24/2022 Trial Tr., ECF 

No. 1006, PageID.65604.) And Versata presented evidence from which the jury 

could have reasonably inferred that Ford used the minimized trie element of 

Buildability in the process of developing PDO. That evidence came from Dr. Malek. 

He testified at length about the close similarities between the minimized trie 

structure of Buildability and the MDD data structure of PDO: 

Q. I would like to talk to you about your investigation now, into 

Ford’s misappropriation of this component, the Trie component. 

Ford claims that it is using a data structure called an MDD, that’s 

what they call it. What is an MDD? 

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A. So MDD is a closely related data structure to Trie, because 

it’s also tree-based data structure, and that is a data structure that 

Ford used for its Buildability analysis. 

[....] 

Q. Are the data structures very similar? 

A. They are. So as I mentioned, MDD and Tries are both very 

closely related data structures in computer science. Both are treebased data structures. And once you minimize a Trie, which is 

what Versata was doing, then what you get is, essentially, an 

MDD, meaning that a minimized Trie is practically an MDD. 

And I have -- I’m showing you here a scientific article on the 

left-hand side, this is PX 885. And on the right-hand side, I’m 

showing you portions of this article, which is not authored by me, 

it is authored by other computer scientists, where it describes, in 

the highlighted text, that a minimized Trie is an MDD. 

[....] 

Q. Can you tell us, in more detail, why Versata’s minimized Trie 

and Ford’s MDD are functionally the same? 

A. Sure. So I have prepared this table which walks you through 

why and how they are similar. So the purple column is the Trie, 

and the gray column is Ford’s MDD. As I said, they are both tree 

data structures. They both represent families at different levels, 

so each level of the tree corresponds to one feature family. Then 

both perform Buildability using set operations, and, specifically, 

they both represent features in the form of binary data, and that 

just means they are represented in the form of zeros and ones, 

and then they do set operations on these binaries, which allow it 

to be efficient. They both are used for Buildability and they both 

can be used for Buildability analysis. 

[....] 

Q. So the Ford’s MDD -- what Ford calls the MDD, and 

Versata’s minimized Trie, function in the same way? 

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A. They do. 

[....] 

Q. So to sum up, did Ford copy and misappropriate the 

minimized Trie feature of Buildability? 

A. They did. 

(10/13/2022 Trial Tr., ECF No. 974, PageID.63817-63821.) 

From this and other testimony presented at trial (including the evidence that 

the developers of PDO had access to ACM’s technical manuals), the jury could 

reasonably have concluded that Ford based its MDD data structure on – and thus 

misappropriated – Versata’s minimized trie design from Buildability. And while 

Ford presented evidence that PDO (and the MDD component of PDO) were 

developed independently of Buildability and its minimized trie structure (see, e.g., 

10/17/22 Trial Tr., ECF No. 985, PageID.64343-64346), the jury was free to weigh 

the competing evidence and to credit Versata’s evidence over Ford’s. Thus, for all 

of these reasons, there was sufficient evidence for the jury to conclude that even if 

PDO does not include a minimized trie data structure, Ford nonetheless used that 

structure to assist in the development of PDO and thereby misappropriated that 

element of Buildability. 

D 

Ford next argues that the jury’s award of trade secret damages cannot stand 

because Versata did not introduce evidence that would enable the jury to calculate 

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damages if it found, as it did, that Ford had misappropriated less than all of Versata’s 

trade secrets. (See Mot., ECF No. 1030, PageID.66652-66653.) The Court agrees. 

1 

At trial, the Court instructed the jury that any award of trade secret damages 

“must be limited to the amount of time you decide it would have taken Ford to 

independently develop the alleged combination trade secrets you found were 

misappropriated.” (10/24/2022 Trial Tr., ECF No. 1006, PageID.65605.) This 

instruction underscores that in order to return a properly-supported award of trade 

secret damages, the jury needed proof as to how long it would have taken Ford to 

develop any trade secret that Ford misappropriated. Versata did not provide the jury 

with that essential evidence. 

With respect to the development-time issue, Versata presented testimony from 

Dr. Malek. He explained that he used two commonly-used software tools to 

determine how long it would have taken Ford to independently develop Versata’s 

trade secrets. (See 10/13/2022 Trial Tr., ECF No. 974, PageID.63890-63894.) These 

tools estimate how long it would take to develop software products (like Versata’s 

combination trade secrets) by, among other things, counting lines of software code, 

considering the novelty of the to-be-designed software, and evaluating whether the 

software would need to perform “mission critical” or “safety critical” functions. (Id.) 

Dr. Malek told the jury that based upon his use of the development-time tools, he 

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concluded “that without copying Versata’s trade secrets, it would have taken Ford 

approximately 8.3 years to implement an equivalent software as ACM and Versata’s 

MCA.” (Id., PageID.63889.) In other words, according to Dr. Malek, it would have 

taken Ford 8.3 years to develop all four of Versata’s trade secrets. 

But Dr. Malek said nothing about how long it would have taken Ford to 

develop less than all of the trade secrets. Nor did he tell the jury how long it would 

have taken Ford to develop any of the trade secrets individually. And he did not 

give the jury the tools to make those determinations. For instance, he did not tell the 

jury how many lines of code were in each individual trade secret, nor did he explain 

how any of the other factors considered by the development-time tools he used 

would apply to each of the individual trade secrets. 

Without this information, the jury had no way to reliably determine how long 

it would have taken Ford to develop the three (out of four) trade secrets that it found 

to have been misappropriated. Under these circumstances, any development-time 

figure used by the jury – after it found that Ford misappropriated the Grid, 

Buildability, and Workspaces, but not MCA – would necessarily have been pure 

speculation. For that reason, the jury’s award of trade secret damages lacks a 

sufficient evidentiary foundation and cannot stand. 

The United States District Court for the Northern District of California 

reached a similar conclusion under similar circumstances in O2 Micro Int’l Ltd. v. 

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Monolithic Power Sys., Inc., 399 F.Supp.2d 1064 (N.D. Cal. 2005). In O2 Micro, 

the plaintiff accused the defendant of misappropriating twelve distinct trade secrets 

and sought damages on an unjust enrichment theory. Prior to trial, the plaintiff 

disclosed that its damages expert planned to opine that plaintiff suffered a single 

amount of damages based upon the defendant’s misappropriation of all twelve trade 

secrets. During a pre-trial conference, the court “warned [the plaintiff] of the 

dangers of bundling all of its alleged trade secrets damages together.” Id. at 1086. 

The court explained that if the jury found that the defendant misappropriated less 

than all of plaintiff’s trade secrets, then the expert’s all-or-nothing damages opinion 

would provide “no basis” for a damages calculation, and plaintiff’s damages case 

would fail as a matter of law. Id. 

Despite the court’s warning, at trial, the plaintiff’s expert witness “provided 

the jury with a damages calculation based on the assumption that all of the trade 

secrets were misappropriated.” Id. Following deliberations, the jury “found that 

only five of the [] secrets were misappropriated, and that only the misappropriation 

of one of them resulted in [defendant] being unjustly enriched.” Id. The jury then 

awarded the plaintiff $12 million in damages. In a post-trial motion, the defendant 

moved for judgment as a matter of law on the basis that the plaintiff had failed to 

sufficiently prove damages. The court granted the motion. 

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The court held that because the plaintiff’s expert “took an all-or-nothing 

approach” that “turned on misappropriation of all the trade secrets without offering 

the jury a way to attribute value to each individual trade secret,” the jury had no 

evidentiary basis upon which to award damages. Caudill Seed & Warehouse Co., 

Inc. v. Jarrow Formulas, Inc., 53 F.4th 368, 389 (6th Cir. 2022) (describing O2 

Micro). The court further concluded that the expert’s testimony was “useless to the 

jury” because it forced the jury to use “speculation and guesswork to determine 

damages”: 

After the jury concluded that [defendant] did not misappropriate 

all of [plaintiff’s] trade secrets, [plaintiff’s expert’s] expert 

testimony regarding damages for misappropriation of all trade 

secret was useless to the jury. The jury was then left without 

sufficient evidence, or a reasonable basis, to determine the unjust 

enrichment damages. Thus, the jury’s award of unjust 

enrichment damages was based on speculation and guesswork, 

not on evidence. 

O2 Micro, 399 F.Supp.2d at 1077. The plaintiff appealed that ruling to the United 

States Court of Appeals for the Federal Circuit (see Brief for O2 Micro Int’l Ltd., 

O2 Micro Int’l Ltd. v. Monolithic Power Sys., Inc, 2006 WL 3368775 (C.A. Fed. 

Oct. 23, 2006)), and the Federal Circuit affirmed – albeit without an opinion. See O2 

Micro Int’l Ltd. v. Monolithic Power Sys., 221 F. App’x 996 (Fed. Cir. 2007). 

The reasoning of O2 Micro is sound, and it applies here. First, as in O2 Micro, 

Versata was on notice that pursuing an all-or-nothing approach on damages 

questions could fatally undermine an award of damages if the jury found that Ford 

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misappropriated less than all of Versata’s trade secrets. Indeed, more than four years 

ago, the Court excluded opinions by two of Versata’s damages experts on the ground 

that they “fail[ed] to calculate damages on a trade-secret-by-trade-secret basis” and 

instead used an “all-or-nothing damages calculation.” Ford Motor Co. v. Versata 

Software, Inc., 2018 WL 10733561, at *11 (E.D. Mich. July 9, 2018). In support of 

that holding, the Court relied heavily upon and followed the decision in O2 Micro. 

See id. 

Second, like the expert in O2 Micro, Dr. Malek provided the jury an “all or 

nothing” model that left the jury without any evidence from which it could determine 

how long it would have taken Ford to develop just the three misappropriated trade 

secrets. Thus, as in O2 Micro, the jury’s award of damages necessarily rests upon 

speculation, and Ford is therefore entitled to judgment as a matter of law on 

Versata’s trade secret claims. Cf. Vertellus Holdings LLC v. W.R. Grace & Co.—

Conn., 2021 WL 3883597, at *16 (D. Conn. 2021) (collecting cases for proposition 

that “courts have cautioned that in quantifying damages in one lump sum for all 

claims, plaintiffs assume risk that the damages calculation could be excluded in its 

entirety if they are unsuccessful in proving all of their claims,” and excluding 

testimony of damages expert who offered lump sum damages calculation where 

plaintiffs did not prevail on all claims); Liveperson Inc. v. [24]7.AI, Inc., 2018 WL 

6257460, at *2 (N.D. Cal. Nov. 30, 2018) (excluding expert testimony on trade 

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secret where expert, among other things, “offer[ed] no methodology for the jury to 

calculate trade secret misappropriation damages on fewer than all of the 28 alleged 

trade secrets in the case”). 

2 

 Versata offers several counterarguments, but none persuade the Court that the 

jury’s trade secret award rests upon a sufficient evidentiary foundation. First, 

Versata suggests that the Sixth Circuit has rejected the approach of the court in O2 

Micro. (See Versata Sur-Reply, ECF No. 1045, PageID.66911.) In support of that 

contention, Versata directs the Court to the Sixth Circuit’s statement in Caudill, 

supra, that O2 Micro “is not as persuasive as [the defendant] thinks.” Caudill, 53 

F.4th 389. But the Sixth Circuit meant that O2 Micro did not provide persuasive 

support for the defendant’s position on the facts of that case, not that the reasoning 

of O2 Micro was unpersuasive. That much is clear from the context of the Sixth 

Circuit’s statement. Immediately after making the statement, the Sixth Circuit 

highlighted the key difference between the expert’s all-or-nothing damages opinion 

in O2 Micro and the expert’s damages opinion in the case before it. The court 

stressed that unlike in O2 Micro, the plaintiff’s expert in the case before it “gave the 

jury options” that “allowed the jury to calculate the value of Trade Secret 1 even 

while finding no misappropriation of Trade Secrets 2 and 6.” Id. Given this context, 

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the Court declines to read Caudill as generally disapproving of the reasoning from 

O2 Micro. 

 Second, Versata argues that the lack of evidence concerning how long it 

would have taken Ford to develop less than all of the trade secrets is not fatal because 

Versata was only required “to prove its damages to a reasonable probability, not 

mathematical precision.” (Versata Resp., ECF No. 1038, PageID.66792.) But the 

issue here is not a lack of “mathematical precision.” Instead, the problem here is 

that there was a complete lack of evidence on the critical issue of how long it would 

have taken Ford to develop less than all of Versata’s trade secrets. 

 Third, Versata argues that the jury heard competing development-time 

estimates from Dr. Malek and from Ford’s technical expert, Monty Myers, and that 

the jury was free to “land somewhere in between.” (Id., PageID.66793.) But that 

assertion starts from a faulty premise. Contrary to Versata’s suggestion, Myers 

never testified at trial about how long it would have taken Ford to develop all four 

of Versata’s trade secrets (or any of Versata’s trade secrets). Ford’s damages expert, 

Julie Davis, predicted that Myers would offer such testimony (see 10/22/2022 Trial 

Tr., ECF No. 994, PageID.64998-65000), but he did not end up doing so. In any 

event, even if Myers had testified as to how long it would have taken Ford to develop 

all of Versata’s trade secrets, that testimony would not be enough to sustain the jury’s 

trade secret damages award. That testimony, if it had been offered, would suffer 

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from the same problem as Dr. Malek’s development-time testimony: namely, it 

would not have fit with the jury’s finding that Ford misappropriated less than all of 

Versata’s trade secrets. For these reasons, the Court rejects Versata’s argument that 

the jury could have reliably resolved the development-time question by landing “in 

between” competing expert testimony on that issue. 

 Finally, Versata argues that the jury did have evidence from which it could 

have determined how long it would have taken Ford to develop just the Grid, 

Buildability, and Workspaces. According to Versata, that evidence came from 

witness Nate Little, a former Versata employee. (See Versata Ltr. Br., ECF No. 1047, 

PageID.66919.) Versata highlights Little’s testimony about Versata’s development 

of MCA, the one trade secret that the jury found Ford did not misappropriate. In 

that testimony, Little told the jury that (1) during the “2003/2004” time frame, he 

(Little) was “involved in discussions with Ford that led to the development of 

[MCA]” (10/7/2022 Trial Tr., ECF No. 961, PageID.62510); and (2) MCA launched 

in the “summer” of 2005. (10/8/2022 Trial Tr., ECF No. 962, PageID.62551.) 

Versata says that the jury could have concluded from that testimony that it took 

Versata “1.5-2.5 years” – i.e., the interval between the first discussions about MCA 

and the rollout of MCA – to develop MCA. (Versata Ltr. Br., ECF No. 1047, 

PageID.66919.) Versata suggests that the jury could then have concluded that it 

would taken Ford roughly the same 1.5-2.5 years to develop its MCA equivalent. 

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Finally, Versata implies that the jury could have subtracted those 1.5-2.5 years from 

Dr. Malek’s 8.3 years (for Ford to develop all four trade secrets) to arrive at a time 

period of 6.8-7.8 years for Ford to develop just the Grid, Buildability, and 

Workspaces. 

 The Court does not believe that Little’s testimony gave the jury a reliable 

foundation on which to determine the time it would have taken Ford to develop the 

Grid, Buildability, and Workspaces. While that testimony arguably says something 

about how long it may have taken Versata to develop MCA, Versata has not 

identified any evidence in the trial record suggesting that that information sheds any 

light on how long it would have taken Ford to develop the same trade secret. 

Moreover, Versata’s own expert, Dr. Malek, did not tell the jury that there is any 

link between Versata’s development time and Ford’s development time. On the 

contrary, he identified a number of factors that would be relevant to calculating 

Ford’s development time – i.e., counting lines of code, etc. – and did not include 

Versata’s development time in that list.9

 

Moreover, there is a timing problem with Little’s testimony. As noted above, 

Little told the jury that Versata developed the MCA trade secret between 2003-04 

9

 In his expert report, Dr. Malek did seem to suggest that there was a link between 

the time it took Versata to develop its trade secrets and the time it would have taken 

Ford to develop the same secrets. (See ECF No. 430-3, PageID.29670-29671.) But 

he did not make that point to the jury at trial. 

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and 2005, but Ford did not begin developing its MCA replacement until six years 

later, at the earliest. (See 10/17/2022 Trial Tr., ECF No. 979, PageID.64149, where 

McMahon testifies that the “date of [Ford’s] first misappropriation” was in October 

2011.) Versata has not identified any evidence in the record from which the jury 

could have determined that the time to develop a software application like MCA in 

the 2003-2005 time frame provides any reliable guidance as to how long it would 

take to develop a similar application at least six years later – which seems to be a 

“lifetime” in the rapidly-evolving world of software innovation. Simply put, Versata 

has not shown that it presented sufficient evidence to enable the jury to reliably 

utilize Little’s testimony about the time it took Versata to develop MCA to determine 

Ford’s development time for the remaining three trade secrets. 

 For all of these reasons, Versata did not provide the jury sufficient evidence 

to determine how long it would have taken Ford to develop just the ACM, 

Buildability, and Workspaces trade secrets. Without that evidence, there was no 

reliable foundation for the jury’s award of trade secret damages. The Court will 

therefore grant Ford judgment as a matter of law on Versata’s trade secret claims. 

V 

Finally, on December 8, 2022, Ford filed a motion asking the Court to order 

Versata to make an election of remedy. (See Mot., ECF No. 1018.) In that motion, 

Ford argues that “Versata cannot recover duplicative damages for a singular alleged 

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harm” – i.e., “Ford’s use of Versata’s confidential information, including trade 

secrets, after January 2015 without paying to do so.” (Id., PageID.66521.) Ford 

therefore insists that Versata must “choose either the trade secret misappropriation 

damages or one of the breach of contract awards, each of which reflect the jury’s 

assessments of the value of Versata’s injury caused by Ford declining to enter into a 

new contract.” (Id., PageID.66546.) 

 In light of the Court’s rulings above, the Court TERMINATES AS MOOT 

Ford’s motion to require Versata to elect a remedy. There is no longer an election 

for Versata to make. 

VI 

The Court recognizes that, as Versata points out, “[o]verturning a jury verdict 

is difficult by design.” (Versata Resp., ECF No. 1038, PageID.66765.) But here, as 

explained in detail above, the lack of evidence presented by Versata forced the jury 

to rest its damages awards on nothing more than speculation. For that reason, the 

damages awards cannot stand. The Court therefore GRANTS Ford’s motion for 

judgment as a matter of law. The Court will enter judgment in favor of Versata on 

its breach of contract claims in the amount of $3, and it will enter judgment against 

Versata on its trade secret claims. The Court also TERMINATES AS MOOT the 

additional motions discussed above. 

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 The Court directs Ford to submit a proposed Judgment reflecting the Court’s 

ruling herein by not later than May 19, 2023. 

IT IS SO ORDERED.

 s/Matthew F. Leitman 

 MATTHEW F. LEITMAN 

Dated: May 1, 2023 UNITED STATES DISTRICT JUDGE 

 I hereby certify that a copy of the foregoing document was served upon the 

parties and/or counsel of record on May 1, 2023, by electronic means and/or ordinary 

mail. 

 s/Holly A. Ryan 

 Case Manager 

 (313) 234-5126 

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