Emerson expects to pay $30m to settle Facebook case

Emerson expects to pay $30m to settle Facebook case

Emerson Electric Co has been ordered to pay $30m in damages to UK-based prefabricated module manufacturer BladeRoom, after a jury in California agreed that the company used stolen designs to build Facebook’s data centre in Sweden. BladeRoom will receive $10m in compensation for the profits lost, and $20m to make up for Emerson’s ‘unjust enrichment’.

The compensation totalled significantly less than the $300m BladeRoom set out to receive in damages, but one of the company’s attorneys told Law360 that it wasn’t disappointed by the sum, as it was a matter of principle, and ‘never has been’ about the money.

Facebook began discussions with the British company in 2011 when looking at its flat pack design. However the contract for construction was subsequently offered to Emerson, which had taken part in meetings with the two companies and, like Facebook, signed a non-disclosure agreement when it was introduced to the flat pack technology.

In addition to using the design to build the data centre in Luleå, Sweden, BladeRoom alleged that the pair had integrated its technology in presentations made to the Open Compute Project (OCP), violating both the non-disclosure agreement and the OCP rules.

BladeRoom filed its suit in 2015, and both Emerson and Facebook were set to go to court following heavily confrontational interactions between the three groups’ lawyers in the months leading up to the hearing. Emerson and BladeRoom subsequently spent 20 days in court but the jury took less than a day to reach a verdict, concluding that Emerson either disclosed or used two of four trade secrets in the construction of Facebook’s Luleå facility. Facebook decided to settle as the Cambridge Analytica scandal erupted.

An Emerson attorney said that the company would appeal the jury’s verdict.