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Financial industry companies settle lawsuit for $61 million

| Jul 25, 2014 | Business Litigation |

Michigan businesses may be interested in a story concerning a dispute between two companies in the investment industry, one that helps investors and another that creates software for those investors to use. The two businesses have now settled their dispute after years of litigation.

Just over a decade ago, financial software creator Business Logic licensed their product to the investment advisory firm Ibbotson Associates. The software allowed Ibbotson’s customers to track and administer their 401(k) investments. In 2009, Ibbotson was purchased by another financial firm, Morningstar, based in Chicago. Following the acquisition, Morningstar began to create its own 401(k) management software. Business Logic then filed a lawsuit against the company, alleging that Morningstar had misappropriated Business Logic’s trade secrets and breached a contract with Ibbotson.

The two companies announced that they had reached a settlement in the lengthy legal battle on July 17. The terms of the settlement include a $61 million payment to Business Logic in exchange for granting Morningstar a license for use of the software and ability to continue development of its own product. A spokesperson from Business Logic said that the settlement is a validation of the value of the company and product. It has since signed an agreement with one of Morningstar’s competitors to provide similar services. Morningstar says that, though the price may seem high, there is value in the certainty and minimized risk that comes with a final settlement of the companies’ issues.

When two companies who were former business associates end up in a contract dispute, an attorney may be able to help. The attorney may be able to help one of the parties negotiate a settlement that is fair to both sides, or represent one party during the business litigation if necessary.

Source: USA Today, “Morningstar settles $61 million trade secret suit“, July 17, 2014