The Peoria, Illinois heavy-duty equipment producer and distributor Caterpillar has to pay $73.6 million due to design theft after the court ruled in favor of the British company Miller UK. The lawsuit has been underway since 2010, with legal costs rising up to sums exceeding millions of dollars.
The two parties in question, Miller UK and Caterpillar, used to have a supply agreement up to the lawsuit. Miller UK produced a specific type of connector, called a coupler, that linked hydraulic excavators to various peripherals like scoops, buckets and hammers. But the US company allegedly stole the coupler design in 2008, creating one of their own. This came with a complete termination of the supply agreement with the British company.
The lawsuit stemmed from the basis that Caterpillar used the fact that it was Miller’s most prominent customer in order to gain access to trade secrets. After said access was gained, the company stole the design in order to manufacture their own version, cutting Miller off from the trade agreement. These claims were completely dismissed by Caterpillar, making the lawsuit last for 5 years.
A rather criticized method of filing a lawsuit was used by Miller back in 2010, called litigation financing. This is viewed by the US Chamber of Commerce as a rather controversial maneuver because the Chamber sees it as a method of funding frivolous accusations and suits. But this controversy is counterattacked by supporters stating that without this financing, small companies and businesses would not stand a chance against large conglomerates due to the increased costs of maintaining such a lawsuit.
This type of practice is commonly used by large companies, creating dozens of preliminary filings in order to elongate the lawsuit until small businesses have no other option than dropping the case, under the threat of bankruptcy. The litigation company behind Miller’s lawsuit is Juris Company LLC from Chicago. with an added help from Arena Consulting from Illinois’ Highland Park.
Funding gained from third parties that are not involved in this case are not surprising, considering that Miller has only 100 employees, without any possibility of financing an extensive lawsuit against Caterpillar. Even if it is viewed in a controversial manner, it basically was the only viable option that the British company had at the moment, besides not pursuing the lawsuit altogether.
However, the sum will not stop at $73.6 million. The Miller representative claimed that they will continue until Caterpillar will be forced to pay for both legal fees and interests as well. If this will be the case, the total amount may even pass the $100 million mark. This is due to the alleged claim that the owners of the British company in question were forced to remortgage their homes and drop from a relatively medium-income lifestyle to barely surviving on a day-to-day basis.
Taking into account that Caterpillar has to pay $73.6 million due to design theft, more small companies may aim towards David and Goliath type lawsuits in the future. By quelling the fear that having third-party funding from litigation companies would dismiss the lawsuit, massive companies can become viable targets for those who feel wronged by them.