Take or License: Can a Contract Cap Trade Secret Damages at a Royalty?

by Dennis Crouch

This is the second post on Versata Software, LLC v. Ford Motor Co. On September 10, 2026, the Federal Circuit issued a modified version of its May 22 opinion, changing a single substantive sentence. The holdings of the panel (Judge Hughes, joined by Chief Judge Moore and Judge Taranto) are unchanged: Versata may pursue unjust enrichment damages under the Defend Trade Secrets Act and the Michigan Uniform Trade Secrets Act despite a decade of licensing its software to Ford; the jury's $82 million breach-of-contract award is reinstated; and Ford's challenge to trade secret liability fails. My first post covered the unjust enrichment holding.

The changed sentence concerns the costs of performance built into the $10.95 million base-license figure. The May opinion said that Ford never "claim[ed]" such costs, which was (apparently) an overstatement, since the district court had rejected the figure on exactly that ground. The new version says Ford never "demonstrate[d] that it was beyond dispute" that the costs existed, a Rule 50 framing.

This post takes up two follow-on questions: (1) how much broader trade secret damages are than patent damages, and  (2) whether a licensee like Ford could have capped its exposure at a royalty in the original contract (contractually excluding unjust enrichment damages).

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