Caterpillar ordered to pay $73.6M to tiny British firm

Kim Janssen
The Chicago Tribune

CHICAGO — A federal jury has ordered Caterpillar to pay a small British firm $73.6 million for ripping off its design for a piece of heavy-duty construction equipment.

Caterpillar Inc. has a distribution center in Springettsbury Township.

Caterpillar, based in the central Illinois city of Peoria, stole trade secrets from its supplier, Miller U.K. Ltd., when it copied a Miller design for a coupling device that links heavy buckets to hydraulic digging machines, the jury found on Friday at the end of a two-month trial in Chicago’s federal court.

The verdict — the largest award under the Illinois Trade Secret Act, according to Miller’s attorneys — was a David and Goliath-style triumph for Miller, which employs just 105 workers in a small town in the north of England, against Caterpillar, which employs 120,000 workers worldwide and is one of Illinois’ largest employers. Miller would likely have gone bust if it had lost the case, according to Reed Oslan, an attorney from Kirkland & Ellis who represented Miller.

The company’s owners remortgaged their homes and went from “nice homes and nice cars” to struggling to survive after Caterpillar stole their design, Oslan said.

Miller plans to pursue Caterpillar for its legal fees and interest on the $73.6 million verdict, which could take the total Caterpillar will have to pay to “north of $100 million,” he said, adding that he expects Caterpillar to appeal.

Caterpillar spokeswoman Rachel Potts said the firm was disappointed with the verdict and is considering its next step.

Miller’s victory was good news for Arena Consulting, which helped bankroll the suit in return for a cut of the jury award.

So-called litigation financing is a growing but controversial industry. Supporters say it levels the playing field, allowing small-time litigants to have their day in court against wealthy defendants, but critics say giving outside investors a stake in the outcome of a case can skew the litigants’ decision making.

Arena Consulting President Herbert Lichtman did not immediately return calls seeking comment Monday, but Oslan said that even after Miller has paid Arena, Miller still “will be in a position to pay off their debt, stabilize the company and move forward.”

Miller was awarded $24.9 million for Caterpillar’s “unjust enrichment” from the coupler design and $49.7 million in damages for Caterpillar’s “willful and malicious” theft of trade secrets, Oslan said. Caterpillar won $1 million back from Miller for its counterclaim of defamation, for claims Miller made in a video about Caterpillar’s rip-off design.