Tech firm's $740M trade secret win tossed on appeal
A $740 million jury verdict against Amrock Inc. was thrown out by a Texas appeals court that said tech firm HouseCanary Inc. failed to prove the big title insurer stole its trade secrets to build a competing real estate analysis tool.
Wednesday's decision reverses a 2018 verdict by jurors who found that Amrock, an affiliate of Quicken Loans formerly known as Title Source Inc., maliciously misappropriated elements of an analytics app the tech firm developed before Amrock broke off their relationship.
The appellate court said flaws in the definition of trade secrets theft given to the San Antonio jury undermined the verdict against Amrock, which like Quicken is a unit of Rock Holdings Inc. Amrock, based in Detroit, is the biggest independent provider of title insurance, valuations and settlement services, according to Rock's website.
HouseCanary, based in San Francisco, can retry its claims, the appeals court said. Amrock had counterclaimed that HouseCanary failed to deliver a working app that enables appraisers to file complete reports from the field. The court agreed with the jury that Amrock didn't prove that claim, which can't be retried.
Both sides are expected to appeal elements of the ruling to the Texas Supreme Court.
The appellate court spent nearly 10 pages of its 26-page decision discussing extensive trial evidence detailing Amrock's alleged misconduct before zeroing in on the jury instructions in throwing out the verdict.
"The court's ruling on technical objections to the jury charge does not undermine the strength of the evidence underlying our contract or tort claims," HouseCanary said Thursday in an emailed statement. "If one is needed, we welcome a new trial."
Amrock also said it was fine with taking a second shot at a Texas jury.
"We're pleased the justices agreed that there must be a new trial," Catherine Stone, Amrock's chief lawyer, said in an emailed statement. "A new jury will conclude that Amrock was never given, and never used, any of HouseCanary's purported trade secrets."
HouseCanary, founded in 2014, sells real estate analytics software that crunches more than 40 years of data into tools to define and forecast real estate values and market influences. As of the verdict, the firm counted among its investors former Google CEO Eric Schmidt's family office and former Commerce Secretary Penny Pritzker's PSP Growth/PSP Capital.
The jury's award of $706 million in actual and punitive damages had grown to $740 million through added interest and attorneys' fees.