Emerson ordered to pay UK-based BladeRoom $30m in damages over datacentre IP theft

UK-based modular datacentre design firm BladeRoom Group has been awarded $30m in damages by a US court, which ruled that power giant Emerson Electric had stolen its intellectual property to build a Facebook datacentre.

Emerson, along with Facebook, was accused of stealing BladeRoom’s proprietary, modular datacentre layout and server rack designs to inform the design of the social media giant’s datacentre campus in Sweden.

Modular datacentre designs are often marketed on the basis that they can help speed up server farm construction, making them particularly appealing to hyperscale operators and companies that need to set up facilities in remote locations.

According to papers previously filed with the court, BladeRoom disclosed “trade secrets” to Facebook under a non-disclosure agreement, which – it is claimed – were passed off as the output of the Open Compute Project in early 2014.

Facebook reached a confidential settlement with BladeRoom over the matter, just as the jury trial was due to begin in early April 2018, prompting BladeRoom to drop all claims against Facebook, as the case against Emerson continued.

Before the settlement was reached, BladeRoom had been seeking compensation of about $385m from Facebook, on grounds of loss of earnings.

According to a report on the case on legal news site Law 360, the jury took less than a day to reach its verdict, concluding that Emerson “improperly disclosed or used” two out of four of BladeRoom’s trade secrets to build the Facebook datacentre.

It awarded BladeRoom $10m for lost profit, plus an “unjust enrichment” payment of $20m.

Paul Rogers, CEO of BladeRoom, told Law 360 he was pleased with the verdict, having spent four years seeking recompense for the actions of all those involved.

“It’s an incredible process you have to go through to get to this point, but to have a jury find [in your favour], to get to the truth, is extremely satisfying,” he said.

In a statement to Computer Weekly, an Emerson spokesperson said: “Emerson is disappointed by the jury verdict, but notes that a number of important legal issues are still being dealt with by the judge and that a final judgment has not been made by the court. Since the litigation is still pending, we are unable to comment further.”