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  • Ashley Baker

The Curious Case of the Trade Secrets that Weren’t

The following article by CFJ president Curt Levey was published in IPWatchdog:

The normally staid world of intellectual property law was buzzing last year about one of the biggest trade secret cases and largest punitive damages awards in American history. The case involves automated valuation models (AVMs), which are computer models typically generated by machine learning—a form of artificial intelligence—and used to estimate property values by analyzing the property’s attributes, comparable properties, and the like.

Jaws dropped last March when a Texas jury awarded HouseCanary, a Silicon Valley company specializing in residential real estate data and analytics, more than $700 million in compensatory and punitive damages after accepting its claims that it possessed AVM-related trade secrets that were allegedly misappropriated by Amrock (formerly Title Source), one of the nation’s largest appraisal and title service companies.

The jury’s verdict might lead you to believe that Amrock is guilty of one of the most blatant and outrageous intellectual property thefts in history. But when you look closer, it is the jury’s verdict that is outrageous and nearly impossible to justify. I say that not only as a lawyer, but also as someone who built AVMs much like those at issue here before attending law school...

...Indeed, almost everything about the verdict in this case is baffling. None of HouseCanary’s claims about stolen trade secrets hold up to even a modest amount of scrutiny. They all involve technology or information that either falls far short of being a trade secret or is something Amrock had no opportunity or need to steal. In many instances, both are true. Add an astronomical judgment that bears no relationship to economic reality and you have an injustice that cries out for overturning...



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