A high-stakes corporate trade secrets dispute in Delaware concluded with a landmark jury verdict, setting a critical precedent for companies navigating commercial software licensing agreements. The state-level jury in the Superior Court of Delaware found manufacturing leader Cummins Inc. liable for the willful misappropriation of proprietary corporate data and backend platform data owned by software developer C3.ai, Inc.
The litigation arose from a contract framework under which Cummins was authorized to deploy C3 AI’s analytical modeling software. Court records reveal that C3 AI uncovered a systemic internal effort by Cummins personnel to look beneath user interfaces, copy backend code formulations, and replicate proprietary metrics to build their own internal analytics tools. The smoking gun in the case was extraordinary: an internal Cummins manager mistakenly attached comprehensive corporate meeting notes—explicitly detailing a plan to duplicate C3 AI’s metrics framework—to an ordinary email sent directly back to C3 AI staff. The jury completely rejected Cummins’ defense arguments, reinforcing that commercial licensees face severe liability if they cross from deployment into software cloning.
Legal outcomes can influence how customers, suppliers, and regulators view a company, especially when they involve intellectual property and compliance culture. This is particularly true when a company has had previous brushes with the law such as the Cummins settlement with the Department of Justice over emissions violations.
If there is a lesson to be learned other than instructing your employees about what should and should not be put in writing, it is to settle cases when you know you messed up. C3 AI made repeated attempts to resolve the matter amicably with Cummins management. In fact, C3 AI placed calls that Cummins did not return, sent a formal demand letter, and twice agreed to meet in person. Cummins twice cancelled.
To quote the movie Airplane, Cummins bought its ticket and knew what it was getting into.
David Seidman is the principal and founder of Seidman Law Group, LLC. He serves as outside general counsel for companies, which requires him to consider a diverse range of corporate, dispute resolution and avoidance, contract drafting and negotiation, real estate, and other issues. He can be reached at david@seidmanlawgroup.com or 312-399-7390.
This blog post is not legal advice. Please consult an experienced attorney to assist with your legal issues.
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