A settlement agreement was publicly announced today by our client, Business Logic, a Chicago-based developer of financial software, with Morningstar, Inc. and its subsidiary, Ibbotson Associates, a leading provider of independent investment research, in connection with a trade-secret misappropriation case in Chicago. Yetter Coleman pursued the case on behalf of Business Logic to help maximize its recovery after the company secured litigation funding from a major hedge fund. The $61 million settlement recovers 95% of our client’s maximum claimed damages, and the payment ranks as the 9th largest public trade-secrets settlement in the U.S, and apparently the #1 trade-secrets settlement in Illinois.
Yetter Coleman partner Collin Cox noted, “It was truly an honor to work on behalf of Business Logic to win this settlement on its behalf.” He adds, “We had an outstanding legal team that included Bill Patterson, the client’s general counsel and chief operating officer, as well as outstanding local counsel, Steve Fardy and Pete Skiko of Swanson, Martin & Bell in Chicago.”
In addition to Collin, Yetter Coleman’s trial team includes Paul Yetter, Reagan Simpson, Jim Zucker, Rob Ellis, Wyatt Dowling, Elizabeth Wyman, and Chris Ward.
Business Logic’s full media release about the settlement is provided below:
Business Logic Settles Intellectual Property Lawsuit, Morningstar Pays $61 Million in Trade Secrets Case
– Largest public trade secrets settlement in Illinois history –
CHICAGO, July 17, 2014 — Investment research and management firm Morningstar, Inc. agreed to pay $61 million to settle a lawsuit filed by Business Logic, a Chicago-based developer of financial software. Business Logic, the parent company of NextCapital, claimed that Morningstar and its subsidiary, Ibbotson Associates, violated a contract and took Business Logic’s intellectual property.
“This settlement points to the significant value of our software back then. We’ve continued to expand and improve our software, and that continues forward as NextCapital,” said John Patterson, CEO of NextCapital and Business Logic.
Dirk Quayle, president of NextCapital, echoed Patterson’s sentiment.
“We’re eager to provide even more innovative solutions to our clients, helping investors and institutions build and manage world-class investment portfolios,” he added.
In 2003, Business Logic provided Ibbotson with software capable of managing individuals’ 401(k) retirement accounts. After Morningstar purchased Ibbotson in 2006, Ibbotson started to develop its own software. In 2009, Business Logic sued Ibbotson and Morningstar for breach of contract, misappropriation of trade secrets and damages. Business Logic claimed $64.3 million in compensatory damages but entered into a preliminary settlement agreement for $61 million shortly before the trial was set to begin.
Business Logic was represented during the lawsuit by attorneys R. Paul Yetter and Collin J. Cox of Yetter Coleman, Houston, and Stephen Fardy and Peter G. Skiko of Swanson, Martin & Bell, Chicago.
“We are extremely appreciative of our legal team’s hard work and creativity during this process,” said Bill Patterson, general counsel and chief operating officer of NextCapital. “This case sets a meaningful precedent for intellectual property protection for innovators nationwide and helps ensure a protected, collaborative environment where Chicago start-ups can thrive.”
For more information on privately held company NextCapital and its current product offerings, please visit www.nextcapital.com.
About NextCapital Group
NextCapital’s mission is to help investors build and manage personal, objective and affordable world-class investment portfolios. NextCapital is a leading provider of aggregation-powered 401(k) managed accounts, portfolio dashboard and wealth forecasting solutions. NextCapital provides the Wall Street Journal Digital Network portfolio service, and Russell Investments’ 401(k) retirement portfolio advisory solution. The NextCapital founders were responsible for creating the first 401(k) managed accounts platform, the first electronic financial adviser and one of the first online banks. Individual investors may find us at www.NextCapital.com.