Morningstar settles $61 million trade secret suit 

Morningstar, the Chicago investment research firm, settled a trade secret suit with Business Logic, a Chicago-based developer of financial software, for $61 million.

Business Logic provided Ibbotson Associates with software for tracking and managing individuals’ 401(k) accounts in 2003. When Morningstar bought Ibbotson in 2009, the company started to develop its own software. Business Logic then sued Morningstar for breach of contract, misappropriation of trade secrets and damages.

Morningstar and Business Logic announced the $61 million settlement Thursday. Under terms of the agreement, Morningstar has secured a license to the intellectual property that was at the heart of the dispute. Morningstar will pay Business Logic $61.0 million, which is approximately $38.2 million after taxes, or 85 cents per share. Morningstar will record the expense in the second quarter of 2014.

“We’re very pleased with settlement, and excited to focus on the future,” says Bill Patterson, Business Logic’s general counsel. “It shows the value of what (we’re) doing.” The company has signed an agreement with Russell Investments and will compete with Morningstar in the 401(k) advice market, Patterson says.

“We’re pleased to settle this long-standing litigation with Business Logic,” Joe Mansueto, Morningstar’s CEO, said in a statement. “Although it’s a meaningful payment, it removes the risk, distraction and uncertainty posed by the lawsuit. We look forward to continuing to invest in and expand our successful retirement offerings.”

 

Source: Usatoday

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