News & Insights

Dykema Secures $26M Judgment for MSC Software Corp.

Michigan Federal Jury Agrees Former MSC Employees Breached Confidentiality Agreements, Misappropriated Trade Secrets When Hired by Competitor

April 15, 2014

A jury in the United States District Court for the Eastern District of Michigan issued a $26 million verdict in favor of Dykema client MSC Software Corp. and against Altair Engineering, Inc., of Troy, Michigan for misappropriation of trade secrets and tortious interference with employee contracts. Dykema lawyers Patrick Hickey, James Hermon, Timothy Kuhn and Kelly Houk represented MSC.

The case involved claims that a competitor of MSC, Altair Engineering Inc., had wrongly hired away nearly one-fifth of an MSC development team that had designed an engineering simulation software product used to conduct multi-body dynamic simulations, and misappropriated MSC’s trade secrets to develop a directly competing product.

The Dykema team, led by Hickey, convinced the jury that the workers who moved to Altair created a competing product using MSC’s trade secret information – including source code – that had been developed while they were previously employed by MSC.

“The jury agreed that Altair Engineering improperly recruited MSC’s developers and misappropriated MSC’s valuable trade secrets for the purpose of developing a competing product and taking market share away from MSC” said Hickey, a Dykema member who leads the firm’s Labor & Employment Group.

After six weeks of trial and three days of deliberation, the jury ruled in favor of MSC and concluded that Altair should pay MSC $26.3 million for misappropriation of trade secrets and tortious interference with employment contracts. The jury also assessed damages against three former MSC workers for breach of their confidentiality and non-solicitation agreements.

“This is a significant victory that ensures our client is properly compensated for the use and disclosure of its valuable trade secret information” said Hermon, a member of Dykema’s Labor & Employment Group.