Jeppesen Ordered to Pay $43.1 Million
A jury in federal court in Denver has ordered Jeppesen Sanderson to pay $43.1 million to a husband-and-wife app development team after determining that the aviation giant breached terms of a contract and committed fraud. The Denver Post is reporting that the decision came after Foxborough, Mass.-based SolidFX argued that Jeppesen stole its idea for an app that would allow pilots to access Jeppesen's terminal charts on the iPad. The companies signed a contract in 2009 that called for SolidFX to develop such software programs for an "e-book viewer" and Jeppesen to license its charts for use on the apps. SolidFX's first product under the agreement worked with the now-defunct iRex e-book reader, but Jeppesen refused to provide its proprietary data for any other device, including the iPad. Instead, Jeppesen developed its own iPad app, a program that thousands of pilots and major commercial carriers now use.
Jeppesen contended during trial that the iPad is not an e-book viewer because it can also be used to record videos, browse the Web and perform other functions. SolidFX argued that it amended the original contract to include the term e-book viewer rather than the more widely used e-book reader to cover future devices such as the iPad. Emails presented during trial showed Jeppesen officials acknowledging to SolidFX that their contract included the iPad while working in secret to develop their own app. "Should not say anything yet about (Jeppesen) providing our own iPad app," Jeppesen executive Nasos Apostolopoulos wrote in a May 14, 2010, email to company officials who worked with SolidFX. That plan wasn't disclosed to SolidFX until late May 2010, a day before Jeppesen publicly announced its iPad app. "It seemed like a cover-up," juror Andrew Mino said after the verdict was read, adding that he believed the iPad was clearly an "e-book viewer." The verdict could have broader implications, potentially impacting existing app development and product-licensing contracts signed before the release of the iPad and other gadgets. The jury awarded SolidFX $42.9 million in lost profits and business value on the breach-of-contract claim and $173,000 in wasted costs tied to the fraud allegation. SolidFX had sought $78.6 million in damages, arguing that Jeppesen stands to reap up to $50 million a year off its own iPad app.