We know many details and legal jargon come along with lawsuits so we have broken it down below with a brief background to the wrongdoings and a timeline.
ECIMOS developed software that enabled quality-control testing of Carrier’s HVAC units and provided Carrier with database storage for the test results. A license granted to Carrier by ECIMOS for the software included use of the database-script source code (database code) and the software-script source code (software code). However, the license provided that Carrier could not copy, reverse engineer, distribute, or create derivative works based on the software developed for it by ECIMOS.
After using the licensed software for nearly two decades, Carrier made a software switch. Carrier approached another software developer, Amtec, to replace the ECIMOS software. In preparing for this switch, Carrier used ECIMOS’s database code to create a similar data-storage procedure and data-storage “results table.” Carrier then sent that code to Amtec. Amtec ultimately used that code in the new software it developed for Carrier. Enter the lawsuit.
- November 2015: ECIMOS, LLC sues Carrier Corp, a manufacturer of heating, ventilation, and air conditioning (HVAC units) for breach of contract, copyright infringement, and misappropriation of trade secrets.
- 2018: Memphis, TN court ruled in favor of ECIMOS awarding them $7.5MM, $1.5MM on the contract breach claim, $1MM for actual damages from copyright infringement, and $5MM for profit disgorgement; both parties appealed.
- August 2018: Court orders Carrier to create a new software to replace ECIMOS testing software. Carrier says it needs120 days but Court leaves request open-ended.
- August 21, 2020: The Court affirmed the trial court’s ruling on all three charges:
- The breach of contract claim, awarding ECIMOS $401,250.
- The copyright infringement claim ruled an additional award of $164,800 as the fair market value for Carrier to have paid for the software and adjusted the award to $5MM for the disgorgement of profits during the relevant time period (only 2.2% of Carrier’s total profits).
- The misappropriation of trade secrets was affirmed, resulting in the Court prohibiting Carrier from disclosing ECIMOS’s trade secrets to any third parties.
- October 2020: Court certifies a software version that is not infringing on ECIMOS; Carrier does not fully roll it out.
- July 2021: ECIMOS learns that Carrier still has not rolled out a new software, exhausting stall tactics. ECIMOS files a motion requesting criminal charges and incarceration against CEO, David Gitlin and Carrier’s court-designated Corporate Representative, JC Stewart; along with $11.75MM to be paid in criminal sanctions based on the previous court ruling that $250K would be awarded for every week that Carrier does not comply with the court order.
- Additional filing on Friday, July 16, requests the Court to have Carrier come current with the ongoing profit disgorgement damages – a total of $14.66MM to pay ECIMOS.