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A jury in California has determined that Best Buy (BBY) must pay $22 million in damages for improper use of another companys trade secrets, and another $5 million in punitive damages. In a lawsuit filed by start-up TechForwardin the United States District Court for the Central District of California last year, the company alleged that Best Buy and two of its subsidiaries misappropriated its trade secrets relating to the Guaranteed Buyback Program, which allows customers to pay for the right to exchange products for store credit to be used on future purchases at a set price.A jury decided on Wednesday that Best Buy is guilty of making illegal use of TechForwards trade secrets after working for months with the company and then deciding to cancel the deal and implement its own buyback program.

We are extremely pleased that the jury recognized Best Buys misconduct, and we hope this verdict puts large companies on notice that there are real consequences to illegally exploiting start-up businesses like ours, TechForward co-foundersJade Van Doren and Marc Lebovitz said in a statement.

TechForwards full press release follows below.

TechForward Awarded $27 Million in Lawsuit Against Best Buy

LOS ANGELES,Dec. 5, 2012/PRNewswire/ A California jury has awarded TechForward$22 million in damages for the improper use of TechForwards trade secrets by Best BuyCo., Inc. and two of its subsidiaries relating to TechForwards Guaranteed Buyback Program.The jury determined that Best Buys conduct was willful and malicious. The court also awarded TechForwardan additional $5 million in punitive damages.

Reacting to the jury award, TechForwards co-foundersJade Van Dorenand Marc Lebovitz said in a statement, We are extremely pleased that the jury recognized Best Buys misconduct, and we hope this verdict puts large companies on notice that there are real consequences to illegally exploiting start-up businesses like ours.

TechForward, a small,California-based start-up company, filed its lawsuit, TechForward, Inc. v. Best Buy Co., Inc.,et al. in the United States District Court for the Central District of Californiain 2011, claiming that Best Buy misappropriated TechForwards trade secrets relating to TechForwards GuaranteedBuyback Program. TheGuaranteed Buyback Programhad been implemented with other national consumer electronics retailersaround the country.

Under the Guaranteed Buyback Program, the consumer electronic retailers customers pay for the right to redeem newly purchased electronic devices at a future date in exchange for store credit that represents a percentage of the original purchase price that can be used toward the purchase of another device from the retailer.

TechForward claimed that Best Buy, after months of working with TechForward to implement the program in Best Buy stores, misappropriated TechForwards trade secrets and launched its own buyback program without TechForward. Best Buy announced the launch of its program in February 2011 with great fan farewith a SuperBowl commercial featuring Justin Bieber and Ozzy Osbourne.

Jade Van DorenandMarc Lebovitzfounded TechForward in 2006. Major investors included leading venture capital firms New Enterprise Associates and First Round Capital. TechForward was sold to SquareTrade Inc., inApril 2012. The original TechForward investors retained the right to pursue the lawsuit against Best Buy.

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