Twenty years ago, a Missoula company started by a University of Montana professor signed up the country’s largest school bus firm to use its software that helps school districts plan and run their bus routes.
A recent federal court award of about $28 million to Missoula’s Edulog – shorthand for Education Logistics Inc. – and its licensing branch is testament to just how badly the deal went awry.
Edulog was supposed to see $1,000 in royalties each time Laidlaw installed the software on a computer system. Laidlaw also was supposed to promote Edulog’s software, according to court documents.
Instead, Laidlaw ended up directly competing with Edulog, and actively discouraged at least one district from using Edulog’s software, according to the documents.
Laidlaw also provided access to at least part of Edulog’s software to school districts in California, Illinois, Missoula, Pennsylvania, New Jersey and New York, according to the documents. But no royalties and fees were paid on that access, according to the documents.
Edulog, along with its licensing arm, Logistics Management Inc. of Washington, sued Laidlaw in 2007, seeking royalties, fees and lost profits.
Last month, a federal court jury in Missoula agreed, awarding Edulog $28.4 million.
The dispute harkens back two decades, with a five-year deal giving Laidlaw an exclusive license to market and use the Edulog software, and a perpetual nonexclusive license after 1997.
The jury found Laidlaw guilty of breach of contract for failing to use its “best efforts” to promote Edulog software, and for providing school districts with unlicensed access to that software.
Jurors put damages at about $9.5 million for lost royalties, $8.6 million for lost license fees and annual license maintenance fees, and $70,000 for lost perpetual license fees. Jurors found that the damages caused by Laidlaw giving school districts unlicensed access to Edulog software totaled $842,000.
Reporter Gwen Florio can be reached at 523-5268, email@example.com, or @CopsAndCourts.