U.S. and European Automotive Updates

U.S. Update

I. Federal Circuit Revives Trade-Secret and Contract Damages in Versata v. Ford

On May 22, 2026, the Federal Circuit issued a mixed ruling in Versata Software, LLC v. Ford Motor Co., 176 F.4th 1336 (Fed. Cir. 2026), arising from Ford’s vehicle-configuration software. Ford had licensed Versata’s software under a 2004 Master Subscription and Services Agreement (MSSA). After renewal talks failed in 2014, Ford launched its own program, which Ford developed while licensing Versata’s software. 

In response to Ford’s declaratory judgment suit, Versata counterclaimed for trade secret misappropriation under the federal Defend Trade Secrets Act (“DTSA”) and Michigan Uniform Trade Secrets Act (“MUTSA”), and for breach of contract. It asserted that its software, called “ACM,” comprised three interdependent “combination” trade secrets—Grid (the user interface), Buildability (the “core computing brain” that generates part combinations), and Workspaces (global collaborative access). A jury found that Ford breached the MSSA and misappropriated the trade secrets, awarding $22.39 million and $82.26 million, respectively, for trade secret and contract damages. However, the district court entered judgment after trial, cutting those awards to $0 and $3.

Before trial, the court had excluded Versata’s damages expert under Daubert and limited Versata to a reasonable-royalty model measured “with reference to the parties’ licensing history,” precluding any recovery based on the value Ford obtained from using the trade secrets. On appeal, the Federal Circuit held this categorical preclusion was legal error. Both the DTSA, 18 U.S.C. § 1836(b)(3)(B), and MUTSA, Mich. Comp. Laws § 445.1904, expressly authorize recovery for unjust enrichment caused by misappropriation that is not addressed or not taken into account in computing actual loss. 

The Federal Circuit vacated the trial court’s order, remanded for a new trial on trade-secret damages, and directed the district court to reconsider two Georgia-Pacific-based royalty models it had excluded merely because they accounted for the value Ford gained.

The Federal Circuit also reinstated in full the $82,260,000 contractual damages award. Applying the Sixth Circuit’s “extremely deferential” review, the court found the jury had a “discernible path” to calculate damages with the reasonable certainty Michigan law requires because the resulting verdict fell within the $82.125 million-to-$127 million range supported by proof, and Ford’s own expert had called the $10.95 million figure a “much more reasonable starting point.”

Finally, on Ford’s cross-appeal, the court affirmed liability. Rejecting Ford’s argument that Versata had to prove Ford knew each specific element of the combination, the court held that neither statute requires “atom-by-atom” knowledge of each element of a combination trade secret. See Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc., 53 F.4th 368 (6th Cir. 2022).

II. Federal Circuit Affirms Striking of Damages Theories in VLSI v. Intel

In VLSI Technology LLC v. Intel Corp., 172 F.4th 1348 (Fed. Cir. 2026), the Federal Circuit addressed damages-disclosures in patent litigation.

The Federal Circuit affirmed the district court’s decision to strike two reasonable-royalty methodologies – net present value (NPV) and value-per-unit (VPU) – advanced by VLSI’s damages expert. Importantly, the theories were not struck as unreliable; they were struck because they exceeded what VLSI had disclosed in its damages contentions, in violation of the Northern District of California’s Patent Local Rule 3-8, which requires disclosure of damages theories, their factual support, and an exemplary computation.

Reviewing for abuse of discretion, the court found no error. VLSI’s contentions offered only “scattershot” citations to Intel data and buried key references in multi-page string cites, failing to put Intel on notice of the figures underlying the NPV and VPU theories. Two contextual facts reinforced the result: VLSI’s damages contentions had become a “recurring issue between the parties,” and the district court had previously warned VLSI to disclose its theories, supporting facts, and calculations with specificity. A second VLSI expert’s opinions were left intact, so VLSI retains the ability to prove damages on remand.

European Update

III. Munich Regional Court I Confirms Active FRAND Rate Determination in Avago v Renault

In a landmark decision dated 5 February 2026, the Munich Regional Court I (docket no. 7 O 7655/25) granted an injunction in Avago v Renault confirming that Avago’s licensing offer for a SEP was FRAND. Renault filed an immediate appeal against the decision, reflecting both the commercial impact and the wider importance of the decision for SEP litigation in the automotive industry. Renault’s immediate appeal, however, failed.

The dispute concerns EP 1903733, owned by Avago (Broadcom), and found essential to the IEEE Ethernet standard. The court held that Renault infringed the patent through navigation and telematics units installed in certain vehicle models, including the Renault Clio and Mégane. Following an oral hearing on 5 February 2026, the court announced its decision from the bench and granted Avago a sales injunction in Germany alongside recall and destruction claims, subject to substantial security amounts.

A central aspect of the ruling is the court’s refined analysis of an implementer’s willingness to license. The court distinguished between external willingness – demonstrated by constructive participation in negotiations and payment of an undisputed amount – and internal willingness, which requires acceptance of a FRAND offer within a permissible framework. While Renault was found externally willing, the court clarified that this does not preclude injunctive relief once the SEP holder’s offer is judicially confirmed as FRAND.

The decision is embedded in a broader complex of disputes between Avago and Renault. Avago has initiated four infringement cases in front of the Unified Patent Court (UPC) whereas Renault challenges the concerning patent with a nullity action before the German Federal Patent Court. 

This litigation is part of a broader campaign by Avago against car manufacturers. While cases filed against Nissan were recently settled an infringement case against Hyundai is still pending.

The ruling sends a clear message: where courts confirm a SEP holder’s offer as FRAND, injunctions remain a realistic and enforceable remedy.

IV. UPC and long-arm-jurisdiction still hot

Another topic affecting the automotive sector is European courts exercising long-arm-jurisdiction. 

In Fujifilm v Kodak, the UPC Local Division Düsseldorf concluded in January 2025 that an infringement case is governed by the rules under Art. 4 Brussels Ia Regulation rather than Art. 24(4) of same Regulation, which is limited to revocation claims and counterclaims. An infringement case can therefore be established based on the defendant’s domicile in an UPC member state rather than only at the place of registration.

On 25 February 2025 the Court of Justice of the European Union (CJEU) held in its landmark decision BSH Hausgeräte v Elektrolux that the UPC is also competent for an infringement case that concerns a patent that was granted in another member state or even in a third country if the defendant is domiciled in a member state. This doctrine has been applied since then in a couple of cases like MUL-T Lock v IMC Creations (Local Division Paris) and Dainese v Alpinestars (Local Division Milan).

On 6 March 2026, the Court of Appeal (CoA) of the UPC referred four questions to the CJEU regarding long-arm-jurisdiction in the case Dyson v Dreame. The questions are limited in scope. They all relate to the specific scenario where an UPC territory domiciled so-called Authorized Representative needed for product safety and market surveillance under EU regulatory law is used as an anchor defendant to catch defendants that are domiciled outside the UPC territory (e.g. Hong Kong) for infringing acts occurring outside the UPC territory (e.g. Spain) because the claims against both are closely related. A decision on that matter can be expected in 1,5-2 years.

Furthermore, jurisdiction can also be found based on the place of infringement as ruled by the UPC CoA on 13 March 2026 in Adobe v KEEEX and on 27 March 2026 in NUC v Hurom based on Art. 71b(2), (3) in conjunction with Art. 7(2) of the Brussels Ia Regulation.

Another high-profile case regarding long-arm-jurisdiction was the recently withdrawn action of Onesta v BMW before the Regional Court Munich I (docket nos. 21 O 13056/25 and 21 O 13057/25). This was the first time an alleged infringement of a US patent was brought to an EU member state court following the CJEU’s ruling in BSH Hausgeräte v Elektrolux.