Smart SpendingSmart Spending

Judge: Home Depot stole man's invention

An inventor wins $25 million in a federal trial over a safety device that spares employees' fingers. Home Depot may appeal.

By Teresa Mears May 13, 2010 2:51PM

In a major victory for David over Goliath, a North Carolina man has been awarded nearly $25 million after a judge and jury found that Home Depot stole his invention.

 

The story began in 2004, when the home-improvement giant asked Michael Powell, who had worked with the company for 20 years as an independent contractor, to help solve a problem. Too many employees were cutting themselves when they cut wood for customers. If the company couldn’t reduce injuries, and quickly, it might have to quit cutting customers’ wood.

It didn’t take Powell long to come up with a solution, a “Safe Hands” device for radial saws. Home Depot loved it.

 

But the company didn’t want to pay the inventor $2,000 for each machine, a total of $4 million to outfit all 2,000 stores, according to a story in The Palm Beach Post. Home Depot offered $1,200 each. Powell said no.

 

So the company built its own machines, which Powell claims were copies of his safety device.

 

After a 14-day trial in February, a federal jury in Florida agreed and awarded Powell $15 million and ruled the patent infringement intentional, which allowed for punitive damages.

This week, a judge upped the amount Home Depot must pay the inventor to nearly $25 million, including $3 million in punitive damages, $2.8 million in legal fees and $1 million per year in interest dating to May 2006, when Powell received a patent on the device that he had showed to Home Depot in 2004.

 

"Home Depot knew exactly what it was doing," said U.S. District Judge Daniel Hurley, calling the company callous and arrogant, according to a story in The South Florida Business Journal. "They simply pushed Mr. Powell away and they did it totally and completely for their own economic benefit." The judge added:

It is sad to say, but Home Depot literally organized the theft of the Powell invention. That is what they did. Big, wealthy Home Depot just blew off Michael Powell.

Home Depot, for its part, argued at the trial that Powell's device wasn't unique and, even if it was, he didn't properly patent it. Plus, the company said, his agreement with Home Depot allowed the company to "use, copy, produce" his intellectual property, according to the Post's story about the trial verdict.

 

Home Depot is considering an appeal. After the judge awarded the additional damages this week, company spokesman Stephen Holmes gave this statement to South Florida media:

We have a strong commitment to dealing with our business partners fairly and with integrity, which is how we've maintained long-standing relationships with literally tens of thousands of suppliers over the past 30-plus years. We would never condone actions that intentionally violate another company's intellectual property rights.

At the trial, Powell's attorneys showed a photo of a former Home Depot executive carrying tape measures, pencils and pads and looking at one of the machines Powell had built for a Georgia store.

 

Home Depot certainly has benefited from the "Safe Hands" device, according to the Post. In the year before the devices were installed, the company paid out $1 million in workers' compensation claims related to injuries caused by the saws. In the year after the devices were installed, it paid out $7,000.

Powell's story is a cautionary tale for inventors who try to get their creations in front of big companies. Even though Powell won his case, he had to spend millions on legal fees to get this far. If Home Depot appeals, it could be years before he sees any money, even if the verdict stands.

 

The Nolo do-it-yourself legal website has some advice for inventors who want to protect their patents while pitching their products, including:

  • File a provisional patent application and obtain "patent pending" status.
  • Ask the person to whom you're showing the product to sign a nondisclosure agreement.

Consulting with a patent lawyer beforehand also could be wise.

 

More from MSN Money:

4Comments
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

ABOUT SMART SPENDING

Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.

VIDEO ON MSN MONEY

TOOLS

More