Jury Awards Montana Company $28.4M in Software Lawsuit

December 10, 2012

A federal court jury has awarded a Missoula company $28.4 million in a lawsuit against a national bus company over the licensing of software that helps school districts more efficiently plan and run bus routes.

Education Logistics Inc. sued Laidlaw Transit Inc. in 2007 claiming Laidlaw, which is now First Student, breached a marketing contract that required it to promote Edulog’s software and pay royalties when the software was used at a school district.

Laidlaw attorney Debra Parker of Missoula declined comment Friday on the verdict or whether the company planned to appeal.

Twenty years ago, Edulog gave Laidlaw a five-year exclusive license to market and use the software, followed by a nonexclusive license after 1997.

Edulog said its routing software uses mathematical algorithms that calculate the most efficient bus routes, saving money for school districts.

After an eight-day trial, a federal court jury on Nov. 15 found Laidlaw didn’t use its best efforts to promote the software to its school district customers, and provided some districts with unlicensed access, the Missoulian reported.

Jurors awarded Edulog $9.4 million each for lost license fees, lost annual license maintenance fees and lost royalties, along with $70,000 for lost perpetual license fees.

The verdict does not end Laidlaw/First Student’s contract to promote Edulog’s software, said Edulog attorney Sam Bull.

The original purpose of the contract was to benefit both companies and school districts “by promoting the use of the software to its fullest potential in order to allow our schools to operate as efficiently as possible,” said Dr. Hien Nguyen, a former University of Montana professor who developed the algorithms. “To that end, we look forward to working with Laidlaw/First Student in the future.”

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