12 ms·

Seriously, does Best Buy not have a legal department? How could those people think it was OK to discuss stealing their idea in easily discoverable email, then a

by joonix 14y ago

Seriously, does Best Buy not have a legal department? How could those people think it was OK to discuss stealing their idea in easily discoverable email, then actually steal it? And then, when the lawsuit comes, not even settle, but go to trial, when there's mounds of evidence that dooms Best Buy? Someone is not doing their job there. Best Buy is one of those companies that is just all-around mediocre, in every regard.

at-fates-hands 14y ago
They do and trust me, you'd be surprised, probably even shocked to know what goes on at their corporate HQ. I worked there for almost a year and can attest this type of behavior is pretty common.
- gknoy 14y ago
  Is that shocked, or "shocked"? Then again, the purpose of a legal department is (unless I misunderstand it) to _advise_, and if the boss decides to do something Tremendously Stupid, it's hard to blame the lawyers. Unless, of course, they said they thought it would be fine. (Which I can't imagine they would have done.)
  - zaidf 14y ago
    Some might say that it is in the lawyers' interest at some level that their bosses go against legal advice and open themselves up to lawsuits because when that lawsuit comes in, guess which department stays employed? Now, I think most lawyers operate in good faith and go to great extremes to convince their client of taking the best option but I can see lawyers give up after a certain stage thinking alright whatever, why am I complaining, this just means I'll have enough work for next 2 years because of my client's stupid decision.
    - otoburb 14y ago
      Using that logic, it may be in the law profession's best interest, but certainly not for the Best Buy lawyers who were aware of this. Exposing yourself to detrimental litigation where the odds of you winning are low will probably result in you (the lawyer giving the poor advice) being let go and a new set of in-house counsel coming in to fix the mess.
      - zaidf 14y ago
        Woah, no one said anything about lawyers that give poor advice. I was talking about lawyers who give solid advice ... to stubborn clients who choose to go against their lawyer's (solid) advice.
        rayiner 14y ago
        To be fair, a more plausible explanation for the lawyers giving up after a certain point is that nobody wants to argue with their boss that long.
        zaidf 14y ago
        Great point :)
    - deleted 14y ago
      [deleted]
  - at-fates-hands 14y ago
    No, it was shocked. Here's a little diddy. Best Buy brought in a bunch of people after Target got sued for $6 million for not having an accessible website for blind people. Since Best Buy's site was very poor shape in this regard, they were hiring developers, managers, practically an entire team just to work on this issue. First project I'm assigned, I notice a bunch of these errors and start outlining them and attaching how much time it will take to fix. Once the project launched, guess which ones got axed from the list of requirements in the first meeting? After two more projects like this, I just gave up trying. I was told it cost too much and it wasn't an important issue. To say it was a confusing place to work is an understatement.
malachismith 14y ago
this was simple calculus. big companies do it all the time. their legal department, their leverage... their money -- against the lack of all three (by comparison) possessed by a small company. it's not that they didn't know what was going on or the risk - it's just that they assumed that it wouldn't matter. this is why it's so great that FRC fought the whole way. about time!
huhtenberg 14y ago
Don't know why they didn't settle, but + $140M in revenues - $22 million in favor of TechForward - $5 million in punitive damages - X million in lawyers fees Best Buy still did alright if you ask me.
- tptacek 14y ago
  Best Buy's gross margins hover around 25%, and that's before all the rest of their overhead kicks in. Best Buy probably took a bath here.
  - ww520 14y ago
    Is their gross margin just revenue - whole_sale_cost? If that's the case, they also have cost in labor, real estate, marketing, and others. After all those, the lawsuit would have put them in red.
  - a5seo 14y ago
    Good. Screw them. Now the evil a-hole caption will hang over their logo in my mind forever. Probably others on HN. Even if this damages their brand in only a small way, it's a real cost.
    - tptacek 14y ago
      If you really want to screw Best Buy the way the rest of the market is screwing them (that is: to death), then, next time you want to buy a big-ticket electronic product, go to Best Buy to try it out. Then buy it on Amazon like everyone else does.
      - tripzilch 14y ago
        I agree this is the best way to buy electronics :) (except over here it's a different large electronics chain and smaller online retailers instead of Amazon) For an extra slap in the face, a friend of mine even used one of their on-display Macs to place the order in that very store :) (while he did take some precautions against keyloggers, I'd be a bit more hesitant myself, to enter such data into a public computer). Their problem is that smart customers need to go online anyway, because the specs on the cards in the store are always incomplete (or even incorrect) so you can never quite compare two items. (and then it turns out that their cheapest model runs at nearly the same wattage as their expensive "energy saver" model ...) (that was for monitors btw)
shawn-butler 14y ago
Mediocre? Not possible, they had two geniuses revolutionize the workplace! Seriously ROWE [0] is the biggest excuse for people not doing real work I have ever witnessed. [0] http://en.wikipedia.org/wiki/ROWE http://en.wikipedia.org/wiki/ROWE
- enjo 14y ago
  I've implemented versions of ROWE in two different companies and the results have been excellent. Not sure what your experience has been, but mine is most definitely different.
Eliezer 14y ago
What do you mean? It worked perfectly well for Best Buy; they paid out far less in the judgment than they stole in revenue.
- davidtyleryork 14y ago
  Yeah, sadly this lawsuit is just "cost of doing business" for Best Buy. They earned $140m in the first year, they only had a % chance of paying out for a lawsuit, and the lawsuit was worth less than 20% of the $140m earned. They just profited over $113m (plus the benefit of money now vs. money later) from destroying a startup Business as usual in America nowadays :/
  - tptacek 14y ago
    No, to both of you. No no no. Best Buy didn't "earn" 140MM; according to this story, they achieved 140MM of revenue. Revenue for Best Buy is the price tag on consumer electronics. Bust Buy doesn't pull those consumer electronics out of its butt; it pays vendors to acquire those goods, marks them up, and sells them to customers. Best Buy is a public company and is required to account for this difference, which is its gross margin. Best Buy's gross margin hovers around 25%. If it all this suit cost Best Buy were the damages and penalties we already know about, then they are already close to wiped out on the deal (27MM vs. ~35MM, less legal). But that still doesn't capture it, because Best Buy spent money to clone this startup's offering and also to run the company and keep the lights on in the stores, which are expenses not captured in Best Buy's gross margin. Incidentally, the 22MM figure also didn't get pulled out of some judge's butt. If you read the jury's finding, it's the amount of unjust enrichment Best Buy achieved by misusing Techforward's property. In the very worst case scenario, virtually every penny of profit from this program was redirected from Best Buy to the winners of the lawsuit. But it's even more likely that Best Buy took a bath even beyond the imputed profits we're talking about.
    - gwern 14y ago
      That's a good point - revenue is not profit - but I'm not sure it is it a conclusive point. First, why would you assume the final estimate of revenue which came out of the sausage system of the legal system, with Best Buy's lawyers presumably heavily incentivized to knock down the estimate at every point in every way possible, is remotely accurate? An economics book on cartels and their prosecution I read (_Global Price Fixing_) noted dryly that the estimates of illicit revenues and hence profits in the cases were nowhere near what an outside would calculate especially in the case of the vitamin cartels. (A more picayune point is that a small profit or a loss to Best Buy in one case doesn't mean that its practices are not a net expected profit; indeed, if they weren't losing an occasional case, they probably aren't taking enough risks to make the most possible profit.)

by joonix 14y ago

at-fates-hands 14y ago

They do and trust me, you'd be surprised, probably even shocked to know what goes on at their corporate HQ. I worked there for almost a year and can attest this type of behavior is pretty common.

gknoy 14y ago
Is that shocked, or "shocked"? Then again, the purpose of a legal department is (unless I misunderstand it) to _advise_, and if the boss decides to do something Tremendously Stupid, it's hard to blame the lawyers. Unless, of course, they said they thought it would be fine. (Which I can't imagine they would have done.)
- zaidf 14y ago
  Some might say that it is in the lawyers' interest at some level that their bosses go against legal advice and open themselves up to lawsuits because when that lawsuit comes in, guess which department stays employed? Now, I think most lawyers operate in good faith and go to great extremes to convince their client of taking the best option but I can see lawyers give up after a certain stage thinking alright whatever, why am I complaining, this just means I'll have enough work for next 2 years because of my client's stupid decision.
  - otoburb 14y ago
    Using that logic, it may be in the law profession's best interest, but certainly not for the Best Buy lawyers who were aware of this. Exposing yourself to detrimental litigation where the odds of you winning are low will probably result in you (the lawyer giving the poor advice) being let go and a new set of in-house counsel coming in to fix the mess.
    - zaidf 14y ago
      Woah, no one said anything about lawyers that give poor advice. I was talking about lawyers who give solid advice ... to stubborn clients who choose to go against their lawyer's (solid) advice.
      - rayiner 14y ago
        To be fair, a more plausible explanation for the lawyers giving up after a certain point is that nobody wants to argue with their boss that long.
        zaidf 14y ago
        Great point :)
  - deleted 14y ago
    [deleted]
- at-fates-hands 14y ago
  No, it was shocked. Here's a little diddy. Best Buy brought in a bunch of people after Target got sued for $6 million for not having an accessible website for blind people. Since Best Buy's site was very poor shape in this regard, they were hiring developers, managers, practically an entire team just to work on this issue. First project I'm assigned, I notice a bunch of these errors and start outlining them and attaching how much time it will take to fix. Once the project launched, guess which ones got axed from the list of requirements in the first meeting? After two more projects like this, I just gave up trying. I was told it cost too much and it wasn't an important issue. To say it was a confusing place to work is an understatement.

malachismith 14y ago

this was simple calculus. big companies do it all the time. their legal department, their leverage... their money -- against the lack of all three (by comparison) possessed by a small company. it's not that they didn't know what was going on or the risk - it's just that they assumed that it wouldn't matter. this is why it's so great that FRC fought the whole way. about time!

huhtenberg 14y ago

Don't know why they didn't settle, but + $140M in revenues - $22 million in favor of TechForward - $5 million in punitive damages - X million in lawyers fees Best Buy still did alright if you ask me.

tptacek 14y ago
Best Buy's gross margins hover around 25%, and that's before all the rest of their overhead kicks in. Best Buy probably took a bath here.
- ww520 14y ago
  Is their gross margin just revenue - whole_sale_cost? If that's the case, they also have cost in labor, real estate, marketing, and others. After all those, the lawsuit would have put them in red.
- a5seo 14y ago
  Good. Screw them. Now the evil a-hole caption will hang over their logo in my mind forever. Probably others on HN. Even if this damages their brand in only a small way, it's a real cost.
  - tptacek 14y ago
    If you really want to screw Best Buy the way the rest of the market is screwing them (that is: to death), then, next time you want to buy a big-ticket electronic product, go to Best Buy to try it out. Then buy it on Amazon like everyone else does.
    - tripzilch 14y ago
      I agree this is the best way to buy electronics :) (except over here it's a different large electronics chain and smaller online retailers instead of Amazon) For an extra slap in the face, a friend of mine even used one of their on-display Macs to place the order in that very store :) (while he did take some precautions against keyloggers, I'd be a bit more hesitant myself, to enter such data into a public computer). Their problem is that smart customers need to go online anyway, because the specs on the cards in the store are always incomplete (or even incorrect) so you can never quite compare two items. (and then it turns out that their cheapest model runs at nearly the same wattage as their expensive "energy saver" model ...) (that was for monitors btw)

shawn-butler 14y ago

Mediocre? Not possible, they had two geniuses revolutionize the workplace! Seriously ROWE [0] is the biggest excuse for people not doing real work I have ever witnessed. [0] http://en.wikipedia.org/wiki/ROWE http://en.wikipedia.org/wiki/ROWE

enjo 14y ago
I've implemented versions of ROWE in two different companies and the results have been excellent. Not sure what your experience has been, but mine is most definitely different.

Eliezer 14y ago

What do you mean? It worked perfectly well for Best Buy; they paid out far less in the judgment than they stole in revenue.

davidtyleryork 14y ago
Yeah, sadly this lawsuit is just "cost of doing business" for Best Buy. They earned $140m in the first year, they only had a % chance of paying out for a lawsuit, and the lawsuit was worth less than 20% of the $140m earned. They just profited over $113m (plus the benefit of money now vs. money later) from destroying a startup Business as usual in America nowadays :/
- tptacek 14y ago
  No, to both of you. No no no. Best Buy didn't "earn" 140MM; according to this story, they achieved 140MM of revenue. Revenue for Best Buy is the price tag on consumer electronics. Bust Buy doesn't pull those consumer electronics out of its butt; it pays vendors to acquire those goods, marks them up, and sells them to customers. Best Buy is a public company and is required to account for this difference, which is its gross margin. Best Buy's gross margin hovers around 25%. If it all this suit cost Best Buy were the damages and penalties we already know about, then they are already close to wiped out on the deal (27MM vs. ~35MM, less legal). But that still doesn't capture it, because Best Buy spent money to clone this startup's offering and also to run the company and keep the lights on in the stores, which are expenses not captured in Best Buy's gross margin. Incidentally, the 22MM figure also didn't get pulled out of some judge's butt. If you read the jury's finding, it's the amount of unjust enrichment Best Buy achieved by misusing Techforward's property. In the very worst case scenario, virtually every penny of profit from this program was redirected from Best Buy to the winners of the lawsuit. But it's even more likely that Best Buy took a bath even beyond the imputed profits we're talking about.
  - gwern 14y ago
    That's a good point - revenue is not profit - but I'm not sure it is it a conclusive point. First, why would you assume the final estimate of revenue which came out of the sausage system of the legal system, with Best Buy's lawyers presumably heavily incentivized to knock down the estimate at every point in every way possible, is remotely accurate? An economics book on cartels and their prosecution I read (_Global Price Fixing_) noted dryly that the estimates of illicit revenues and hence profits in the cases were nowhere near what an outside would calculate especially in the case of the vitamin cartels. (A more picayune point is that a small profit or a loss to Best Buy in one case doesn't mean that its practices are not a net expected profit; indeed, if they weren't losing an occasional case, they probably aren't taking enough risks to make the most possible profit.)