Facebook settles $365m modular datacentre IP theft case with UK-based BladeRoom Group

Facebook has reached a confidential settlement in its long-running intellectual property dispute with UK-based modular datacentre design firm BladeRoom Group.

The social networking giant stood accused of stealing BladeRoom’s proprietary, modular datacentre layout and server rack designs and passing them off as the output of its Open Compute Project initiative in early 2014.

BladeRoom filed a suit against Facebook on these grounds in March 2015, resulting in months of claims and counterclaims being exchanged between the two parties.

The allegations claimed Facebook drew on BladeRoom’s “trade secrets” to inform the design of the second phase of its datacentre campus in Sweden, which the company appointed Emerson Electric to oversee the construction of in May 2014.

Modular datacentres designs are often marketed on the basis that they can help speed up server farm construction, making them particularly appealing to hyperscale operators and companies that need to set up facilities in remote locations. 

According to BladeRoom, the company got in touch with Facebook in October 2011 to promote its technology and datacentre design methodology under a non-disclosure agreement.

“[BladeRoom Group] never imagined that Facebook would end up stealing the methodology and partnering with Emerson to construct its datacentres using [BladeRoom Group’s] trade secrets and confidential information,” the original court filing from March 2015 states.

The jury trial portion of the case began this week, and – on 9 April 2018 – the court is understood to have received word from Facebook and BladeRoom that a confidential settlement between the pair had been reached, resulting in the latter party dropping all claims against the firm.

According to a report on Law 360, BladeRoom had been seeking damages in the region of $365m for missing out on the contract to build Facebook’s Swedish server farm in the first place, as well as lost future earnings.

On the back of the settlement being reached, Emerson sought a mistrial or to have the case postponed, claiming the press surrounding Facebook’s recent data breach could have a negative impact on the jury and affect its chances of achieving a fair trial.

However, the court ruled the case should continue as there is no way of knowing if “even months from now the news cycle would be more favourable to Emerson”, according to district court judge, Edward Davila, in comments reported by Law 360.

Computer Weekly contacted BladeRoom, Emerson and Facebook for comment on this story, but had not received a response from at the time of publication.