The U.S. Court of Appeals for the 7th Circuit affirmed a lower court’s decision giving Home Depot the rights to Edgenet’s “Big Hammer” database classification solution, which the Atlanta retailer duplicated after hiring Edgenet to be its solutions provider for manufacturers’ products and their many attributes.
According to court records, Home Depot contracted with Edgenet in 2004 to develop a “taxonomy” that would organize Home Depot’s products database. Under the agreement, Edgenet owned the intellectual property that was licensed to Home Depot.
In 2006, the contract was extended under new terms. Home Depot could use the Big Hammer license with no fee as long as Edgenet remained the retailer’s sole data pool vendor and continued paying for services. The 2006 agreement also gave Home Depot an out: The retailer could terminate the contract and stop using Big Hammer if it purchased a perpetual license for $100,000.
By 2008, Home Depot was developing an in-house product database incorporating the Edgenet technology, according to court records. Upon learning this, Edgenet filed a copyright for its Big Hammer taxonomy 2008 solution. In February 2009, Home Depot sent Edgenet a letter saying their business relationship would end soon and enclosed a check for $100,000 to purchase the perpetual license.
Edgenet returned the check. Instead, it filed a lawsuit claiming that it had agreed to sell Home Depot the original (2004) version of the copyrighted product and not something they could use to create their own system, which ultimately became HomeDepotLink. In addition, the Atlanta-based firm accused Home Depot of working on HomeDepotLink long before it sent the $100,000 check.
A federal district court dismissed the lawsuit, and Edgenet appealed. On Sept. 2, the Chicago-based appellate court upheld the lower court’s decision.
“Home Depot didn’t do anything wrong by copying the taxonomy before paying $100,000,” the ruling said. Calling Big Hammer “a work in progress,” the higher court concluded that, “Home Depot has not been in violation of the copyright laws for even one day.”
When contacted by Home Channel News, Edgenet media director Greg Batiansila said he could not comment on the federal lawsuit because a decision had not yet been made on whether to appeal the decision. But he pointed out that Edgenet is also pursuing the case in a Wisconsin state court, where the company has prevailed in the lower courts.
“We’re looking at other cases like ours that have been successful,” Batiansila said.
Edgenet currently provides product data feeds and data feed optimization for Sears Holding Corp. and its subsidiaries, eBay, Fastenal, Interline Brands, HD Supply, Orchard Supply Hardware, Acme Tools, Google and Bing.