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American Database Company Wins $50 Million in Lawsuit Against Former CEO

Vinod Gupta

Database company Infogroup has won more than $50 million in a lawsuit filed against its former CEO Vinod Gupta and his company, DatabaseUSA, which was established in 2010 right after he was dethroned from the position over concerns about his lavish lifestyle and outrageous expenses.

A federal jury in Omaha, Nebraska, awarded the company $54 million in an intellectual property lawsuit that accused Gupta of stealing confidential information from Infogroup.

Gupta will pay his former company an amount of $10 million while his company DatabaseUSA will have to pay $43.6 million, as ordered by the federal judge on Aug. 29.

“The jury agreed that Infogroup’s industry leading techniques of database management qualified Infogroup’s database for protection under federal copyright law,” Greg Scaglione, who tried the case for Infogroup, was quoted as saying in a company statement.

“These verdicts underscore our dedication to tenaciously protect our copyright, trademarks, customer lists and other property,” Mike Iaccarino, chairman and CEO of Infogroup, said in the statement.

The Papillion-based Infogroup lodged a complaint in 2014 against Gupta and his company DatabaseUSA of stealing confidential information from Infogroup INC.

Gupta and DatabaseUSA were accused of infringement of Infogroup’s database copyright and trademarks, unfair competition, false advertising and breach of various contracts. Infogroup argued that its processes of compiling its databases were so sophisticated that it qualified for copyright protection and that the defendants that unlawfully passed its proprietary database off as their own.

Infogroup accused DatabaseUSA of trying to hire more than 20 of its employees in an attempt to get hold of their exclusive customer database. They also said that the ads of DatabaseUSA misguided the readers as they fails to show that both the companies are not related by any means.

However, the judge ruled in 2015, “The information in Infogroup’s database is not wholly unavailable to the world at large — to begin with, while some data may come from private sources or Infogroup’s own information-gathering, a substantial amount of the data is compiled from publicly-available sources.”

The case headed to discovery phase and jury trial after the judge issued preliminary rulings.

Gupta and his company had denied all the allegations brought against them by referring to the fact that two companies functioned in different ways.

According to previous reports, shareholders of infoUSA had filed a lawsuit against Gupta in 2007 expressing concens over his lavish lifestyle and expenses, following which he was ousted as the company’s CEO.

Gupta reportedly grew Infogroup single-handedly and turned a $100 investment into an empire earning over $750 million in annual revenues. He sold the company in 2010 for $680 million and established DatabaseUSA, which continued to expand along with his other business ventures such as A to Z Databases, Express-Copy, InfoFree, JangoMail, LocatePlus, and LP Police, which are owned by the Everest Group, Gupta’s family invest corporation.