Boeing Has To Face Again The Ex-partner's Trade Secret Infringement Claims

Just this Monday, the 11th U.S. Circuit Court of Appeals reversed and remanded the DC order which dismissed the Alabama Aircraft Industries claims of trade secret misappropriation. According to the decision, the lower court erred in their decision that the AAI had presented the claims too late referring to a two-year statute of limitation instead of the five-year statute of limitation which the 11th U.S. Circuit Court of Appeals decided should be applied. This means AAI will have another opportunity to prove their claims of Boing using their trade secrets in order to win an Air Force contract. But how did this dispute began given the fact that they were ex-partners?

AAI and Boeing often did contract works for US Air Force which were given to companies with the most attractive bids in USAF procurement processes. Usually, the awards went to the companies offering the lowest prices when all the other parameters were equal. In 2008 a good opportunity arose when the USAF opened a contract requesting to maintain, repair, and upgrade an American military aerial refueling aircraft named KC-135 Stratotanker. Both Boeing and AAI teamed up submitting a joint bid while their lawyers drew up a Memorandum of Agreement, a Work Share Agreement and a Non-Disclosure Agreement which set the rules of this partnership. Protected by these contracts, AAI shared information with Boeing including the pricing, costs, man hours and work flow they needed to perform the services asked by USAF. In short time this relationship went south as the USAF announced that they had reduced the number of aircrafts that were going to be available for maintenance. Boeing notified AAI that they were terminating the agreement so at the next procurement process, they made biddings as separate entities. Boeing wins the contract by submitting an offer just 1.28% lower than the offer from AAI. This became basis for the lawsuit filed by AAI where they claim the misappropriation of their trade secrets which ultimately forced them to go bankrupt as the contract for the KC-135 aircraft comprised 80% of their total revenue, an information that Boeing also was aware of.

Interesting to see how this case will progress and what will be asked as potential damage since this was a $100 million dollar deal lost for AAI.