Federal Cir. Gives Raytheon Another Shot at Trade Secrets Case

By Tanya Roth, Esq. on August 03, 2012 | Last updated on March 21, 2019

The Federal Circuit Court of Appeals handed a huge victory to Raytheon Co. this week, giving the defense contractor another shot at pursuing its trade secret violation claims against Flir Systems Inc., reports Bloomberg News.

The case, which had been dismissed by a district court, has now been remanded. The three-judge panel of the Federal Circuit Court of Appeals ruled that the district court had dismissed the case in error when it granted Indigo's motion for summary judgment.

The quick facts of the case: Indigo, a unit of Flir Commercial Systems, was founded by former Raytheon employees. Indigo acquired a government contract to provide infrared cameras to the U.S. military in 2000. It acquired another, non-government subcontract in 2003.

Raytheon was able to get its hands on some of these cameras in 2004 and discovered that the Indigo camera design was very similar to the Raytheon design. Raytheon brought a patent infringement suit in 2007, which fell within three years of discovery of the alleged patent claim.

The district court dismissed the case because it held that Raytheon should have known back in 2000 that the patents were being violated. The court stated that Raytheon was on permanent inquiry notice and had a constant duty to investigate the competition, especially in light of the fact that Indigo consisted of several former Raytheon employees.

Raytheon, the district court said, should have been checking up on the patent claims well before 2004, especially considering that they had lost several contract bids to Indigo.

The Federal Circuit Court of Appeals differed in its viewpoint. The appeals court held that the losses of the contracts were part of normal competition. Furthermore, the Federal Circuit held that Raytheon relied on statements from Indigo that Raytheon's intellectual property was not at use.

The case will now be back in district court.

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