Judge Rejects Most Trade Secret Theft Charges against Raytheon

A federal district court judge in Arizona has ruled that most of the trade secret theft claims made by Ordnance Technologies Inc. against Raytheon Co. are time-barred because Ordnance failed to sue within three years after first notifying Raytheon of the alleged theft.

Ordnance and Raytheon had entered into a technical assistance agreement in 2002, under which Raytheon was to provide services relating to integrating Ordnance’s Lancer Multiple Warhead System into Tomahawk cruise missiles.

This agreement included a provision under which Raytheon agreed not to disclose or use Ordnance’s proprietary information.  An amendment to the agreement gave Ordnance full rights to use and manufacture the warhead designs.

In January of 2009, Ordnance learned that Raytheon had made an agreement with the US government for a “Joint Multi-Effects Warhead System” to modify the Tomahawk.  Soon after, Ordnance accused Raytheon of infringing its intellectual property rights in the warhead designs.

In July of 2009, the US Navy awarded Raytheon a $12.8 million contract to develop the warhead.

After correspondence and meetings between the parties, Ordnance finally sued Raytheon in May of 2012.  Raytheon filed a motion for summary judgment on nine out of ten of Ordnance’s claims, including its claim for trade secret misappropriation, saying that they were barred by the three-year statute of limitation.

Raytheon also denied any theft of trade secrets, saying that no proprietary Ordnance information was used in its designs.

The court granted Raytheon’s motion, saying that Ordnance knew of the alleged trade secret misappropriation in January of 2009 and that the fact that Ordnance was not aware of the extent of the misappropriation until later was not relevant.

The judge also said that there was no evidence Raytheon caused Ordnance to delay taking action by failing to deliver documents showing that it had not misappropriated Ordnance’s trade secrets.

Only a single breach of contract claim now remains to be litigated in the case.

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.

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