FLIR claims win in long-running Raytheon dispute

26 Nov 2014

Jury verdict in Texas court clears infrared imaging company of infringing trade secrets.

Imaging and surveillance company FLIR Systems has welcomed a jury verdict that has cleared it of misappropriating trade secrets in a long-running dispute with defense contractor Raytheon.

The case, heard in the US District Court for the Eastern District of Texas, related to the way in which infrared detector maker Indigo Systems – acquired by FLIR way back in 2004 – manufactured its products.

Raytheon's claims date back to March 2007, and were based on allegations that Indigo had hired former Raytheon employees to obtain trade secrets relating to infrared camera technology used in military and commercial applications.

Prior to that Indigo had beaten Raytheon to some high-profile contracts such as providing cameras to Northrop Grumman for the F-35 Joint Strike Fighter program. According to reports, that aroused suspicion, not least because Indigo had been founded by former Raytheon employees back in 1996.

Having subsequently disassembled an Indigo camera, Raytheon also claimed breach of contract and patent infringement, while counterclaims from FLIR and Indigo alleged that Raytheon's patents involved in the suit were invalid.

In August 2009, a federal court in Texas dismissed most of Raytheon’s claims, on the basis that the defense firm should have brought the lawsuit much earlier, when it first suspected the alleged wrongdoing. However, that decision was overturned unanimously in the federal appeal court three years later, while in 2010 the two parties settled the patent claims with a $3 million payment from FLIR to Raytheon.

Jury rejects Raytheon allegations
Now, a Texas jury has firmly rejected the remaining trade secret allegations. Raytheon had listed 31 different items, but court documents seen by optics.org show that the jury decided that only four of them were in fact trade secrets – and that neither FLIR nor Indigo had misappropriated them anyway.

The 27 alleged “secrets” rejected by the jury included passivation of indium antimonide detector material, diamond point turning with automated leveling, and the use of a silver/gold alloy wire for an electrical interface.

The four items judged to be trade secrets were a method for sequential vacuum baking, a static wafer clean-up etch process, a wicking method using epoxies, and an in situ solder seal package assembly.

As a result of the jury verdict, no damages were awarded against FLIR or its subsidiary. Yet to be decided is whether the court will award them their legal fees - which will be not inconsiderable, given the seven-year duration of the case - under the Texas Theft Liability Act.

FLIR CEO Andy Teich said in a company statement: "Today's finding from the jury confirmed our belief that Raytheon's lawsuit was wholly without merit.

"We look forward to having this case behind us and continuing to create the world's most innovative, high performance, affordable, and user-friendly sensor systems for a growing number of customers."

Raytheon has yet to comment publicly on the jury verdict.