A Massachusetts court this month denied a request by a security and detection division of OSI Systems [OSIS] seeking to stop Viken Detection from using a software technology developed by the company’s chief technology officer while he worked for American Science and Engineering (AS&E), which was later acquired by OSI.
In March, AS&E filed a lawsuit in the Middlesex County Superior Court alleging its former employee, Peter Rothschild, and Viken, which he founded, stole trade secrets and breached a contract with the company.
While at AS&E, Rothschild developed AusSim, a software tool that ran on an open-source simulation software allowing the company to develop products more efficiently and quickly. Despite AS&E’s allegation that Rothschild’s use of AusSim at Viken amounted to trade secret theft, the court rejected this, saying the company’s permission for him to use the software while he worked for another company in 2004 demonstrates that the technology wasn’t a trade secret.
“ASE’s own CTO stated that he did not believe the AusSim tool was proprietary ASE to ASE or a trade secret,” Associate Justice William White, wrote in the June 11 decision on the motion by AS&E to grant a preliminary injunction against Viken. “Based on this, and the many years of Rothschild’s use of AusSim that followed, this court cannot conclude that ASE took sufficient measures to guard the secrecy of the AusSim tool.” White continued that “As a result, the Court concludes that ASE has not carried its burden of demonstrating a likelihood of success on the merits of demonstrating a protected trade secret.”
Viken and OSI’s AS&E unit make security detection products based on backscatter X-Ray imaging technology. Both companies will be competing for major new awards that U.S. Customs and Border Protection has planned as early as later this year for scanning systems that can inspect cargo-carrying trucks and passenger vehicles more efficiently and quickly than currently deployed systems.
Viken, in a press release on Tuesday, charges that the timing of the AS&E suit against it, so close to the CBP competition where close to $600 million will be spent in the coming few years, appears “aimed at clouding the reputation of Viken and its CTO Peter Rothschild, falsely depicting Viken’s use of an open-source software as IP misappropriation.”
In a separate lawsuit, Viken is suing another detection company, Videray Technologies, for stealing its handheld imager technology and repackaging it as its own. Videray was founded by a former Viken employee. In its press release on Tuesday, Viken said that Videray’s CEO, in defense of his company, has received “back-room” support from AS&E “with a keen interest in hurting Viken.”
Viken said it is now investigating these claims that AS&E is out to damage it.
“Viken is perplexed that AS&E would even bring a case like this one, based on transparently false allegations and clearly unreliable testimony,” Jim Ryan, Viken’s CEO, said in a statement. “We are now investigating AS&E in light of this lawsuit and the Videray CEO’s allegations against them.”
In an interview with HSR, Ryan said that AS&E’s actions “at the end of the day, it’s not going to stop us from our mission,” which is developing “unique” technology for border security.
Ryan’s comments echo ones he made in March following disclosure of the AS&E lawsuit when he said the company “will vigorously defend itself and is prepared to pursue all available claims and counterclaims against AS&E.”
OSI did not reply to a query for comment on the court’s decision.