American Science and Engineering (AS&E) in early March sued a former employee and the security detection company he founded for allegedly stealing trade secrets, breach of contract, and a number of other charges.
Viken Detection, the company founded by Peter Rothschild, the former chief scientist of AS&E and currently the chief technology officer of Viken, called AS&E’s lawsuit “groundless” and that it is “based on concocted allegations of events that supposedly took place over six years ago, when Dr. Rothschild left AS&E to start Viken.”
AS&E, which is a business unit of OSI Systems [OSIS] that was founded in the 1950s, filed the eight-count lawsuit on March 6 in Middlesex County Superior Court in Massachusetts. AS&E is a developer and manufacturer of a broad portfolio of backscatter-based X-Ray security inspection systems. Viken, previously known as Heuresis, was founded in 2013 and also develops and manufactures backscatter-based X-Ray security inspection systems.
“The actions of Rothschild and Viken have caused, and will cause, irreparable damage to AS&E, including loss of AS&E’s share of the backscatter x-ray security inspection technology market and loss of goodwill,” AS&E charges in the suit. “Absent injunctive relief, AS&E will suffer further irreparable harm from Rothschild’s and Viken’s actions.”
Rothschild began his career at AS&E in 1994 and left in Oct. 2013. AS&E alleges that against his contract with the company, Rothschild recruited another employee to help form Viken, used proprietary technology he developed at AS&E at his new company, in particular a critical simulation software used to model product characteristics to save time and money in development and testing, stole trade secrets and confidential information to benefit Viken, and is exploiting those secrets by creating competitive products for Viken.
The lawsuit provides two examples where AS&E has lost to Viken for government contracts for handheld X-Ray systems. One, a $28 million deal with U.S. Customs and Border Protection and another for the New York Air National Guard.
AS&E, which was acquired by OSI Systems in Sept. 2016, has a number of large and small-scale non-intrusive inspection systems for scanning cargo containers, vehicles and parcels, in addition to its handheld system.
Viken, in addition to its handheld system, in 2019 introduced an under-vehicle inspection system and has sole several prototypes to CBP, and is planning in the first half of 2020 to have a drive-through portal scanner ready for evaluation.
Later this year, CBP is expected to initiate a major competition worth around $600 million for large-scale NII systems that will include drive-through scanners.
AS&E says Viken’s forthcoming portal scanner is similar to its Z Portal drive-through system and other AS&E products. It also says that given AS&E’s previous status as the only company selling backscatter-based handheld and vehicle scanning systems, it “had a reasonable expectation of securing these contracts.”
Viken isn’t backing down.
“Despite this attack from a company 50 times our size, Viken remains resilient and resolute in our mission to provide the most advanced, effective and safe drug interdiction technologies to officers on the front line,” Jim Ryan, CEO of Viken, said in a statement March 23. “With the full support of our Board of Directors, Viken will vigorously defend itself and is prepared to pursue all available claims and counterclaims against AS&E.”