Viken Detection on Aug. 3 said that the a judge has rejected an appeal by OSI Systems [OSIS] American Science & Engineering (AS&E) business unit to reverse an earlier court decision denying a request by AS&E seeking to stop Viken from using a software technology developed by the company’s chief technology officer while he worked for AS&E, which was later acquired by OSI.

Viken said that last week a Justice of the Massachusetts Appeals Court upheld the ruling of the Middlesex County Superior Court.

That puts the ball back in OSI’s court.

“Two courts have told AS&E that its trade secret case has no likely path to legal success,” Jim Ryan, Viken’s CEO, said in a statement. “Its case rests on a discredited individual who clearly stole from Viken and lied about it. AS&E should drop its lawsuit immediately.”

The individual that Ryan is referring to is a former employee of Viken who is the CEO of Videray Technologies, which Viken is suing for misappropriating trade secrets related to the theft of a hard drive with proprietary data about Viken’s handheld imager the HBI-120. Viken also alleges that Videray’s CEO hacked into the files of its CTO, Peter Rothschild, “inserted AS&E materials, and planted evidence in Viken’s federal lawsuit in an apparent attempt to support his false testimony with false evidence.

Videray’s CEO has pleaded the Fifth Amendment right against self-incrimination.

“AS&E’s complaint admits that AS&E had no independent ‘evidence that Rothschild had used AS&E’s proprietary or confidential information to develop [Viken’s] product’ until it saw the testimony of the CEO of Videray Technologies,” Viken said, adding that “Videray’s CEO defended his actions by wrongly accusing Dr. Rothschild of using AS&E IP, and AS&E in turn based its case largely on the CEO’s false testimony.”

Viken believes that OSI is out to sully its reputation amid competition by Customs and Border Protection to spend around $600 million in the coming years on non-intrusive inspection technology.