8th Circuit Affirms Trade-Secret Ruling in Helicopter Case

In AvidAir Helicopter Supply, Inc. v. Rolls-Royce Corporation, 2011 U.S. App. LEXIS 24620 (8th Cir. Dec. 13, 2011), the Eighth Circuit decided that certain manuals prepared for helicopter repair were a protected trade secret.  Rolls-Royce Corp. (“RR”) developed and produced the Model 250 engine used in civilian and military helicopters.  AvidAir Helicopter Supply (“AHS”) is a Missouri company that focuses on the overhaul of compressor cases, one of three modules in the Model 250 engine.  Federal regulations require that an overhauled engine be certified for return to service.  In order to certify the return to service for a Model 250 engine, an overhaul shop must follow a procedure that has been approved by the Federal Aviation Administration.

The approved procedure can be found in Distributor Overhaul Information Letters (DOILs) issued first by RR’s predecessor and then by RR themselves.  DOIL 24 related specifically to the compressor case and was periodically updated. Because RR’s predecessor did not restrict redistribution of the earlier versions, AHS was able to acquire DOIL 24, revisions 1 through 7, sometime in the 1990s.  Thereafter, RR’s predecessor began protecting the revisions to DOIL 24 by including a proprietary rights legend and requiring its Authorized Maintenance Centers (“AMCs”), to whom the DOIL revisions were exclusively distributed, to execute agreements specifying the proprietary nature of the information, a prohibition on distribution, and a requirement that all proprietary information be returned at the end of the relationship.

This lawsuit arose over, among others, AHS’ use of DOIL 24, revision 13 – which had been drafted after RR began protecting its proprietary information.  The 8th Circuit affirmed the district court’s ruling that DOIL-revision 13 qualified as a trade-secret under the Uniform Trade Secret Act (“UTSA”).  The UTSA defines a trade secret as information “… that (1) derives independent economic value… [and] is not readily ascertainable by proper means… and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy”.

AHS argued the information contained in DOIL 24 could not provide independent economic value because there was only a trivial amount of information that was not readily ascertainable from prior revisions.  The Eighth Circuit dismissed this argument stating, “we need not examine [this issue] so long as the documents have a value independent of older publicly available versions.”  The Court then discussed RR’s efforts to maintain the DOILs secrecy and ruled that because the documents in question were misappropriated, the fact that there were reasonable efforts to maintain its secrecy was not defeated.

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