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Business dispute over trade secrets turns ugly and expensive

Some people in New Jersey may have heard about the litigation between Eaton Corp. and Frisby Aerospace. It started out in 2004 as a business dispute over trade secrets, but quickly deteriorated into a battle that has cost both companies somewhere in the neighborhood of $50 million. The case has made its way into the Supreme Court of the state in which it was filed, and could end up back in the trial court depending on the outcome of the current appeal.

The appeal was filed based on the fact that Frisby alleges, and lower courts agreed, that Eaton attempted to influence the judge by hiring a lawyer in the state where the lawsuit was filed. A second allegation centers on a possible whistleblower at Frisby who may or may not have been promised employment by Eaton for his testimony. Depending on how the court decides on that issue, Eaton could be facing fines in an amount equal to at least $1.5 million.

If the Mississippi Supreme Court rules in favor of Eaton Corp., the case will be allowed to proceed in the trial court. Then, the initial trade secrets issues may be litigated. Those issues settle around some Eaton employees that left the company to work for Frisby. It is Eaton's contention that those employees took trade secrets with them and used them to benefit Frisby.

This business dispute has already gone on for nearly 10 years. People close to the litigation have been fired and hired during its course, and there could be more to come. Businesses in New Jersey that may have a similar dispute may seek advice and assistance to ensure their interests are protected.

Source: The Plain Dealer, "Eaton and Frisby argue trade-secrets lawsuit dismissal to Mississippi Supreme Court," Alison Grant, Aug. 3, 2013

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