Virgin Galactic can use contested trade secrets to develop ‘mothership’
US federal judge caveats that Richard Branson’s space company can only share the information with contractors on its ‘mothership’ programme | Move is latest in the trade secrets dispute started by Boeing, which accuses Virgin of stealing confidential information for its space tourism project.
Virgin Galactic can use confidential information allegedly belonging to Boeing with contractors, but only to continue to develop its new space ‘mothership’, a federal judge has ruled.
The order, pending final judgment, was filed in a Virginia court yesterday, June 20, and resolves a mid-dispute clash between the parties over whether Virgin should be allowed to use the allegedly proprietary information.
It is the latest development in the multibillion-dollar trade secrets row between the aerospace giants after Boeing accused Virgin Galactic of stealing its trade secrets in March this year.
Less than a month later, Virgin countersued, claiming that Boeing's work on the aircraft was “shoddy and incomplete”, and argued that it was owed damages of at least “the difference between the $45.6 million paid by Virgin Galactic to Boeing and the substantially lower actual value of Boeing's performance”.
According to Boeing, Virgin’s new ‘mothership’, named ‘Eve’, would be an improvement on its existing model and enable it to fly multiple commercial space flights a day.
Soured partnership
The dispute emerged following a partnership between the pair, in which Virgin Galactic, founded by Richard Branson in 2004, enlisted a Boeing subsidiary, Aurora Flight Sciences, in 2022 to create a new jet carrier and launch vehicle as part of its space tourism endeavours.
But the collaboration soured when Aurora ‘accidentally’ disclosed two key documents: one containing mathematical equations used to design and model aircraft to Virgin Galactic, and the other a set of test data.
According to Boeing, these documents contained trade secrets and required Virgin Galactic to return or destroy them if requested to do so.
But Virgin then “refused to honour its contractual obligation to destroy the two sets of trade secrets at issue” and maintained that it was entitled to use the information in further development efforts, including with a new partner, according to Boeing.
The project stalled, and Boeing alleged that Virgin Galactic had refused to pay £25 million to Aurora for its work to date.
In his order, filed in the US District Court for the Eastern District of Virginia, District Judge Claude Hilton gave the caveat that Virgin must not share the information with any third parties, other than those under contract with Virgin Galactic for the mothership development programme operating under a non-disclosure agreement.
The case is Virgin Galactic v The Boeing Company and Aurora Flight Sciences.
Boeing is represented by Stephen Cowen, Brian Rabbitt and Megan Lacy Owen from Jones Day. Virgin Galactic is represented by Brett Williamson from O’Melveny & Myers.
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