07/08/2008
UWCHLAN -- A U.S. District Court recently issued several rulings in favor of Innovative Solutions & Support Inc. in a two-year-old intellectual property case.
The U.S. District Court for Tennessee's western district awarded Innovative Solutions $17.2 million in exemplary and punitive damages in its case against Kollsman Inc., an Elbit Systems Ltd. subsidiary, J2 Inc., Joseph Caesar, James Zachary and Zachary Technologies Inc.
Last November, Innovative Solutions was awarded $6 million in compensatory damages as part of the same intellectual property case, bringing the total to more than $23 million.
Caesar, a former Innovative Solutions employee, and Zachary, a commission sales representative, are accused of misappropriating company trade secrets even though they signed non-compete agreements, explained Innovative Solutions chief financial officer John Long.
"Their actions partially took away our ability to compete. We've put lots of money into making sure this won't happen again," Long said
Founded in 1988 by Geoffrey S.M. Hedrick, the company's current chairman, Innovative Solutions designs, manufactures and markets advanced monitoring systems for the aviation industry. The systems include monitoring aircraft separation distances as well as air speed, altitude, and fuel and instrument measurements.
It was Innovative Solutions that determined, for instance, that planes, using sophisticated new technology, could
safely fly as close as 1,000 feet to each other without endangering crew, aircraft or passengers. The previous safe distance was 2,000 feet.
Innovative Solutions president Roman Ptakowski said a jury found Caesar and Zachary had misappropriated six Innovative Solutions trade secrets.
Elbit, Kollsman's parent company, responded, "These rulings are neither supported by the evidence on the record not by the applicable law and it intends to evaluate options available to vigorouly defend itself, including filing an appeal upon the entry of a final judgment in the case."
Based in Haifa, Israel, Elbit said the ruling will affect its second-quarter 2008 earnings to the tune of $10 million, after-tax, taking into account reserves previously recorded.
