Monday, November 05, 2007, 11/05/2007 10:45:00 AM

Departed Employee's Lack of Credibility Key to Robot Injunction

By Todd
We don't usually do this in our blog but we'd like to take this opportunity to commend to you the site of XConomy which can be found here: http://www.xconomy.com/. This site was new to us prior to our watching and commenting on the robot trade secrets case currently being litigated in federal court in Boston and we've been VERY impressed with this site's coverage and comprehensive handling of the inner workings of a trade secrets suit. We've bookmarked them and recommend that you consider doing the same if you routinely track the information economy.

NOW, our blog is about trade secrets matters. This iRobot vs. Robotic FX trade secrets suit is fascinating as it involves departing employees, the military-industrial complex, hundreds of millions of dollars in government contracts for military-usable robots, the current safety of soldiers in Iraq, third-party intervention by military procurement officials, and allegations of lying and deception. Our experience in trade secrets litigation reveals that it's not a real good case until sometimes is forced to lie and dissemble.

The federal judge in the iRobot case appears convinced that the one lying at this point is Robotic FX's founder, and former iRobot employee, Jameel Ahed. As XConomy is now reporting:

"Judge Gertner had damning words for Ahed, who admitted that he had destroyed or discarded physical evidence and electronic data relating to the case. “His spoilation [sic] of evidence, along with other acts in which Ahed engaged just before he left iRobot, gives rise to a strong inference of consciousness of guilt,” Gertner wrote.

And in the end, Ahed’s credibility was at the crux of the ruling. “Where Ahed’s testimony was critical…the court finds him not to be a credible witness, and accordingly finds that the plaintiff has demonstrated a reasonable likelihood of success on the merits,” Gertner wrote.

We speak about trade secrets and related unfair competition matters to groups of attorneys and corporations interested in these matters. One of our focal points in our presentations is commonly that it is some act of deception or surreptitious activity that these cases routinely turn on. The iRobot trade secret litigation appears to be no exception.

As for the injunction, Judge Gertner found in her 30-page public ruling that iRobot was likely enough to prevail in a full trial over the trade-secret allegations that the company was entitled to an injunction. Otherwise, she said, iRobot would suffer “irreparable harm” and Robotic FX would have a “substantial first-mover advantage” over iRobot in competition for future robotics contracts. “Allowing the Negotiator to be sold would cause the plaintiff to irrevocably lose market share to which it is entitled,” Gertner wrote.

In her ruling, Gertner said that the Negotiator’s tank-like tracks seemed to have been based on technology that Robotic FX founder and CEO Jameel Ahed illegally appropriated from the design of iRobot’s own Packbot robot when he was an employee there prior to June 2002. She enjoined Robotic FX from selling any product that embodies those secrets—meaning, in effect, that the company cannot deliver the Negotiator to the Army, or sell it anywhere else, in its current form.

Robotic FX has three big problems at this point: (a) the judge assigned to their case thinks they created their company's product using the secrets of another company; (b) their key witness isn't someone who is credible; and (c) the cash flow that was supposed to come in from the Pentagon is now gone. They're facing legal and actual destruction at this point.

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