Monday, May 12, 2008, 5/12/2008 11:00:00 AM

Eaton Aerospace Trade Secrets Criminal Case Has Seven of Twelve Counts Dismissed

By Todd
The Mississippi Clarion Ledger is reporting that 7 of 12 criminal charges brought against five former Eaton Aerospace employees have been dismissed and that federal prosecutors intend to appeal that decision.

Federal District Court Judge Barbour threw out the first five counts of the latest indictment, saying the charges were unconstitutionally vague. The charges were one count of conspiracy to defraud the United States, two counts of theft of trade secrets and two counts of wire fraud.
He also threw out two counts involving theft of trade secrets, saying they were barred by the statute of limitations.

The remaining charges in the indictment allege the men defrauded Eaton by scheming to "steal, take and carry away proprietary information" and then using that information "to compete against Eaton for government and commercial contracts."

The indictment alleges the former Eaton employees had access to a variety of confidential information, as well as other information constituting trade secrets, that belonged to the company.

"In July 2001, the defendants approached Frisby regarding employment with Frisby," the indictment says.

"It was an object of the conspiracy that the defendants would and did leave their employment at Eaton and take engineering jobs at Frisby, where they would and did compete directly against Eaton for aerospace contracts for hydraulic pumps and motors."

The indictment further alleges the defendants conspired to enrich themselves while at Frisby through salaries and business by using property stolen from Eaton. Also, they attempted to recruit others, including engineers, to participate in and work for Frisby and to continue to acquire Eaton technology from former and present Eaton employees, according to the indictment.

In addition to the criminal charges, Eaton - a Fortune 100 business - filed a $350 million lawsuit against the former employees and Frisby, accusing them of stealing trade secrets.
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