Monday, October 23, 2006
Eclipse Aviation Says Aspen Avionics' Machines Were Invented on Eclipse's Clock
By Andrew Webb
Journal Staff Writer
Eclipse Aviation has sued the founders of an Albuquerque startup, claiming their technology was invented on Eclipse company time and is therefore the sole property of the light jet developer.
The suit, filed this month in Bernalillo County's Second Judicial District Court, claims Jeff Bethel and Peter Lyons, two former Eclipse employees who now operate Aspen Avionics, developed their digital avionics systems, began marketing and fundraising and performed other business startup activities while they were on the clock.
Aspen Avionics designs and sells multifunction digital avionics instruments designed to fit in the instrument panels of older or low-end planes sold with analog instruments. Its first product, the AT300 Hazard Awareness Display, received Federal Aviation Administration certification in 2005, and was later named one of the top 10 products of that year by trade publication Aero-News Network.
Aspen received a multimillion-dollar venture capital round early this year from venture capital firms in California and Utah. New Mexico Co-Investment Partners, a fund set up to invest state money directly into businesses, kicked in a $1 million chunk of that investment.
The state has also invested about $20 million in Eclipse Aviation, which recently received Federal Aviation Administration type certification for its $1.5 million, twin-engine Eclipse 500 jet. Eclipse CEO Vern Raburn told reporters during an air show last week that the company expected to make its first customer delivery sometime this week.
Lyons did not return a call seeking comment on the lawsuit. Eclipse Aviation spokesman Andrew Broom said the company would not comment on litigation.
The suit seeks ownership of Aspen Avionics' AT300 technology, payment of monetary losses incurred because Eclipse had to outsource one or more devices that performed the functions of the AT300 product, receipt of any past and future proceeds from sales of the device, and unspecified punitive damages.
That Lyons and Bethel signed invention and nondisclosure agreements when they joined Eclipse Aviation in August 2002 and October 2002, respectively. They worked in different departments and had little professional interaction, according to the suit.
That the two, whose work for Eclipse included communications and navigation equipment development, and software development, purchased the domain name www.aspenavionics.com in October 2003.
That in 2004, the two e-mailed each other on Eclipse e-mail accounts about manufacturing products, raising capital for Aspen Avionics, and hunting for office space. The pair also had several meetings to view potential commercial space while on company time, the suit says.
That by mid-2004, Lyons' job performance at Eclipse had deteriorated and he had told Eclipse co-workers that he "worked eight hours a day on his new business while working at Eclipse over the prior eight months."
That the pair conspired to "plug" the AT300 device at aviation-related events they attended as part of their employment with Eclipse.
That the pair did not turn over paperwork and other material to Eclipse upon their departure, as required by the invention and nondisclosure agreement.
Bethel and Lyons incorporated Aspen Avionics in June 2004 and resigned in July of that year.
Eclipse alleges that the devices developed by Bethel and Lyons are similar to instruments required for Eclipse 500 jets. The company's invention and nondisclosure agreement, portions of which are contained in the suit, says that any invention or idea conceived by employees on company time and with company equipment is the property of Eclipse. It also says any invention developed within one year of termination of employment, and relating to trade secret information of Eclipse, also remains the property of the company.
The clause excludes any invention developed off company time and equipment and any that does not relate to Eclipse products or research and development.
"Since on or about July 2004, Aspen Avionics has manufactured, marketed and sold the AT300 product, with the knowledge that the product is rightfully owned solely by Eclipse," the suit alleges.
Eclipse this summer applied for patent rights to the AT300, according to the suit, claiming that the invention and nondisclosure agreement stipulates the technology belongs to Eclipse.