Bell Owes $16M in Trade Secrets Dispute with Vendor, Jury Rules

Rogerson Aircraft Corp., a California-based avionics supplier, filed a lawsuit in 2017 against Bell Helicopter Textron Inc., alleging the aerospace manufacturer unlawfully shared its trade secrets with a competitor. Rogerson, which provided digital avionics and display systems for Bell's helicopters for years, claimed that Bell’s actions were a ploy to avoid a costly redesign and Federal Aviation Administration (FAA) approval process for replacement products.

Rogerson argued that Bell engaged in unfair competition by passing confidential information to a rival supplier, enabling the competitor to produce similar components. In response, Bell contended that it held rights to the intellectual property at issue, asserting that both companies had access to the technology in question and dismissing Rogerson’s claims as unfounded. According to Bell, their agreement allowed both parties to use the proprietary data and designs involved in developing the systems.

The Trial and the Jury’s Decision

After a lengthy trial, a Texas jury found Bell Helicopter liable for breaching its contract with Rogerson but cleared it of misappropriating trade secrets. Although Rogerson had initially sought a $127 million judgment, the jury awarded the supplier $16 million, including $14 million specifically for damages related to unfair competition.

The jury ruled that Bell and Rogerson did not have joint ownership of the disputed trade secrets and that Bell’s actions, though contractually improper, did not constitute theft of Rogerson's intellectual property. Bell’s counsel maintained that the data in question was Bell’s property and that they acted within their rights, as the contract allowed shared usage.

Dispute Over Unanswered Jury Question

Following the verdict, Rogerson's legal team raised objections regarding an unanswered jury question related to exemplary damages. Attorney Patrick T. Schmidt from Quinn Emanuel Urquhart & Sullivan LLP argued that the jury improperly skipped Question 19, which pertained to potential punitive damages. Judge Megan Fahey dismissed the jury immediately following the verdict, which Schmidt argued precluded further deliberation on the question.

Judge Fahey responded by ruling that Rogerson’s counsel’s objection was "improperly raised" after the jury’s formal dismissal, and therefore could not be addressed retroactively. She noted that the objection was only raised after the jury returned an outcome unfavorable to Rogerson, thus constituting what she described as an "unobjected-to error."

The Aftermath and Broader Implications

The verdict represents a significant, though partial, victory for Rogerson, as it did not secure the entire $127 million it sought, but it did succeed in proving Bell’s contractual violation and unfair competition. Rogerson's team has not indicated whether it will pursue further action regarding the unanswered jury question, which could have added to the financial repercussions for Bell.

This case underscores the complexities of trade secret disputes, especially in situations where proprietary information is shared between long-time collaborators. For companies like Bell, the verdict may encourage closer scrutiny of agreements with vendors and reinforce the importance of safeguarding trade secrets, while vendors like Rogerson may need to consider stricter protections around shared technology.

The Law Firms Involved

Representing Rogerson, Quinn Emanuel Urquhart & Sullivan LLP worked alongside Brackett & Ellis, with lead attorneys Patrick T. Schmidt and Joseph F. Cleveland Jr. spearheading the case. Known for their expertise in complex litigation, Quinn Emanuel’s team emphasized the significance of Rogerson’s trade secret claims.

Bell’s defense was handled by Kelly Hart & Hallman LLP and Crowell & Moring LLP, with key attorneys including Lars L. Berg and Kent Brian Goss. Both firms brought extensive experience in corporate defense and intellectual property, positioning Bell to robustly contest Rogerson's allegations.