Virgin Galactic (“Galactic” or the “Company”), the sub-orbital space flight arm of Richard Branson’s Virgin empire, filed suit last week against competing space flight company Firefly Systems, Inc. (“Firefly”) and two of its officers, alleging that Firefly misappropriated its trade secrets and confidential information. The lawsuit is the latest salvo in an on-going battle (or as some might call it, a “star war”) between Galactic and the CEO of Firefly, Thomas Markusic, a former employee of Galactic who started the rival company in late 2013. While the Company has pending claims in arbitration against Markusic, this new suit in California Superior Court attacks both Firefly and Markusic’s business partners for knowingly using and benefitting from the alleged misappropriation.
According to the Complaint, Galactic hired Markusic in 2011 as its VP of Propulsion. Markusic’s role gave him intimate knowledge of the Company’s research into liquid rocket propulsion, space vehicle architecture, “aerospike” technology, and other confidential projects. While still employed at Galactic, Markusic allegedly solicited business partners and founded Firefly based on concepts and data he obtained in the course of his work. Galactic maintains that Markusic and Firefly relied on and continues to use the Company’s technical and marketing information, as well as Markusic’s engineering notes from his tenure at Galactic, to develop products such as a recently announced small launch vehicle.
Galactic’s suit against Firefly and Markusic’s business partners comes after two years of arbitrating trade secrets claims against Markusic himself. That arbitration has been marred by discovery disputes, allegations of spoliation, and a recent attempt (after 2 years of arbitration) by Markusic to challenge the arbitrability of the dispute. Galactic now alleges that Markusic’s business partners knew that Markusic was providing them with Galactic’s protected trade secrets, and nonetheless used and continue to use that information to build and market their products. If proven true, Galactic asserts that Markusic’s business partners may be personally liable for misappropriating trade secrets. Complaint at 19 (citing PMC, Inc. v. Kadisha, 78 Cal. App. 4th 1368, 1383 (2000), as modified on denial of reh’g (Apr. 7, 2000)).
Interestingly, Virgin Galactic, LLC v. Firefly Systems, Inc., No. BC637340 (Sup. Ct. Cal. Oct. 13, 2016) is not the first space-related trade secrets case Trade Secrets Trends has covered this year (see our post of June 16, 2016). While the outcome of these cases are as yet unresolved, it is safe to say that not many people predicted that the new battle for space primacy would be fought in courtrooms here on earth.