gavel and money

Judge Approves ASA Injunction Against LCI Over Company Trade Secrets

A circuit court judge in Elkhart, Ind., has ruled in favor of ASA Electronics in its quest for a preliminary injunction against Lippert Components regarding ASA proprietary remote-control technology.

The court case centers on former ASA employee Vincent Smith, who worked on ASA’s iN-Command system and later went to work for Lippert Components, where he assisted the company in developing Lippert’s OneControl remote control product – a rival system to iN-Command. ASA alleges that Smith shared information he learned about ASA’s iN-Command system with Lippert in violation of a confidentiality agreement he had with ASA when he left the company to work for Lippert.

In his Oct. 30 court ruling, Judge Michael A. Christofeno granted ASA’s request for a preliminary injunction that prohibits Smith from working for LCI for any control systems for the RV industry, including but not limited to Lippert’s OneControl system. Additionally, Smith and Lippert Components are enjoined from copying, reviewing or disseminating any files Smith may have taken from ASA.

iN-Command is a single body-control module that controls various electronic components of an RV. Development on the project began January 2014 in collaboration with Keystone RV and cost more than $2 million.

The court document explains how, in February 2018, Smith downloaded all iN-Command project files for the first generation of the device to a portable drive. That information was backed up onto another backup drive. The next month, he resigned from ASA Electronics and began working for LCI. During that time, the document says, Smith shared company secrets for the development of LCI’s OneControl system, which came from the drive connected to LCI computers.

Similar to iN-Command, OneControl allows users to remotely control parts of an RV, but instead utilizes separate control modules as opposed to iN-Command’s singular board.

Jerry Maffetone, ASA’s head engineer, testified that the file for the first generation that Smith took, which details how iN-Command works, was the most valuable as “it’s where (ASA’s) entire learning curve occurred.”

“It is unfortunate that companies must resort to the courts in order to protect their trade secrets and other sensitive business information,” said Tom Irions, CEO of ASA Electronics. “But it is also reassuring to know that when companies like ASA Electronics are forced to go to court, our local courts will not tolerate the misappropriation of such information. This preliminary injunction is not only a win for ASA, but for all local businesses who find themselves victimized by those who take the valuable trade secrets of others.”

The project file contained critical information, such as schematics, circuitry information, product cost and designs, and strategic plans for the future development of iN-Command.

“Lippert Components takes seriously its obligation to respect the confidentiality of other companies’ information. Our policy is to instruct new team members not to take any of their prior employers’ confidential information or to disclose or use any such information in their work for LCI,” said Jason Lippert, LCI’s president and CEO. “The court’s order regarding ASA’s confidential information is consistent with what LCI voluntarily offered to do from the very beginning of this matter. LCI is proud of its successful track record of innovation achieved fairly and without using other companies’ confidential information.”

At the same time of the events in early 2018, ASA Electronics Sales Manager Rick Carver left the company to join LCI as a sales representative. Carver had information regarding “sales and margins (he) had made on a per-customer basis,” according to the document. Evidence also suggests that Carver “solicit(ed) customers to move their business from ASA to LCI.” This is in violation of non-solicitation provisions in a previous contract.

Ultimately, the Elkhart Court concluded that Smith misappropriated trade secrets. Smith admitted to taking the file and testified that it was a mistake. Supplemental forensic evidence shows that Smith opened ASA’s proprietary iN-Command files in March 2018 while “working on the competing OneControl product,” according to the court document.

The Elkhart Court concluded that “the irreparable harm that (ASA Electronics) will suffer because of actual or threatened misappropriation if the injunction is denied greatly outweighs any harm that (Smith) will suffer by not being able to work for (LCI).”

In a Dec. 31, 2018, hearing, LCI said it would “gladly comply” with an injunction prohibiting any use of ASA files Smith took.

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