ALEXANDRIA, Va. (CN) - A company that developed a GPS and communication system for underground miners says its subcontractor secretly used its network to test and market a device developed by another company, bilking it along the way for hundreds of millions of dollars.
L-3 National Security Solutions sued Innovative Wireless Technologies for $118 million in Federal Court, alleging conspiracy, trademark infringement and interference with contract.
L-3, of Chantilly, Va., says it developed its "Accolade" wireless communications system in response to a congressional plea for research after the 2006 Sago Mine explosion that trapped and killed 12 miners.
L-3 says its system "provides a self-healing, redundant and survivable voice and data network, which allows voice and text communication among minors underground (peer-to-peer) and communication between below- and above-ground personnel."
The system shows a mining operations center where a miner is trapped in the event of a disaster.
L-3 says it contracted with Innovative Wireless Technologies (IWT) to help develop the system, under the terms that the intellectual property belonged to L-3.
It claims that IWT agreed, but started pushing for an unapproved, untested handset device after L-3's Accolade system was already in place in mines throughout the country.
After rejecting IWT's handset, L-3 says, it started hearing from clients in the mining industry that the rejected handset was being marketed as part of the Accolade system.
L-3 says it found out that IWT had its employees masquerade as L-3 employees at trade shows, to market its handset to L-3 clients. It claims IWT reps also went straight to the mines, duping companies into believing they were dealing with L-3, and that IWT used the Accolade system to test out its handset.
"On another occasion, L-3's sales staff was contacted to purchase its 'new' handset, referring to IWT's competing (and unapproved) product," the complaint states.
L-3 claims IWT used l-3 credentials and badges to get into trade shows where they marketed the handset.
"By virtue of these acts, IWT has enriched itself by millions of dollars at the direct expense of L-3, whose current and potential customers and distributors have been (and continue to be) confused and misled by IWT's conduct," L-3 claims.
L-3 also names seven IWT employees as defendants, including CEO Eric Hansen, along with Logi-Tec Inc. and Bookcliff Sales, which L-3 says helped IWT distribute the handsets to its customers.
L-3 seeks $118.8 million in damages and punitive on 11 counts, including business conspiracy, breach of contract and trademark infringement.
L-3 is represented by Mark Stancil with Robbins Russell in Washington, D.C.
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