Mar. 10—Aerospace supplier Moog Inc. said stolen trade secrets and an all-out raid of its flight software employees by an aviation startup in California have jeopardized its foray into unmanned helicopter aviation.
The Elma company called the data allegedly stolen by a former employee "breathtaking in its scope."
Moog, in a federal lawsuit filed this week in Buffalo, said a software engineer who quit the company's Los Angeles-area office in December took more than 136,000 digital files related to flight control software to her new employer, Skyryse, a six-year-old startup.
Moog accuses Misook Kim, a former employee, of copying to an external hard drive files that contained the source code of Moog's proprietary software programs, which it said took more than 15 years to develop by dozens of Moog engineers at a cost of hundreds of millions of dollars.
Moog said it is not aware of any other instance where a Moog employee copied to an external hard drive even a fraction of the data it said Kim did in November.
According to the lawsuit, "What Kim did is entirely without precedent at Moog."
The lawsuit comes at a time when Moog and some 20 other companies are trying to emerge as a leader in unmanned helicopter aviation. There is no established market now, and no industry leader, Moog said in its lawsuit. Whichever company wins that race stands to dominate the market by being the first with a viable product. Skyryse gaining access to data related to Moog's flight control technology has given it "a substantial and unfair competitive advantage" by saving it tens of millions of dollars and several years in developing and testing software, according to Moog's lawsuit. Moog has invested approximately five years of research and development into unmanned helicopters and 15 years in developing the software, the company said.
"By stealing Moog's source code and other proprietary information ... and crippling Moog's software engineering workforce, Skyryse has jumped to the front of this race to be first to market and has slashed Moog's tires along the way," according to the lawsuit.
The defendants in the lawsuit are Skyryse, based in El Segundo, Calif.; Robert Alin Pilkington, Moog's former software manager; and Kim, a former software engineer for Moog. Pilkington and Kim worked at Moog's Torrance, Calif., facility before taking key jobs at Skyryse.
Skyryse did not respond to a request for comment and the two employees named in the suit could not be reached. Neither the defendants nor any lawyers representing them appeared at a virtual status conference Wednesday in federal court.
Moog, an aerospace and defense company with annual sales of approximately $3 billion and a global workforce of more than 13,000, designs and manufactures electric, electro-hydraulic and hydraulic motion controls and systems for applications in aerospace, defense, industrial and medical devices. Skyryse is a venture-backed tech aviation start-up founded in 2016 that is privately held. It announced in October $200 million in venture funding to develop flight automation technology, and Moog said its employees hired from Moog are believed to form a significant portion of its technical workforce.
Moog accuses Kim of delivering — under Pilkington's instructions — to Pilkington and Skyryse data files containing Moog's trade secrets and proprietary information that she copied from Moog.
"She essentially copied everything that Moog's flight control software engineering teams had worked on over the past 15 years," according to the lawsuit. "It is impossible to quantify the amount of monetary investment, software engineering hours, and other resources that have gone into developing, testing, and certifying all of these programs and applications. This information is truly priceless and represents the highest level of intelligence and wisdom of Moog's smartest architects of the past 15 to 20 years. Thousands of employees and millions of hours of work were used in building, testing, and certifying the software and programs copied by Kim."
Skyryse essentially raided Moog's software engineering force in California, and the loss of critical developers and engineers presents "substantial disruption and jeopardy to Moog's ongoing business," according to the lawsuit.
The 11-count lawsuit includes six counts, including breach of contract and unfair competition, that accuse Pilkington and Kim of scheming to solicit away employees of Moog while still employed by Moog and accuse Skyryse of raiding Moog employees to gain access to trade secret information.
Moog had dealings with Skyryse beginning in mid-2018, when Skyryse said it wanted to offer on-demand helicopter transportation to the general public. Under Skyryse's initial proposed business model, its goal was to eventually offer unmanned helicopters through an automated flight system. Moog would provide the helicopter flight control systems and Skyryse would install and implement the technology into their business, Moog said.
Portions of the publicly available court filing are redacted, so details about any agreements the two companies entered into in 2018 and 2019 remain unclear. But Moog said Skyryse's launch did not go as planned and failed. By October of 2019, Skyryse fired many of its employees and was looking to pivot its business model, according to the lawsuit.
A December 2019 press release from the California company announced it was offering an autonomous flight system as part of a flight control operating system.
"Skyryse had pivoted into exactly what Moog was doing, and the previously separated and defined roles for Moog and Skyryse became blurred," according to Moog's lawsuit.
Skyryse's website and news stories about its business plan indicate that the company has pivoted to selling its flight control technology to both helicopter and airplane makers and, as Forbes magazine put it, "to developers of futuristic electric and hybrid air taxis, saying that its system will allow anyone to control an aircraft after 30 minutes of training with just a touchscreen tablet or a joystick."
Moog employees who have turned down Skyryse's job offers have said they were pitched key, lucrative positions to help the startup pursue its goal of extracting flight control functions to an iPad type of interface, with the idea that anyone who can use an iPad can fly a helicopter.
Suspicious of its employees taking jobs at Skyryse, Moog in late January had its security operations team look into whether individuals who had left Moog or were about to leave for Skyryse had copied any Moog data before their departure, according to the lawsuit.
Moog said its investigation revealed that Kim, while still a Moog employee, copied a significant volume of data from Moog's internal servers to an external hard drive, amounting to greater than 136,000 files, less than one month before her last day at Moog and less than one week after Pilkington, her supervisor, left Moog for Skyryse in November.
Timestamps for Kim's user account show that the copying of Moog's internal server data to the external hard drive happened between 3:16 a.m. and 7:33 a.m. local time in California on Nov. 19. The copied material included 43,960 source code files; 5,377 spreadsheets; 2,831 document files; 9,003 image files; and 404 presentation files. The data copied included nearly all of the source code, documentation, and related information regarding the composition, testing, and certification of Moog's base flight control software and project-specific applications.
Each employee has their own "branch" or location on Moog's server, where they can store sensitive materials they need access to as part of their work, according to the lawsuit. Moog's investigation showed that Kim used Pilkington's branch to copy the data onto the external hard drive, the company said.
"The file path thus shows that Kim went into Pilkington's branch and copied everything that Pilkington worked on under that branch, as well as substantial additional materials that both Kim and Pilkington had access to during their employment at Moog," according to the lawsuit.
On Jan. 28, Moog requested that Kim return the company-issued external hard drive she had in her possession. Three days later, Kim's sister, who also works at Moog, returned on Kim's behalf a hard drive to Moog. But it was not the external hard drive device Kim had used to copy Moog's data, and it had been wiped clean, the company said in its lawsuit.
On Feb. 18, Moog sent another letter to Kim demanding return of the external hard drive in question. According to the lawsuit, Kim called a human resources employee at Moog and said she had possession of the Moog external hard drive and had used it to download a large set of files "purportedly to help other Moog employees after her departure, and that she had erased all the files from the drive."
"This explanation made no sense," Moog said in its lawsuit. "Kim had no reason to take the unprecedented step of downloading nearly 137,000 files, the vast majority of which she had never worked on and had no use for at any time in her employment at Moog, let alone the final few weeks. No other employees indicated that they would need to continue working with Kim or needed her to maintain possession of the utmost secure and sensitive data after her time at Moog, let alone while working for competitor Skyryse."
The second hard drive Kim eventually returned was also wiped clean. And a forensic inspection revealed that a third external hard drive, which has not been located or returned to Moog, was connected to one of Kim's laptops several times in late November 2021.
"There is no telling what Moog data exists on this third hard drive due to Kim's deliberate attempts to cover her tracks," according to the lawsuit.
Aside from trade secrets, "Skyryse made the strategic decision to take what it could not develop quickly enough and engage in a 'full court press' to take from Moog as many key employees as possible so that it can shortcut its own timeline and costs in developing automated flight software, according to the lawsuit. In recent months, Skyryse has engaged in "a methodical, intentional, and pervasive raid of Moog's developers" who built its flight control software and applications. Seventeen of 20 Moog employees who have quit to join Skyryse have done so since November, including 12 since January.
A former Moog group vice president is currently Skyryse's chief operating officer, and Moog's former chief technology officer now holds the same post for Skyryse.
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