The legal battle between SmartSky and supplier WSS continues unabated. Following their initial lawsuits filed in September WSS added a Federal counterclaim in early December. Ultimately the case will be decided by arbitration, but the question of injunctive relief while awaiting the arbitration remains open.
In a ruling issued late last year and entered into the record last week the American Arbitration Association ordered that “the Teaming Agreement unambiguously requires that all claims and counterclaims between the signatories thereto related to the subject matter thereof, including claims and counterclaims sounding in tort or arising from statute, be arbitrated.” This includes nearly all of the claims filed by both companies.
The arbitration process begins this week, with initial disclosures to be filed. Witness deposition may begin on 15 February. A number of additional witness deadlines will continue through May, with the hearing slated for the middle of the month.
The WSS counterclaim includes detailed accounting of the number of components produced for tower and aircraft installation. And, while the claims are decidedly one-sided and not corroborated, they identify significant questions about SmartSky’s ability to pay for and operate the promised next generation air-to-ground network.
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Arbitration and Injunctions
Ultimately the ruling on the monies owed and other facets of the case will be decided by arbitration. So will the intellectual property ownership details. But the Federal Court could issue an injunction against WSS, preventing it from marketing the ATG network infrastructure that SmartSky claims contains its IP. WSS continues to oppose those efforts:
…[T]his Court must predict what the arbitrators will likely do. That will be a difficult endeavor when the arbitrators will decide the issue of whose IP is in what product, and this Court will not be making that determination.
Moreover, WSS asserts that “SmartSky sees its IP in places where WSS does not, and it will be up to the arbitrators to decide which party is correct.”
It suggests mediation from the court to help resolve that issue in the months between now and when the arbitration is to be heard.
SmartSky offered a statement noting it “looks forward to adjudicating our claims and the WSS counterclaims in the appropriate venues of court and arbitration. The evidence we’ve uncovered through discovery thus far strongly supports our position that the WSS counterclaims are without merit.”
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