SKT2 v. Rivet Industries — Trade-Secret Claims Over Military Wearable Technology Survive

Background

SKT2, which operates as Kägwerks, develops vest-mounted computing and communications equipment for soldiers. Its D.O.C.K. products connect body-worn computers or radios to an operator display, and the Army selected the technology for military-equipment programs. Kägwerks alleges that it gave Rivet samples and nonpublic specifications under a 2024 nondisclosure agreement after Rivet said it did not intend to build a competing product.

According to the amended complaint, Rivet and Robert Luke—then a civilian Army employee involved with the relevant programs—were already planning a rival system. Kägwerks alleges that Luke advised Rivet to mimic its technology, Rivet reverse engineered the protected sample, and Luke later joined Rivet. The suit asserts federal and D.C. trade-secret claims along with contract, fraud, interference, and conspiracy theories. Rivet and Luke moved to dismiss several counts.

The Court’s Holding

Judge Tanya S. Chutkan allowed the trade-secret claim to proceed against both defendants. Although information disclosed in an issued patent ordinarily cannot remain secret, Kägwerks identified more than 30 alleged secrets and limited its claim to material not disclosed in its patent. The patent described the docking system’s physical structure, but not most of the asserted software configurations or internal product roadmaps. The court also explained that a protectable secret may lie in a valuable combination of individually known features.

The court dismissed without prejudice Kägwerks’ implied-covenant claim because the nondisclosure agreement expressly governed the alleged misuse and reverse engineering; the implied covenant cannot duplicate negotiated contract terms or create a broader promise not to compete. The fraud count was likewise dismissed because it sought the same damages as the contract claim.

Other tort theories survived. The alleged loss of Army program funding made interference with prospective business advantage plausible. Allegations that Luke urged Rivet to replicate the product and helped it obtain confidential material supported intentional interference with the nondisclosure agreement. The conspiracy claim could proceed based on the alleged agreement and acts before Luke joined Rivet, when the intracorporate-conspiracy doctrine did not yet treat them as a single actor.

Key Takeaways

• Disclosing some technology in a patent does not necessarily destroy trade-secret protection for separate software, configurations, roadmaps, or valuable combinations kept confidential.
• A complaint should identify alleged secrets with enough specificity to separate protected material from patent disclosures and general industry knowledge.
• An implied-covenant claim cannot simply restate conduct already governed by an NDA’s express use and reverse-engineering restrictions.
• Pre-employment coordination between a company and a future employee may support interference and conspiracy theories even if later conduct falls within the corporate relationship.

Why It Matters

The decision illustrates how patents and trade secrets can protect different layers of the same product. Publishing a hardware architecture may surrender secrecy in that disclosed material, but implementation details, software configurations, and development plans can remain protectable if the owner identifies them and took reasonable steps to preserve confidentiality.

The ruling is only a pleading-stage decision: the court accepted the complaint’s factual allegations as true and did not decide whether Kägwerks actually owns valid trade secrets or whether the defendants misappropriated them. Even so, it offers a practical roadmap for defining secrets around a patented product and for drafting agreements that expressly restrict use, derivative work, and reverse engineering.