Panoz-led Delta Wing consortium files lawsuit against Ben Bowlby and Nissan
Pic: Marshall Pruett
The Delta Wing consortium, led by Don Panoz, has filed a lawsuit against its former designer Ben Bowlby and former engine-supplier Nissan for ?damages and injunctive relief arising out of theft of confidential and proprietary information, misappropriation of trade secrets, breach of contracts, unjust enrichment, fraud, and negligent misrepresentation.?
This comes less than two months after the Bowlby-designed Nissan ZEOD RC made its first demonstration run at Fuji. The lawsuit seeks to prevent Nissan from using any ??delta' or wing-shaped? vehicles.
A complaint was filed and entered into the system of the superior court of Jackson County, Ga., on Friday, Nov. 22, 2013, by Delta Wing, LLC, a business owned by Chip Ganassi, and Delta Wing Project 56, LLC, a business with multiple owners, including Ganassi and general manager Don Panoz.
The complaint names former Delta Wing designer and current Nissan director of motorsport innovation Ben Bowlby, Nissan global motorsports director Darren Cox, Nissan Motor Company, Ltd., Nissan Motorsports International Company, Ltd., Nissan International, S.A., and Nissan North America, Inc., and requests a finding of ?temporary and permanent injunctive relief, interlocutory injunction, and damages.?
The complaint by the Delta Wing group (referred to as DW, DWP56, or Plaintiffs) involves the various Nissan groups or individuals listed above (referred to as Bowlby, Cox, Nissan, or Defendants) in relation to the Nissan Zero Emission On Demand Racing Car (ZEOD RC) Le Mans-style racecar that was awarded an entry for the 2014 24 Hours of Le Mans under the ?Garage 56? program created by the Automobile Club de l'Ouest. The complaint also includes the Nissan BladeGlider concept vehicle, among other items.
The complaint states: ?This is an action for damages and injunctive relief arising out of theft of confidential and proprietary information, misappropriation of trade secrets, breach of contracts, unjust enrichment, fraud, and negligent misrepresentation. The Defendants have acted individually, as agents for each other, and in conspiracy with each other to commit the aforementioned actions, which have caused Plaintiffs damages and irreparable harm.?
The complaint also states: ?Defendants have misappropriated the trade secrets owned by DW and exclusively licensed to DWP56 and used such information and opportunities to compete with DW and DWP56, causing irreparable and ongoing injury to Plaintiffs. Defendants have further breached their contracts with DWP56 and engaged in fraud and negligent misrepresentation directed toward DWP56, which have caused DWP56 significant damages.?
Nissan, through a public relations representative involved with the ZEOD RC project, supplied RACER with the following statement on the topic:
?The Nissan ZEOD RC is a new design. Nissan does not green light any projects which it believes will contravene third parties' intellectual property rights.?BACKGROUND
The Delta Wing concept was created by renowned racecar designer Ben Bowlby (BELOW, pic: NISMO) while working for the Ganassi Racing Indy car team, and was originally presented by Ganassi Racing to the IndyCar Series as a potential successor to the ageing Dallara IR03/07 Indy car in 2010. A coupe version was also designed by Bowlby, but the concept pitched to IndyCar involved the open-top option.
With the contract being awarded to Dallara, Ganassi's Delta Wing, LLC offshoot continued into 2011 as he sought new alternative uses for the car. A deal was struck with Panoz, who spearheaded the Delta Wing's shift from open-wheel to sports car racing.
Under the Delta Wing Project 56 banner, Panoz, Ganassi, Highcroft Racing, All American Racers and others came together to build a roadster version of the car, which was selected as the inaugural vehicle to occupy ?Garage 56? at Le Mans.
Input from the ACO led to a shift in the car's design, with the custom tub Bowlby had penned being replaced by a homologated, crash tested Aston Martin AMR-One LMP1 tub serving as the new backbone for the Delta Wing. With AAR responsible for building the rest of the chassis, a Nissan-badged 1.6-liter turbocharged 4-cylinder engine was supplied by England's Ray Mallock Limited, and once the car passed a series of performance tests, the Japanese auto manufacturer signed onto the project.
With RML running the program at Le Mans (BELOW, pic: Marshall Pruett), the Delta Wing qualified for the 24 Hours of Le Mans, raced for seven hours until being hit and irreparably damaged, and generated significant interest throughout the event. The Nissan-powered roadster returned later in the year to compete at the American Le Mans Series finale at Petit Le Mans, marking its final outing in Nissan colors.
The roadster returned in 2013 with Panoz in charge of the program, and sporting a new, Mazda-based turbo 4-cylinder engine developed by Panoz's Elan Power Products firm. Its competition debut came at the 12 Hours of Sebring in March dressed in a new chrome livery with Delta Wing branding on the sides of the car. A brand-new, Elan Technologies-built coupe version of the Delta Wing was also displayed at Sebring, which made its debut at Circuit of The Americas in September (BELOW, pic: Marshall Pruett).
Nissan, having hired Bowlby, unveiled his latest creation, the hybrid petrol/electric ZEOD RC (BELOW, pic: NISMO), during June's 24 Hours of Le Mans, announcing it had received ?Garage 56? status for 2014. The ZEOD RC made its public debut in October, turning a demonstration lap during the Fuji WEC round.
INSIDE THE COMPLAINT
Of the many items contained within the 114-page complaint, a large volume of content is dedicated to the ownership and licensing rights of Delta Wing intellectual property (IP), and asks the Jackson County superior court to determine whether Bowlby and his work on behalf of Nissan infringes upon IP owned by DW that has been exclusively licensed to DWP56.
?Bowlby began his employment at Ganassi Racing in 2002, well before he ever thought of the Delta Wing,? the complaint states. ?In 2002, Bowlby signed an employment agreement with Ganassi Racing. That employment agreement, along with several amendments executed thereafter, provided Bowlby was required to promptly divulge all of his inventions to Ganassi Racing and those intellectual property rights to those developments, including the Delta Wing project, were the sole property of Ganassi Racing.
?Additionally, Mr. Bowlby's employment agreements with Ganassi Racing contained strict non-disclosure terms, which prohibited Mr. Bowlby from disclosing confidential information possessed by Ganassi Racing and its affiliates both during Mr. Bowlby's employment with Ganassi Racing and following his departure from the company.?
The complaint then adds: ?DW owns all intellectual property associated with the Delta Wing vehicle, including but not limited to all patents, trademarks, and trade secrets. As discussed in further detail below, DW has exclusively licensed its intellectual property rights to DWP56.
?Mr. Bowlby was terminated by Ganassi Racing in summer 2011; however, pursuant to the employment agreements executed by Mr. Bowlby and Ganassi Racing, Mr. Bowlby was not permitted to use or disclose confidential, proprietary, and trade secret information owned by Ganassi Racing and affiliates, including information related to the Delta Wing vehicle.?
To clarify their stance on the right to exclusively use the Delta Wing IP, the complaint goes on to explain new agreements created between DW and DWP56, and the rights and permissions granted to the Panoz-led DWP56 company, stating: ?DWP56 was formed for the sole purpose of developing the Delta Wing vehicle to participate in the 2012 24 Hours of Le Mans, as well as subsequent races,? and ?DWP56 entered into a licensing agreement with DW in July 2011, whereby DWP56 obtained an exclusive license to use the intellectual property related to the Delta Wing vehicle. The 2011 Licensing Agreement was set to expire following the 24 Hours of Le Mans race in June 2012.?
It continues, ?In January 2012, DWP56 reallocated ownership interests among the company's owners and executed a formal Limited Liability Company Agreement,? adding ?Additionally, in January 2012, DWP56 entered into a second licensing agreement with DW. The 2012 Licensing Agreement is set to expire in December 2016.?
Current and future-minded Delta Wing product development and sales rights for motor racing and street vehicle production are also documented in the complaint, stating: ?Pursuant to the 2012 Licensing Agreement, which remains in effect, DWP56 was authorized to develop the Delta Wing race car, to test and race the vehicle in various racing series including the American Le Mans Series, the 24 Hours of Le Mans, and other races, and to build, develop, supply, sell, promote and exploit production of the Delta Wing vehicle.
?DWP56 also received the right to develop the Delta Wing vehicle into a street car and to produce, market and sell the street-car variant of the Delta Wing. Pursuant to the DWP56 Licensing Agreement, any improvements to the intellectual property related to the Delta Wing became the sole property of DW, while DWP56 retained the right to use such property in connection with the Delta Wing vehicle. Additionally, pursuant to the DWP56 Licensing Agreement, DWP56 possesses exclusive ownership of all Delta Wing vehicles that it develops.? (Roadster, below, as it appeared at Sebring, 2013, with Mazda-based engine. Pic: Marshall Pruett).
The complaint alleges that Bowlby, who came up with the Delta Wing concept while working for Ganassi Racing, was bound by his employment contract which prohibited him from using ?confidential, proprietary, and/or secret information, inventions, discoveries, equipment, hardware, models, prototypes, studies, analyses, test results, improvements, processes, formulae, data, trade secrets drawings, developmental work, designs, know-how, expertise, registrations and or applications for patents, trademarks, copyrights, trade names, or other property rights, books and records (including customer lists, trade correspondence, production and purchase records)? without written permission from Ganassi.
As the complaint states, Bowlby was terminated by Ganassi in 2011. Bowlby would then go to work for the Ganassi co-owned DWP56 to ?serve as an engineer and aerodynamicist on the Delta Wing project until the conclusion of the 24 Hours of Le Mans Race in June 2012.? After leaving DWP56, Bowlby's services were secured by Nissan, where he was named as their director of motorsport innovation and continues to serve in that role.
The complaint states Bowlby received payment for his work on behalf of DWP56, yet did not sign an employment agreement which would have prohibited him from disclosing any new IP created while developing the car to compete at the 2012 24 Hours of Le Mans.
No mention is made within the complaint as to why the Delta Wing group paid Bowlby without a signed employment and non-disclosure agreement in place, but the document does state: ?Mr. Panoz and others at DWP56 approached Mr. Bowlby on several occasions asking him to execute the Employment Agreement. Mr. Bowlby represented that he agreed with the terms of the Employment Agreement and that he would execute the agreement.
?Despite his numerous promises to sign the Employment Agreement, and his verbal ratification of the terms of the agreement, Mr. Bowlby never formally executed the Employment Agreement, and he continued to access DWP56's confidential information while making assurances that he would execute the Employment Agreement.?
The complaint later adds the following content on the topic: ?DWP56 also provided Mr. Bowlby with access to confidential, proprietary, and trade secret information related to the Delta Wing vehicle in reliance on Mr. Bowlby's assurances that he would execute the Employment Agreement and would not disclose the trade secrets and confidential information exclusively licensed to DWP56.?
Despite the lack of a signed, DWP56-specific employment/non-disclosure document with Bowlby, the complaint contends Bowlby's original contract with Chip Ganassi Racing served as blanket protection for DWP56 and any future work done by Bowlby for other companies: ?Additionally, Mr. Bowlby remained subject to the non-disclosure provisions contained in Mr. Bowlby's employment agreement with Ganassi Racing, despite the fact that Mr. Bowlby was no longer employed by that company.?
Almost everything contained up to this point in the complaint appears to set up what could have motivated its creation and filing, where the following allegation is written: ?In June 2013, about eight months after Mr. Bowlby began working in one of Nissan's high level engineering positions, Nissan unveiled its new racing vehicle concept known as the ZEOD. Nissan has fraudulently made public statements that it spent an ?intense eight months of development, design and construction' of the ZEOD. In truth, Nissan was only able to ?develop' the ZEOD so quickly because Mr. Bowlby improperly transmitted and used DWP56's propriety information for the ZEOD project"without DWP56's permission.?
The visual similarity between the Delta Wing Coupe chassis, the DWC13, the Nissan ZEOD, similar styling on the Nissan BladeGlider and the fact that Bowlby has links to all three products is then raised in the complaint.
?The ZEOD is virtually identical in functional design and appearance to the Delta Wing, including the unique ?delta' profile of the Delta Wing vehicle,? the complaint states. ?Taking the similarities between the ZEOD and the Delta Wing along with Bowlby's defection to Nissan, it is a practical certainty that Nissan built the ZEOD using proprietary information that Bowlby provided without DWP56's authorization.
?With complete disregard for the intellectual property rights of DW and DWP56, Bowlby, Cox, and Nissan openly implemented proprietary technologies owned by DW and exclusively licensed by DWP56 in Nissan's ?delta' shaped ZEOD and BladeGlider. Bowlby, Cox, and Nissan based the design for the ZEOD on information that Bowlby directly derived (or simply took) from his prior work at DWP56.?
The complaint includes a depiction of the DWC13 and ZEOD from a rear three-quarter perspective (ABOVE), and later an overhead photo of the BladeGlider, followed by some of the most declarative allegations contained within the document: ?In the following comparison of the Delta Wing to the ZEOD, it is obvious that Bowlby improperly divulged virtually all of DWP56's proprietary information to Nissan with financial incentive.?From this close-up comparison of the same images, it is clear that Bowlby did not even bother to change the shape of the tail lights from one vehicle to the next incorporating the trademarked Delta Wing shape of its logo. Even more troubling, Nissan, a global automobile manufacturer with over 4 billion yen in annual revenue, knowingly implemented the stolen design in the ZEOD and then aggressively marketed the vehicle as its own.
?DW and DWP have suffered significant economic damage from introduction of the ZEOD, including lost sponsorship and racing opportunities for the Delta Wing. Motivated by even more profits, Nissan recently announced its intention to release a production version of a ?delta' shaped passenger automobile, named the BladeGlider" which is again based on the engineering design that Bowlby conceived for DWP56 and conveyed to Nissan without authorization.
?A photo of the BladeGlider (ABOVE, pic: NISMO) shows that Nissan has begun to implement DWP56's intellectual property into a consumer product with the intention of reaping enormous profits with complete disregard to DWP56's rights.?
The complaint then cites numerous magazine articles where the similarities between the Delta Wing, ZEOD and/or BladeGlider are made. In relation to the allegations of improper IP usage by Bowlby, the complaint cites a quote from Bowlby that was originally published by Autosport, stating: ?Moreover, Bowlby admitted that he based the design of the ZEOD on the existing Delta Wing concept owned by DW and exclusively licensed to DWP56: ?[The ZEOD] uses the narrow track technology of the Delta Wing and that gives us great efficiency. It is something we understand and it is an efficient way of getting around Le Mans.'?
NOTABLE COUNTS WITHIN THE COMPLAINT
The complaint then summarizes the following under a heading of ?Count I--Defendants Misappropriate Trade Secrets to Create the ZEOD and the Blade Glider,? stating: ?Upon information and belief, from and after June 2013, or at an earlier date, Bowlby, Cox, and Nissan, jointly, and in concert and conspiracy, engaged in the development of the ZEOD vehicle by virtue of the utilization of the trade secrets, proprietary information, and confidential information owned by DW and exclusively licensed to DWP56.?
Through the complaint, DW and DWP56 ask for a ?temporary restraining order and injunctive relief? against ?Bowlby, Cox, and Nissan,? stating: ?DW and DWP56 will suffer immediate and irreparable injury unless the Defendants' unlawful activities, including misappropriation of trade secrets, breach of contract, fraud, and negligent misrepresentation are enjoined. Specifically, Nissan's development of the ZEOD vehicle, the BladeGlider, and any other ?delta' or wing-shaped vehicle variants present an existential threat to DW and DWP56.
?The existence of the competing ZEOD vehicle has reduced publicity and demand for the Delta Wing vehicle. Additionally, DW and DWP56 will suffer irreparable harm if Nissan is permitted to develop, build, race, and market the ZEOD vehicle because DW owns the intellectual property for the Delta Wing and DWP56 possesses the exclusive right to race the Delta Wing vehicle pursuant to the terms of DWP56's exclusive license from DW.?
In brief, the complaint asks for the ZEOD, BladeGlider and any ??delta' or wing-shaped? vehicles Nissan has created or has in development to be stopped and prohibited from being used. No mention of receiving payment for the alleged use of DW IP in exchange for the continued use of ??delta' or wing-shaped? vehicles is mentioned as a desired outcome by DW or DWP56 in the complaint, adding: ?Further, DWP56 will suffer irreparable harm if Nissan is permitted to develop, build, and market the Blade Glider or similar vehicles because DWP56 possesses the exclusive right to develop street-car variants of the Delta Wing vehicle based on DWP56's license agreement with DW.
?DWP56 will suffer irreparable harm if Nissan is permitted to use any confidential or proprietary information from, related to, or in any way derived from the Delta Wing or Ben Bowlby's work at Gannassi (sic), DW, or DWP56 because DWP56 possesses all exclusive rights to that intellectual property.?The issue raised within the complaint regarding the Nissan ZEOD is one of shapes and IP, rather than hard parts and mechanical items. The ZEOD is a brand-new design, penned by Bowlby, and has been described as having no carryover parts from the Delta Wing. The complaint does not contain allegations of physical componentry being shared between the Bowlby's work on the Delta Wing roadster, Delta Wing coupe and the ZEOD.
Under the heading of ?Count II"Misappropriation of Trade Secrets,? where ?Bowlby, Cox, and Nissan? are named, further allegations contend: ?By virtue of his position as an employee of DWP56, Mr. Bowlby was allowed access to and did, in fact, receive confidential trade secret information owned by DW and exclusively licensed to DWP56,? and ?Additionally, while acting without authorization, Mr. Cox and Nissan did access confidential trade secret information owned by DW and exclusively licensed by DWP56.?
The complaint cites the Georgia Trade Secrets Act as the basis for alleging the contents within Count II: ?The information and property described in the preceding paragraphs consist in whole or in part of trade secret information and materials as defined by the Georgia Trade Secrets Act, O.C.G.A. § 10-1-760 et seq.
?Mr. Bowlby obtained the trade secret information owned by DW and exclusively licensed by DWP56 through his position of trust with DWP56 and otherwise, which gave rise to a duty to maintain its secrecy or limit its use.
?Mr. Cox and Nissan accessed and used the trade secret information owned by DW and exclusively licensed by DWP56 despite possessing knowledge that those trade secrets were acquired through improper means.?
The complaint's Count III section, ?Breach of Contract (Bowlby),? claims ?DWP56 and Bowlby orally entered an Employment Agreement containing express restrictions on Bowlby's disclosure and use of confidential, proprietary, and trade secret information related to the Delta Wing vehicle,? and states ?DWP56 has suffered damages, in an amount to be proved at trial, in the form of actual losses caused by the breach, including but not limited to loss of competitive advantage, loss of good will and marketing opportunities, and the diminution and destruction of the value of the trade secrets it exclusively licenses.?
The complaint also claims ?DWP56 is also entitled to the return of wages it has paid? Bowlby (RIGHT, pic: Marshall Pruett)
Moving to ?Count V: Breach of Contract"Sponsorship Agreement (Nissan),? the complaint alleges ?DWP56 and Nissan orally entered into the Sponsorship Agreement, whereby Nissan agreed to pay DWP56 the sum of $2 million to sponsor the Delta Wing at the 2012 24 Hours of Le Mans. Pursuant to the Sponsorship Agreement, Nissan also agreed to pay the testing and racing expenses for the Delta Wing for the 2012 24 Hours of Le Mans.?
The complaint then adds: ?The Sponsorship Agreement is a valid an (sic) enforceable agreement. DWP56 fulfilled its obligations under the Sponsorship Agreement. Nissan breached the Sponsorship Agreement by failing to pay the agreed amounts to sponsor the Delta Wing vehicle.?
Like other counts contained within the complaint, a request is made for a trial to be held: ?DWP56 has suffered harm as a direct and proximate result of Nissan's breach of the Sponsorship Agreement, and as a result of Nissan's material breach, DWP56 is entitled to damages in an amount to be proved at trial.?
Charges of fraud are asserted in Count VIII of the complaint against ?Bowlby, Cox and Nissan,? charges of ?Negligent Misrepresentation? against the same three parties is made in Count IX, and allegations of ?Civil Conspiracy? is leveled against the trio in Count X.
Delta Wing Coupe (Pic: Marshall Pruett)
SUMMARY OF COMPLAINT REQUESTS
The complaint concludes by listing 14 different actions or findings the Plaintiffs wish to receive from the Jackson County superior court, requesting:
· ?Grant Plaintiffs a trial by jury on all issues for which a right to jury trial exists;
· ?Issue a verdict in favor of Plaintiffs on all counts;
· ?Enter an order temporarily, preliminarily, and permanently enjoining Bowlby, Cox and Nissan from: misappropriating, using or disclosing (or attempting to misappropriate, use or disclose) any trade secrets or other confidential or proprietary information related to the Delta Wing vehicle; designing, developing, producing, testing, marketing, racing, or otherwise engaging in any activity with respect to any vehicle containing any of the confidential, proprietary, or trade secret information found in the Delta Wing vehicle, including but not limited to the vehicles and concepts known as the ZEOD and the Blade Glider; and possessing any documents of any nature containing confidential, proprietary, or trade secret information related in any way to the Delta Wing vehicle or to vehicles designed, developed, or produced using confidential, proprietary, or trade secret information related to the Delta Wing vehicle;
· ?Enter judgment against Bowlby, Cox, and Nissan for the misappropriation of the trade secrets owned by DW and exclusively licensed by DWP56 and award: actual, compensatory, and punitive damages; the disgorgement of all profits earned from the misappropriation; and attorney's fees pursuant to O.C.G.A. 10-1-763(b);
· ?Enter judgment against Bowlby for his breach of contract, and award: temporary, preliminary, and permanent injunctive relief in the form set forth above; and actual, compensatory, and injunctive relief as authorized by applicable law;
· ?Enter judgment against Bowlby for promissory estoppel, and award: temporary, preliminary, and permanent injunctive relief in the form set forth above; and actual, compensatory, and injunctive relief as authorized by applicable law;
· ?Enter judgment against Nissan for its breach of the Sponsorship Agreement and award actual and compensatory damages as authorized by applicable law;
· ?Enter judgment against Nissan for quantum meruit, and award the value of the services provided by DWP56 to Nissan;
· ?Enter judgment against Nissan for unjust enrichment, and award the value of any unjust enrichment to Nissan;
· ?Enter judgment against Bowlby, Cox, and Nissan for fraud, and award: temporary, preliminary, and permanent injunctive relief in the form set forth above; and actual, compensatory, exemplary, and injunctive relief as authorized by applicable law;?
· ?Enter judgment against Bowlby, Cox, and Nissan for negligent misrepresentation, and award: temporary, preliminary, and permanent injunctive relief in the form set forth above; and actual, compensatory, exemplary, and injunctive relief as authorized by applicable law;?
· ?Enter judgment against Bowlby, Cox, and Nissan for civil conspiracy, and award: temporary, preliminary, and permanent injunctive relief in the form set forth above; and actual, compensatory, exemplary, and injunctive relief as authorized by applicable law;?
· ?Award attorneys' fees under O.C.G.A. § 13-6-11; and
· ?Order such other relief as the Court may deem just and proper.?
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