Simula, Inc. v. Autoliv, Inc.

In 1994, Simula, Inc. and Simula Automotive Safety Devices, Inc. (collectively, Simula) (plaintiff) contracted with BMW’s auto-parts vendor, Autoliv, AB, Autoliv, Inc., and its subsidiary companies (collectively, Autoliv) (defendant) to purchase Simula’s Inflatable Tubular Structure (ITS) for BMW vehicles. Simula and Autoliv entered a nondisclosure agreement related to the confidentiality of ITS technology, followed by a letter of intent for Simula to manufacture the ITS, granting Autoliv a conditional license for the technology. In 1995, Simula and Autoliv entered three agreements for the development, supply, and licensing of the ITS (agreements). The parties agreed to arbitrate any dispute “arising in connection with” the agreements. Before signing the agreements, Autoliv approached Mercedes Benz (MB) to purchase the ITS. Unbeknownst to Simula, because MB was BMW’s competitor, Autoliv agreed to produce a competing ITS product for MB’s use and disparaged Simula’s technology. Simula sued Autoliv for preliminary and permanent injunctions and damages. The lawsuit alleged antitrust claims under the Sherman Act, §§ 1 and 2, trademark violations under the Lanham Act, defamation, and misappropriation of proprietary information through breach of the nondisclosure agreement. The district court granted Autoliv’s motion to dismiss and motion to compel arbitration. Simula appealed.