ARG/US versus CharterX/Wyvern

 - September 28, 2006, 4:29 AM

Two leading providers of charter industry information are embroiled in a heated legal dispute focused on the alleged acquisition and misuse of proprietary data. A North Carolina judge issued an injunction in July against charter facilitator CharterX, its new Wyvern Consulting charter audit unit and a former ARG/US employee, Cliff Maurer, for allegedly using proprietary information from ARG/US computers without the company’s permission. AIN first learned of the action after receiving a press release from CharterX on September 11.

In an interview with AIN last month, CharterX president Jim Betlyon defended his company’s business practices and described Maurer as “honest as the day is long.” Betlyon said he engaged Maurer’s services because of his extensive knowledge of the regulations governing the charter industry.

According to Betlyon, ARG/US filed the complaint after learning that Maurer had assisted an ARG/US customer with a problem after he had resigned from ARG/US. “We’re in such a small business. [The customer] just picked up the phone and called Cliff. ARG/US had a problem with that.”

When asked what he hopes the outcome of all of this will be, Betlyon said, “I would hope that there would be an opportunity for me to tell [ARG/US president] Joe Moeggenberg that we don’t have anything and we don’t desire anything, but if they insist on pursuing it legally we’ll do what we have to do. Assuming that we can’t just shake hands and say let bygones be bygones, we have to file what’s called an answer.”

At press time, CharterX planned to file this answer with the court in Franklin County, N.C.–where Maurer resides–on or before September 21. According to Betlyon, CharterX has evidence of ARG/US’ executive vice president Mark Fischer
attempting to gain access to CharterX’s computer systems, and will include this information in its court filing.

Fischer told AIN that his company was obliged to send a notice to CharterX advising it of the filing of the lawsuit. He said he went to CharterX’s Web site to obtain an address but was blocked from proceeding because he did not have a password. “I never actually logged on,” he said.

Walter Brock, the Raleigh, N.C.-based attorney for ARG/US, told AIN that the timing of the lawsuit “had nothing to do with CharterX’s acquisition of Wyvern.”

He said that ARG/US first suspected foul play in early July and plans to file an additional complaint in the coming weeks citing a second former ARG/US employee. “[ARG/US] certainly believes that its intellectual property has been compromised, and we have reason to believe that that information has been used for the benefit of its competitors,” Brock explained. “We have not yet been able to determine the extent of the damage because we’re very early in the process.”

In a prepared statement provided to AIN, Paul Goodman of New York-based Cyruli Shanks & Zizmor, counsel on behalf of CharterX, Wyvern and Maurer, described ARG/US’ claims as “baseless and completely lacking any evidence that Maurer provided any ARG/US information to CharterX or Wyvern or that any ARG/US data whatsoever has been used in either CharterX’s or Wyvern’s businesses.”

“ARG/US’ claims are 100-percent disingenuous,” Wyvern founder and president Walter Lamon said in the same prepared statement. “We started the collection, monitoring and reporting of aviation safety information more than 15 years ago. We developed and delivered the first aviation-safety database in our industry. Over this time, ARG/US hired a former Wyvern programmer to develop its system and several of our auditors, and mimicked various Wyvern products and programs. We chose not to file a lawsuit as it would be unproductive for Wyvern; we’ve always been confident in our abilities to offer the aviation community in-depth safety intelligence, which has nothing in common with that of ARG/US.”

Betlyon said that relations have not always been so strained between the companies. A few months before last year’s NBAA Convention, Betlyon said, he proposed to ARG/US an information-sharing agreement similar to what CharterX recently established with Wyvern.

“We were both information providers, and there was a very small overlap. I’ve had dinner with Joe [Moeggenberg] several times, and looked at doing business together. I spoke with Wyvern and ARG/US on various proposals several times. I’ve known them for a while,” he said. However, nothing ever came of these talks. “In today’s business you have marketing, advertising and technology, and the legal system is one weapon in your control.”