A legal fight between two American military drone makers will move into discovery after a federal judge in Utah rejected most of the defendants’ attempts to have it thrown out. Senior US District Judge Ted Stewart ruled in late September that Red Cat Holdings and its subsidiary Teal Drones can pursue trade-secret claims against their former technology chief, George Matus, and his new company, Vector Defense.
The decision was reported by Courthouse News, as summarised by Briefly, on 28 September, and by Law360 on 30 September. Court records list the case under the federal law allowing injunctions against trade-secret misappropriation.
From founder to rival
Matus founded Teal Drones in 2014 and sold it to Red Cat in 2021 for $10m. He then ran Teal and served as Red Cat’s chief technology officer before announcing his departure in 2024. Red Cat alleges he used those roles to set up Vector Defense while still employed, giving the new company what it calls a “built-in blueprint on ideal drone composition” and sparing it normal development costs. Red Cat also alleges that a Croatian drone sale Matus was negotiating collapsed without explanation.
What survived and what did not
Claims for trade-secret misappropriation against both defendants will go ahead, as will claims for breach of fiduciary duty and fraudulent misrepresentation against Matus, a federal Computer Fraud and Abuse Act claim, tortious interference, and breach of the non-compete clause in Matus’s contract.
The judge dismissed a claim that Matus breached a non-solicitation clause by prompting about nine drone engineers to join Vector, saying Red Cat had not given enough detail. A claim under Utah’s computer-abuse law was also dismissed. The ruling follows an earlier setback for Red Cat, when the same judge refused a preliminary injunction, finding no proof of irreparable harm and noting a dispute over whether the two companies actually compete.
None of Red Cat’s allegations has been proven, and the defendants contest them.
As Pentagon demand for small drones grows, the engineers who design them have become the most contested asset in the industry.
What to watch
- Whether Red Cat refiles the dismissed claims with more detail.
- Evidence in discovery on whether Vector Defense competes for the same military customers.
