The suit filed in US federal court in Orlando, Florida, accuses Boeing of misappropriating secret, and highly sensitive, Lockheed documents relating to Lockheed's bid for a two-billion-dollar US Air Force rocket program during the 1990s.

According to the 28-count complaint, Boeing used the information in putting together a rival bid for the multi-year contract and then lied about it to both the Air Force and Lockheed.

The US Air Force ultimately divvied up the work between the two companies, awarding 21 of 28 military satellite launches under the Air Force's Evolved Expendable Launch Vehicle (EELV) program to Boeing and seven to Lockheed Martin.

Lockheed contends that a former Lockheed engineer, Kenneth Branch, who went to work for McDonnell Douglas Corp., a defence contractor acquired by Boeing, shared a huge amount of proprietary information with his new employers.

Boeing has turned over some 37,000 pages of material to Lockheed, much of it confidential Lockheed paperwork relating to cost estimates and technical specifications of its Atlas rockets.

"They (the documents) impaired our ability to actively compete in the space launch market which has caused us to receive fewer Air Force and commercial space launches than we would otherwise have received," said Lockheed spokesman Tom Jurkowsky.

Lockheed is seeking compensatory and punitive damages, costs, and return of all proprietary information as well as an injunction barring the Chicago-based aerospace giant Boeing from using the information to its further advantage.

The US Department of Justice and the Air Force have also launched probes relating to the alleged espionage, which came to light in 1999 after Branch and another former Boeing engineer, William Erskine, sued Boeing for wrongful termination.

That case was dismissed in 2002 by a US District Court in Orlando, Florida.

"We think that Branch provided to Boeing documents that contained cost and technical information about our family of launch vehicles (rockets)," said Jurkowsky.

Boeing said its lawyers were reviewing the suit which accuses it of violating state and federal fraud antitrust laws and RICO statutes.

"We will respond in the appropriate legal venues," said Boeing spokesman Dan Beck.

The company is co-operating with the investigations, according to a company filing with the Securities and Exchange Commission made in May.

The US Air Force inquiry could lead to Boeing being barred from certain military business, according to Air Force spokeswoman Valerie Burkes.

WAR.WIRE