I don't know if the keyboard turns off or the app does but here is when it happens

IPad version 3.2.1

I use backrounder set like this - Add both Mouse and Keyboard to the exception list in Backgrounder - for the mouse, choose native, turn 'enable at launch' OFF (!), 'Stay enabled' ON - for Keyboard, choose native, turn 'enable at launch' ON (!), 'Stay enabled' ON

Ok, connect the keyboard first then the mouse. You can use the mouse but not the keyboard...eventually the keyboard stops responding and the app is in an off state, meaning doesn't show up as "on" on the icon, also Circuitous does not have the keyboard app listed. When you go to reconnect sometimes you have to reset the iPad in order to get it to connect.

Observation: when this happens, the keyboard does show up but with a Bluetooth icon, not the expected black icon with a mac address.

I am using the Microsoft Bluetooth mouse and the Menotek flexible keyboard. I am getting rid of this keyboard anyway so if there is a change in my new keyboard I will list it here.

Got the Apple keyboard and it works much better but mouse still disconnects and you have to re spring to get the mouse and keyboard to work