Electric Aircraft Start-Up Accuses Rival of Stealing Its Secrets

The age of electric aircraft may be years away, but the battle for that market is already heating up.

Wisk Aero, a start-up that develops an electric aircraft that takes off like a helicopter and flies like an airplane, sued another start-up, Archer Aviation, Tuesday, accusing it of stealing trade secrets and infringing Wisk’s patents .

The lawsuit brings a dispute between two little-known companies in a company that has become a playground for billionaires. It also involves aviation and technology giants. Wisk is a joint venture between Boeing and Kitty Hawk and is funded by Larry Page, who co-founded Google. Archer’s investors include United Airlines, a major Boeing customer that plans to purchase up to 200 aircraft from launch.

The niche market for electric vehicles and aircraft has developed rapidly in recent months, as so-called blank check companies, which have little more than a stock exchange listing and a pot of cash, have snapped up young companies with little or no income, let alone profits. Investors in blank check companies – formerly known as Special Purpose Acquisition Companies or SPACs – are hoping to acquire companies that they believe could follow Tesla’s recent price in the stock market. To attract these investors, startups like Archer promise world-class technology and optimistic business plans.

In its lawsuit, Wisk alleges that the intellectual property that Archer promoted as part of its merger was stolen by engineers the company hired from Wisk.

The lawsuit was filed in the U.S. District Court for the Northern District of California, accusing two engineers of downloading thousands of files containing confidential drafts and data before leaving Wisk to join Archer. Wisk accused a third engineer of deleting the history of his activities from his computer before going to Archer.

“Wisk is bringing this lawsuit to stop a brazen theft of its intellectual property and confidential information, and to protect its employees’ significant investment in resources and years of hard work and efforts, and their vision of the future in urban aviation,” the lawsuit said.

Archer denied wrongdoing.

“It is unfortunate that Wisk is involved in a lawsuit to diverge from the business problems that resulted in several of its employees departing,” Archer said in a statement. “The plaintiff raised these issues over a year ago, and after thoroughly investigating them, we have no reason to believe that any proprietary Wisk technology ever made its way to Archer. We want to defend ourselves vigorously. “

Archer also said he put an employee charged in the lawsuit on paid vacation “in connection with a government investigation and a search warrant issued to the employee which we believe related to behavior prior to the employee’s entry into the company Company focused. ” Archer said so, and three employees who worked with the person had been summoned on that investigation and were working with authorities.

Intellectual property lawsuits are not uncommon in rapidly evolving and promising industries – as Mr Page well knows. In a recent case, Waymo, a company owned by Google’s parent company Alphabet, accused one of its former employees and Uber of stealing trade secrets to gain an advantage in the race to develop autonomous cars. The companies settled the case in 2018, and former Waymo employee Anthony Levandowski, a former confidante of Mr. Page, was sentenced to 18 months in prison in 2020. Former President Donald J. Trump pardoned Mr. Levandowski in January.

Archer announced its merger with a SPAC, Atlas Crest Investment, in February. The company was valued at $ 3.8 billion. Wisk said his suspicions were confirmed at this point when Archer posted a presentation that included designs that resembled those of a Wisk patent application.

Wisk says his Cora plane can fly a pair of passengers about 25 miles at a speed of about 100 miles per hour. Archer says it is developing an aircraft that can carry up to four people on a 60-mile journey and has a top speed of 150 mph. Both aircraft are designed to fly autonomously.

It’s unclear whether Wisk raised concerns in Atlas’ review of Archer before the two reached an agreement. The SPAC is backed by a subsidiary of investment bank Moelis & Company, which relied on its bankers and others to help Vet Archer, the bank’s founder, Ken Moelis, told the New York Times in an interview when she announced the transaction announced.

“We had 35, 40 people with us – and we attacked this like growth companies or anyone else would,” said Moelis. “And we did it quickly too.”

A spokeswoman for Moelis declined to comment.

Other companies trying to make electric aircraft include Joby Aviation, which announced a $ 6.6 billion deal in February with a SPAC led by LinkedIn co-founder Reid Hoffman, and German startup Lilium, which Goed public last month through its merger with a SPAC led by a former General Motors CEO, Barry Engle.

These deals are only a small part of SPAC’s activity this year as investors, celebrities and athletes have participated in Wall Street’s new favorite toy. According to SPAC Research, 299 SPACs have raised $ 97 billion so far this year – more than in all of 2020.

However, regulators and some investors say more scrutiny is needed. The Securities and Exchange Commission issued two notices last month warning companies to partner with SPACs to ensure they are ready for any legal and regulatory requirements that a public company brings with it. Many investors known as short sellers who specialize in ensuring that company stock prices will fall have targeted SPACs like Atlas Crest, which is among the top 20 least-trimmed SPACs.

The electric aircraft market is still in its infancy, but it is promising. The prospect of “jetsons” -like aircraft has moved closer to reality in recent years thanks to advances in battery and aircraft design. A high-stakes race to build the first functional electric aircraft is underway, and some airlines are betting that such vehicles can help them achieve their goals of eliminating or offsetting their greenhouse gas emissions.

United’s chief executive Scott Kirby said the Archer planes are unlikely to be used for commercial flights but are ideal for short trips to and from the airport.

“Not only are they more environmentally friendly, they’re also a lot quieter than a helicopter,” Kirby said Tuesday during a Council on Foreign Relations event. “And because they have 12 rotors, I believe they will ultimately be safer.”

However, widespread use of electric air taxis is likely years away. Such aircraft may never become more than a luxury used by the very wealthy as companies and governments may find far cheaper ways to transport people with zero emissions.

Comments are closed.