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Boeing hit with $72 mln verdict in EV aircraft trade secrets case

Post Time:2024-06-03 Source:Reuters Author: Blake Brittain and Sara Merken Views:

May 31 (Reuters) - Electric aircraft startup Zunum Aero convinced a federal jury in Seattle on Thursday that Boeing (BA.N) owes $72 million for stealing its trade secrets to power competing hybrid-electric planes.

Jurors agreed with Zunum that Boeing copied Zunum's technology and drove it out of the emerging short-haul electric aircraft market after investing in the company.

The jury awarded Zunum about $81.2 million total on the trade secrets misappropriation claims and an additional $11.6 for tortious interference. The jury also found that Zunum failed to mitigate about $20.8 million in damages, however, reducing the total award to about $72 million.

At least part of the award could be tripled under trade secrets law.

"Boeing respectfully disagrees with the jury's verdict, which is not supported by the law or the facts," the company said in a statement. Boeing said it plans to challenge the judgment.

A federal judge earlier this month sided with Boeing on its counterclaims that Zunum breached a contract by failing to repay Boeing $9 million in loans plus interest.

Scott Danner of Holwell Shuster & Goldberg, lead counsel for Zunum, said they are pleased with the jury verdict.

Seattle area startup Zunum was founded in 2013 to make small electric commuter aircraft that can travel up to 1,500 miles. Boeing's venture capital arm invested $5 million in Zunum in 2017.

Zunum said in its 2020 lawsuit that it planned to begin selling its aircraft in 2022 until it was "forced to halt its development program due to Boeing-caused capital starvation."

The complaint said that Boeing developed its own hybrid commuter aircraft with Zunum's "specifications, insights, innovations, technology, and trade secrets" while stringing the startup along for continued funding.

Zunum's lawsuit said that Boeing used its secrets to enable Boeing's partner Safran S.A. (SAF.PA) to "accelerate its development of hybrid electric aircraft by nearly two decades" and "displace Zunum from the very market that Zunum had innovated."

Boeing denied the allegations.

"Far from the dramatic tale Zunum spins in its complaint, Zunum's story is a simple one: an ambitious startup's reach exceeded its grasp, and investors fled," Boeing said in a court filing.

The case is Zunum Aero Inc v. Boeing Co, U.S. District Court for the Western District of Washington, No. 2:21-cv-00896.