A federal jury in Seattle says Boeing owes an unsuccessful electric-aviation startup called Zunum Aero $72 million for misappropriating trade secrets and interfering with its business plans.
Some of that amount could be tripled if the judge determines that the misappropriation was willful and malicious.
“Zunum Aero’s founders and other shareholders are pleased that the company had the opportunity to prove its case, and that the jury agreed,” Scott Danner of the law firm Holwell Shuster & Goldberg, lead counsel for Zunum, said in a statement. “After years of fighting, the jury’s verdict is a tremendous vindication.”
Boeing said it would challenge the judgment. “Boeing respectfully disagrees with the jury’s verdict, which is not supported by the law or the facts,” the company said.
Bothell, Wash.-based Zunum Aero, which was founded in 2013, came out of stealth in 2017 and received millions of dollars in seed funding from Boeing and from JetBlue’s technology ventures fund. The company also won an $800,000 grant from the Washington State Department of Commerce’s Clean Energy Fund.
At the time, Zunum said it expected to put the first planes in a line of regional hybrid-electric and all-electric aircraft into service in the 2020s. In 2018, it selected Safran Helicopter Engines to provide the engine turbine for its 12-seat hybrid-electric aircraft. But less than a year later, the startup had to cut back on operations due to a cash shortage.
In 2020, Zunum filed suit in King County Superior Court, alleging that Boeing stole the startup’s trade secrets and interfered with its efforts to work with Safran and bring in additional investment. That lawsuit was moved to federal court and went to trial this month.
During the trial, Boeing’s attorneys argued that the aerospace giant did its best to support Zunum, but that the startup missed deadlines and couldn’t match the claims it made for its technology. Boeing said it used Zunum’s technical information only for permissible purposes, such as to manage its investment.
On Thursday, the nine-member jury sided with Zunum on 11 claims relating to the misappropriation of trade secrets, and also determined that Boeing wrongfully interfered with Zunum’s business relationships. Jurors awarded $81.23 million relating to the misappropriation claims and $11.56 million relating to interference claims. But they said Zunum failed to mitigate $20.82 million in damages from the misappropriations, reducing the net award to $71.97 million.
Before the trial, District Judge James Robart issued a summary judgment requiring Zunum to repay $9 million in loans provided by Boeing, plus interest. That amount would be taken out of damages awarded to Zunum.
Now that the jury has rendered its verdict, Robart will consider post-trial motions challenging the award — and decide whether a portion of the award should be tripled under legal provisions relating to willful and malicious misappropriation of trade secrets.
