A federal court jury in Seattle on Thursday ruled against Boeing in a lawsuit brought by failed electric airplane startup Zunum and awarded $81 million in damages — which the judge has the option to triple.
Zunum alleged that Boeing, while ostensibly investing seed money to get the startup off the ground, stole Zunum’s technology and actively undermined its attempts to build a business.
It accused Boeing of “a targeted and coordinated campaign” to gain access to its “business plan, market and technological analysis, and other trade secrets and proprietary information,” then using that to develop its own hybrid-electric plane design.
Zunum also accused Boeing of sabotaging its efforts to attract funding from aerospace suppliers Safran and United Technologies.
The jury found that Boeing had misappropriated Zunum’s trade secrets and breached its contract with the startup.
It also found that Boeing’s actions were “willful and malicious,” which opens the door for the judge to award triple damages plus legal costs in a case that has already been running for more than four years.
A federal court jury in Seattle on Thursday ruled against Boeing in a lawsuit brought by failed electric airplane startup Zunum and awarded $81 million in damages — which the judge has the option to triple.
Zunum alleged that Boeing, while ostensibly investing seed money to get the startup off the ground, stole Zunum’s technology and actively undermined its attempts to build a business.
It accused Boeing of “a targeted and coordinated campaign” to gain access to
its “business plan, market and technological analysis, and other trade secrets and proprietary information,” then using that to develop its own hybrid-electric plane design.
Zunum also accused Boeing of sabotaging its efforts to attract funding from aerospace suppliers Safran and United Technologies.
The jury found that Boeing had misappropriated Zunum’s trade secrets and breached its contract with the startup.
It also found that Boeing’s actions were “willful and malicious,” which opens the door for the judge to award triple damages plus legal costs in a case that has already been running for more than four years.
By then it had spent about $282,000 of a state grant and another $1.3 million from two investors: Boeing’s Horizon X venture-capital division and a venture-capital unit of New York-based airline JetBlue Airways.
In its response to the lawsuit, Boeing’s lawyers wrote that the story of Zunum’s demise was simply that of a typical failed startup.
“An ambitious startup’s reach exceeded its grasp, and investors fled,” Boeing’s filing states. “What preliminarily looked like an interesting investment prospect that promised a new hybrid electric or electric aircraft turned into a loss for Boeing.”
Rather than developing its own hybrid-electric design, Boeing said it developed only a “conceptual mock-up — a tool that Boeing used to evaluate the feasibility of the type of aircraft that Zunum hoped to build.”
The conclusion it drew from that mock-up was that “electric aircraft likely would not be economically viable for commercial passenger flights anytime soon.”
Boeing said other potential Zunum investors drew the same conclusion. It characterized the lawsuit as “Zunum’s latest attempt to extract more money from Boeing.”
Boeing has not publicly announced any proposal for its own version of a small hybrid-electric airplane.
The jury having sided with Zunum, Judge Robart will now decide the precise damages award and then Boeing will appeal.
The final outcome could still be some years away.
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