A jury in federal court on Thursday awarded failed electric aviation startup Zunum Aero, which was headquartered in Redmond, $72 million after it agreed that Boeing Co. (NYSE: BA) misappropriated Zunum's trade secrets and interfered with its business.
Zunum, which was founded in 2013, first filed its complaint in King County in 2020 before the case was moved to the U.S. District Court for the Western District of Washington in 2021. The case centered on whether Boeing, as an investor in Zunum, had taken proprietary Zumum trade secrets to sabotage Zunum's search for more investors and partnerships.
“Boeing respectfully disagrees with the jury’s verdict, which is not supported by the law or the facts. Boeing will pursue all available challenges to the judgment," Boeing said in a statement to the Business Journal.
Zunum alleged Boeing saw the startup as a competitor and had felt Zunum's electric aviation technology was decades away from reality before investing in Zunum and seeing the startup's trade secrets. Upon realizing Zunum's potential, according to the lawsuit, Boeing violated nondisclosure agreements and went behind Zunum's back to position Boeing as the market leader in this electric aviation technology.
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Boeing's actions, according to Zunum's complaint, prevented the startup from landing further capital.
"In contrast to the widely-accepted industry outlook that hybrid-electric or all-electric aircraft were decades away from commercial viability and Boeing’s own lacking technology capabilities, Boeing saw Zunum as an innovative venture, with a dramatically accelerated path to the future enabled by its proprietary technologies and plans, and Boeing presented itself as interested in investing and partnering with Zunum," the complaint read. "Instead, Boeing stole Zunum’s technology and disclosed it to Boeing’s partners to accelerate Boeing’s own roadmaps by two decades, while intentionally hobbling Zunum."
Zunum was focused on commercial hybrid and electric aircraft for ranges up to 1,500 miles. JetBlue's venture arm had also backed Zunum, and the company in 2018 signed a deal with French aerospace giant Safran to make engine turbines for Zunum's aircraft. The startup was planning to make regional, single-aisle and vertical-lift aircraft, among others, and it wanted to make regional airports more viable travel destinations. It went out of business in 2019 when it ran out of cash.
The jury awarded Zunum $81.23 million for the alleged trade secret misappropriation plus $11.56 million for interfering with Zunum's business. The jury also concluded Zunum failed to mitigate its damages, subtracting the total by $20.82 million, bringing the total to $71.97 million. At least a portion of the award could be tripled, Reuters reported.
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