A U.S. appeals court in San Francisco has reinstated an $81 million judgment against Boeing in a case alleging the company stole trade secrets from the electric aircraft startup Zunum Aero. The ruling from the 9th U.S. Circuit Court of Appeals overturned a previous decision by a California judge, who had dismissed a jury’s finding in favor of Zunum.
The appeals court rejected the lower court’s conclusion that the proprietary information claimed to be misappropriated by Boeing did not qualify for trade secret protection. Zunum’s attorney, Vincent Levy, expressed satisfaction with the appeals court’s ruling, emphasizing that it validates the company’s claim that Boeing obstructed Zunum’s innovative potential in the aviation industry.
Founded in 2013, Zunum Aero is based in Washington State and aimed to develop small electric commuter aircraft capable of flying up to 1,500 miles. In 2017, Boeing’s venture capital wing invested $5 million in the startup.
Zunum filed its lawsuit in 2020, asserting that it intended to market its aircraft in 2022 but was forced to cease development due to Boeing allegedly hindering its access to funding. The company contended that Boeing subsequently utilized Zunum’s trade secrets to develop its hybrid commuter aircraft.
In May 2022, a federal jury awarded Zunum approximately $81.2 million for trade secret theft and an additional $11.6 million for tortious interference. However, the jury later adjusted the total to $72 million, citing damages Zunum could have minimized. U.S. District Judge James Robart later confirmed the final award at $81 million, only to rescind the verdict last August, contending that Zunum failed to sufficiently define its secrets and establish their value stemming from confidentiality.
The 9th Circuit’s ruling highlighted that Zunum had sufficiently detailed its trade secrets for the jury to determine these assets were eligible for legal protection, noting they were not widely known or easily accessible and held significant value.
Moreover, the court mandated the reassignment of the case to a new judge after it was disclosed that Robart’s wife had purchased Boeing stock through a retirement account during the proceedings. The case is identified as Zunum Aero Inc v. Boeing Co, No. 24-5212 in the 9th U.S. Circuit Court of Appeals.
Representing Zunum are Vincent Levy from Holwell Shuster & Goldberg, while Boeing’s defense is led by Moez Kaba of Hueston Hennigan.
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