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An electric aircraft startup accuses its competitor of stealing its secrets

The era of electric aircraft may still be years away, but the struggle for that market is already raging.

On Tuesday, Wisk Aero, a startup that develops an electric plane that takes off as a helicopter and then flies like a plane, filed a lawsuit against another startup, Archer Aviation, accusing it of stealing trade secrets and violating Wisk’s patents.

The lawsuit highlights before the public a dispute between two unknown companies in a field that has become a playground for billionaires. It also implicates aviation and tech giants. Whiskey is a joint venture between Boeing and Kitty Hawk, funded by Larry Page, who co-founded Google.

Among Archer’s investors is United Airlines, a major Boeing customer, and plans to purchase up to 200 aircraft from the startup.

The niche market for cars and electric aircraft has become frenzied in recent months, as the so-called blank check companies, which have little more than a listing on the stock market and an amount of cash, have snapped up startups with little or no return, not to mention that they have profits. .

Investors in blank check companies, formally known as special purpose buyouts, are hoping to acquire companies they believe can follow Tesla’s latest path in the stock market.

To attract these investors, startups like Archer are pledging to offer optimistic business plans and first-class technology.

Wisk alleges in her lawsuit that the intellectual property Archer promoted as part of its merger was stolen by engineers that the company had leased from Wisk.

The lawsuit, filed in the US District Court for the Northern District in California, accuses engineers of downloading thousands of files containing designs and classified data before Wisk leaves to join Archer. Wisk accused a third engineer of wiping the history of his activities from the computer before leaving for Archer.

The lawsuit says that “Wisk is bringing this lawsuit to stop the flagrant theft of its intellectual property and confidential information, and to protect the significant investment of resources and years of hard work and effort by its employees and their vision for the future in civil air transport.”

“It is regrettable that Wisk was involved in a lawsuit in an attempt to divert attention from the labor issues that caused many of its employees to leave,” Archer said in a statement. “The prosecutor raised these matters more than a year ago, and after careful consideration, we have no reason to believe that Wisk’s technology ownership has made its way to Archer. We are determined to defend ourselves vigorously.”

Archer also said she has placed an employee accused in the lawsuit on paid leave “in connection with a government investigation and search warrant issued against the employee, which we believe focuses on his behavior prior to joining the company.”

Archer said she and 3 employees who worked with the person involved in this investigation were called in and that they are cooperating with the authorities. As for Wisk, she described the case as a criminal investigation and said she was cooperating with the government.

Intellectual property lawsuits are not rare in promising rapidly developing industries, as Page knows all too well. In one recent case, Waymo, a company owned by Alphabet, the parent company of Google, accused one of its former employees and Uber of stealing trade secrets to gain an advantage in developing self-driving cars.

The two companies settled the case in 2018, and former Waymo employee Anthony Lewandowski, a former close to Page, was sentenced in 2020 to 18 months in prison, and former President Donald Trump pardoned him in January.

Archer announced its merger in February with Atlas Crest Investments, a special purpose acquisition company, in a deal that valued the company at $ 3.8 billion. Wisk said her suspicions were confirmed at the time when Archer released a show that featured designs similar to those in Lewis’ patent.

Wisk says her Kura plane can fly two boats for about 25 miles at a speed of about 100 miles per hour. Archer says it is developing an aircraft that can carry up to 4 people on a 60-mile flight, at speeds of up to 150 miles per hour, and the two planes are being designed to fly autonomously.

Other companies trying to build electric planes include Joby Aviation, which announced a $ 6.6 billion deal with a special purpose acquisition company led by Reed Hoffman, co-founder of LinkedIn in February, and a German startup, Lilium. It went public last month by merging with a special purpose acquisition company led by Barry Engle, a former GM executive at General Motors.

The deals are just a small slice of the special-purpose buyout business this year, as investors, celebrities and athletes race to take part in Wall Street’s new favorite. So far this year, 299 special purpose acquisitions have raised $ 97 billion, according to SPAC Research, which is more than the whole of 2020.

But regulators and some investors say more scrutiny is needed. The Securities and Exchange Commission published two notifications last month warning companies considering merging with special purpose acquisitions to ensure that they are in place with all the legal and regulatory requirements required of a IPO.

Many investors known as short sellers, who specialize in betting on lower corporate share prices, have targeted special purpose acquisitions such as Atlas Crest, one of the 20 most traded short companies.

© The New York Times Foundation 2021

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