The launch of an electric aircraft accuses its rival of stealing its secrets

The era of electric aircraft may be years away, but the fight for that market is already heating up.

Wisk Aero, a startup that develops an electric plane that takes off like a helicopter and flies like a plane, sued another startup, Archer Aviation, on Tuesday, accusing it of stealing trade secrets and infringing on Wisk’s patents.

The lawsuit brings to light a dispute between two little-known companies in a business that has become a playground for billionaires. It also entangles aviation and tech giants. Wisk is a joint venture of Boeing and Kitty Hawk, funded by Larry Page, co-founder of Google. Archer’s investors include United Airlines, which is a major Boeing customer and plans to buy up to 200 aircraft from inception.

The electric vehicle and aircraft niche market has become hectic in recent months as so-called blank check companies, which have little more than a public listing and a lot of cash, have taken over businesses. fledgling with little or no income, much less. Benefits. Investors in blank check firms, formally known as Special Purpose Acquisition Companies, or SPACs, hope to acquire businesses that they believe could follow Tesla’s recent trajectory in the stock market. To attract those investors, startups like Archer promise top-notch technology and optimistic business plans.

In its lawsuit, Wisk contends that the intellectual property Archer promoted as part of its merger was stolen by engineers the company hired from Wisk.

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

“Wisk files this lawsuit to stop a blatant theft of its intellectual property and confidential information and to protect the substantial investment of resources and years of hard work and effort of its employees and their vision of the future in urban air transportation,” the lawsuit says.

Archer denied any wrongdoing.

“It is regrettable that Wisk is involved in litigation in an attempt to deflect business problems that have led to the departure of several of its employees,” Archer said in a statement. “The plaintiff raised these issues more than a year ago, and after thoroughly analyzing them, we have no reason to believe that any proprietary technology from Wisk has reached Archer. We intend to vigorously defend ourselves. “

Archer also said it had placed an accused employee in the lawsuit on paid leave “in connection with a government investigation and a search warrant issued to the employee, which we believe focuses on the conduct before the employee joins the job. business”. Archer said so and three employees who had worked with the individual had been subpoenaed in that investigation and were cooperating with authorities.

Intellectual property lawsuits are not uncommon in fast-growing and promising industries, as Mr. Page well knows. In a recent case, Waymo, a company owned by Google’s parent Alphabet, accused one of its former employees and Uber of stealing trade secrets to gain a head start in the race to develop autonomous cars. The companies settled the case in 2018, and former Waymo employee Anthony Levandowski, a former Page confidant, was sentenced in 2020 to 18 months in prison. Former President Donald J. Trump pardoned Levandowski in January.

Archer announced its merger in February with a SPAC, Atlas Crest Investment, in a deal that valued the company at $ 3.8 billion. Wisk said his suspicions were confirmed at the time when Archer released a submission containing designs similar to those in a Wisk patent application.

Wisk says his Cora plane can carry a couple of passengers about 25 miles at a speed of about 100 miles per hour. Archer says he is developing a plane that can carry up to four people on a 60-mile trip, topping 150 mph. Both aircraft are designed to fly autonomously.

It’s unclear if Wisk’s concerns were raised in Archer’s Atlas assessment before the two reached an agreement. The SPAC is backed by an affiliate of investment bank Moelis & Company, which relied on its bankers and others to help investigate Archer, the bank’s founder, Ken Moelis, told The New York Times in an interview announcing the transaction.

“We had 35, 40 people on this, and we attack this like business growth or anyone else would,” Moelis said. “And we did it fast too.”

A spokeswoman for Moelis declined to comment.

Other companies trying to make electric jets include Joby Aviation, which announced a $ 6.6 billion deal with a SPAC led by LinkedIn co-founder Reid Hoffman in February, and German company Lilium, which went public last month upon merging. with a SPAC. led by a former General Motors executive, Barry Engle.

Those deals are just a small part of SPAC’s activity this year, as investors, celebrities and athletes have raced to participate in Wall Street’s new favorite toy. So far this year, 299 SPACs have raised $ 97 billion, according to SPAC Research, more than in all of 2020.

But regulators and some investors say more scrutiny is needed. The Securities and Exchange Commission issued two notices last month warning companies that are considering merging with the SPACs to ensure they are prepared for all the legal and regulatory requirements that come with being a public company. Many investors known as short sellers, who specialize in betting that company stock prices are destined to fall, have focused on SPACs like Atlas Crest, which is in the top 20 shortest SPACs.

The electric aircraft market is in its infancy, but it is very promising. The prospect of “Jetsons” -like flying vehicles has come a little closer to reality in recent years thanks to advances in battery and aircraft design. A high-stakes race to build the first viable electric aircraft is underway, and some airlines are betting that these vehicles can help them meet their goals of eliminating or offsetting their greenhouse gas emissions.

Scott Kirby, United’s chief executive, said the Archer plane was unlikely to be used for commercial flights, but was ideal for short trips to and from an airport.

“Not only are they more environmentally friendly, they are much quieter than a helicopter,” Kirby said Tuesday during an event organized by the Council on Foreign Relations. “And because they have 12 rotors, I think they will ultimately be safer.”

Still, the widespread use of electric air taxis is likely years away. These planes may never become more than a luxury used by very wealthy people because companies and governments can find much cheaper ways to transport people without emissions.

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