Misappropriation lawsuit between eVTOL rivals signals nearing of lucrative business activity

Archer eVTOL USAF

One sure sign of a budding sector about to blossom for business is aspiring companies siccing corporate lawyers on each other. That’s exactly what’s happening now in a misappropriation lawsuit between electric vertical take-off and landing (eVTOL) rivals Archer and Wisk Aero.

Wisk loses initial injunction against electric craft foe Archer

This week, Judge William Orrick of the U.S. Court for the Northern District of California denied a preliminary injunction filed by Wisk Aero to prohibit Archer from using or disclosing any information covered in its wider misappropriation lawsuit against its rival eVTOL craft manufacturer. That litigation accuses Archer of benefitting from development materials of its Cora plane that were downloaded by a former Wisk engineer who left to work for Archer. That data, the Wisk case claims, served as the basis for Archer’s design of its Maker aircraft featuring 12 rotors, 6 of which tilt.

As such, Wisk sought the injunction to block Archer from using what it says its lawsuit will prove was illicitly obtained information essential to the Maker’s creation. Request denied.

Yet as important as Wednesday’s initial ruling on that request was, it probably won’t change the timing or shape of eVTOL transportation when craft and services hit markets later this decade. Archer says it expects to begin production of electric plans in 2024 – about the time most major advanced air mobility companies expect to rev up activity.

Big bucks at stake in misappropriation lawsuit between eVTOL rivals

What it does effect, by contrast, is a looming deal to take Archer public worth about $3.8 billion. 

That involves Archer bagging $1.1 billion in a merger with special purpose acquisition company Atlas Crest Investment Corp ahead of its Wall Street flotation. Granting Wisk’s injunction would have essentially frozen Archer’s ability to use or talk about any of the disputed design data until a ruling on the wider case was handed down – something pretty close to a death blow to its NYSE plans.

Several current Archer employees previously worked for Wisk, and the volume of information downloaded by the engineer central to the case led Orrick to concede there were “some arguable indications of misappropriation.” But Wisk’s injunction request, he noted, “has not shown a likelihood of success on the merits that defendant Archer Aviation Inc. has misappropriated its particular asserted trade secrets.” That clears Archer’s takeoff for its big Wall Street capital boost.

The wider trial, of course, could still come out in Wisk’s favor, so all potential bets in it remain on. And given the players at the table, it’ll be worth keeping an eye on the case. Wisk is backed by both Boeing and Kitty Hawk, who won’t want to see their investment undermined by losing the misappropriation lawsuit to a key eVTOL rival. Archer, meanwhile, has recently struck a major deal to supply its electric planes to United Airlines, which also took a direct equity stake in the firm.

The participants and stakes, therefore, will be as high as the courtroom drama – along with the billable hours the lawyers involved will charge.

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