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Boeing Ordered to Pay $72 Million to Zunum Aero for Trade Secret Misappropriation

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In a significant legal ruling, a federal jury in Seattle has determined that aerospace giant Boeing must pay Zunum Aero, a former electric-aviation startup, $72 million for misappropriating trade secrets and interfering with the company’s business endeavors. This award could potentially increase if the presiding judge finds the misappropriation to be willful and malicious, which would allow for the tripling of some damages.

Representing a moment of significant validation for Zunum Aero, Scott Danner from the law firm Holwell Shuster & Goldberg, the lead counsel for Zunum, stated, “Zunum Aero’s founders and other shareholders are pleased that the company had the opportunity to prove its case, and that the jury agreed. After years of fighting, the jury’s verdict is a tremendous vindication.”

In response, Boeing expressed disagreement with the verdict. “Boeing respectfully disagrees with the jury’s verdict, which is not supported by the law or the facts,” a spokesperson for Boeing said, indicating plans to challenge the judgment.

Founded in 2013 and emerging from stealth mode in 2017, Bothell, Washington-based Zunum Aero initially received significant seed funding from entities including Boeing and JetBlue’s technology ventures fund. Despite early promises and developments, such as selecting Safran Helicopter Engines to power its 12-seat hybrid-electric aircraft, the startup faced financial difficulties, leading to scaled-back operations in 2019.

The conflict reached a legal climax when Zunum sued Boeing in 2020 in King County Superior Court, accusing it of stealing trade secrets and sabotaging its partnerships and potential investments. The case was subsequently elevated to federal court, culminating in this month’s trial.

During the proceedings, Boeing’s legal team argued that the company had supported Zunum adequately but claimed that the startup failed to meet its technological promises and deadlines. However, the jury ultimately supported Zunum’s claims, awarding $81.23 million for trade secret misappropriation and $11.56 million for interference claims, adjusted by a $20.82 million reduction for failure to mitigate damages.

Additionally, the court earlier mandated that Zunum repay Boeing $9 million plus interest in loan amounts, which will be deducted from the final damages awarded. As the case progresses to the post-trial phase, District Judge James Robart will review further motions, which could include considerations to increase the financial award under statutes related to the malicious misappropriation of trade secrets.