- Archer placed employee on leave, citing a government probe
Wisk Aero LLC, a maker of electric-powered aircraft designed for use as flying taxis, claims its technology was stolen by Archer Aviation Inc., a rival startup valued at $3.8 billion in a blank-check deal earlier this year involving United Airlines Holdings Inc. and investment banker Ken Moelis.
Wisk, a joint venture of Boeing Co. and Google co-founder Larry Page’s Kitty Hawk Corp., said former employees downloaded thousands of files and secret designs before taking jobs at Archer, according to a complaint filed Tuesday in federal court in San Jose, California. The companies compete in the market for so-called electric vertical takeoff and landing aircraft, or eVTOLs.
Palo Alto, California-based Archer, which had “no meaningful operations as of January 2020,” announced about a year later that it would have an eVTOL aircraft ready within months, after hiring at least 20 Wisk employees, Wisk said. The reason for Archer’s rapid development became “more self-evident as it began revealing designs of its aircraft,” including a rendering that resembled one from Wisk’s confidential patent application in January 2020, the suit alleged.
An Archer spokesperson said in an email that it has “placed an employee on paid administrative leave in connection with a government investigation and a search warrant issued to the employee, which we believe are focused on conduct prior to the employee joining the company.” The spokesperson declined to specify the nature of the probe. Archer and three other employees have received related subpoenas, and “all are fully cooperating with the authorities,” the spokesperson said.
Developing aircraft for city use is being driven by urbanization and the need for innovative mobility options. An October 2020 report by BloombergNEF on the market for electric aviation said about 5,000 eVTOLs would be needed to move about 100,000 passengers in the U.S. alone, where some city commutes could be replaced by flying taxis. Uber Technologies Inc. plans to offer aerial ridesharing services by 2023. BloombergNEF was tracking 186 companies developing eVTOLs globally.
Archer’s valuation soared from $16 million in April 2020 to $3.8 billion through a merger announced in February with a special purpose acquisition company, or SPAC, orchestrated by Moelis, who has started raising money for three other SPACs. A spokesperson for Moelis didn’t immediately respond to a request for comment on the Wisk suit.
According to the complaint, the stolen Wisk files fit at least five categories of trade secrets: aircraft designs, component designs, system designs, facility inventory and test data.
Wisk said it learned of “suspicious activity” after hiring a third party to conduct a forensic investigation of computer hard drives used by the former employees, a routine practice for protecting its intellectual property. According to the complaint, the investigation showed USB thumb drives were used to download thousands of files, including more than 3,400 by an engineer on Christmas Day in 2019.
Archer also was accused by Wisk of infringing four patents related to aircraft design for better stability and control, thermal management of rotor control assemblies and fast-charging batteries. Wisk has almost 80 U.S. patents in all, with more applications pending, and said in the complaint that its intellectual property “is core to its business.”
In a statement, Archer said the lawsuit was an attempt by Wisk “to deflect from the business issues that have caused several of its employees to depart.” Archer said Wisk made the allegations more than a year ago, and “after looking into them thoroughly, we have no reason to believe any proprietary Wisk technology ever made its way to Archer.”
Wisk said its vice president of hardware engineering, Thomas Muniz, left the company in December 2019 to join Archer, where he’s been featured prominently in investment materials. Muniz then helped recruit more Wisk employees to join Archer, Wisk said.
According to the lawsuit, Archer co-founders Brett Adcock and Adam Goldstein have hired at least 20 former Wisk employees — including 10 engineers in one week in January 2020. One recruit was Scott Furman, Archer’s “chief avionics architect,” who had spent years in the same role at Wisk and Kitty Hawk and is an inventor in two of the patents at issue, the suit says.
Source: Bloomberg – Flying-Taxi SPAC Accused of Stealing Aircraft Technology