The era of electric aircraft may be many years away, but the battle for that market has heated up.
Wisk Aero, a startup developing an electric plane that can take off like a helicopter and fly like an airplane, on Tuesday sued another startup, Archer Aviation, on charges of stealing secrets. commercial confidentiality and patent infringement of Wisk.
The lawsuit has made public opinion interested in a dispute between two little-known companies in a business area that has become a playground for billionaires. It also entails giants in aerospace and technology. Wisk is a joint venture of Boeing and Kitty Hawk, sponsored by Larry Page, the co-founder of Google. Archer’s investors include United Airlines, a major Boeing customer and plans to buy up to 200 planes from its inception.
The electric and jet niche market has gone wild in recent months as so-called vacant check firms, with just less than one stock market listing and a chunk of cash, have drawn in cash. fledgling businesses with little or no revenue, let alone profits. Investors in drum check firms – formally known as special purpose acquisitions companies, or SPAC – are hoping to buy back businesses they believe could follow the recent trajectory of Tesla on the stock market. To entice those investors in, startups like Archer promise cutting edge technology and upbeat business plans.
In its lawsuit, Wisk claimed that the intellectual property that Archer promoted during the merger was stolen by the engineers it hired from Wisk.
Filed in California’s Northern District Court, the US, the lawsuit alleges two engineers downloaded thousands of files containing confidential designs and data before leaving Wisk to join Archer. Wisk accused a third engineer of wiping the history of his operations from his computer before leaving Archer.
“Wisk filed this lawsuit to prevent blatant theft of its intellectual property and confidential information, while protecting our significant investment resources and years of hard work and hard work. employees as well as their vision for the future in urban air transport, ”the lawsuit said.
Archer denied wrongdoing.
“It is a pity that Wisk is again participating in lawsuits in an attempt to deflect some of the company’s employees from leaving,” Archer said in a statement. know. “Plaintiffs raised these issues more than a year ago, and after careful consideration, we have no reason to believe that any proprietary Wisk technology ever came to Archer. We intend to defend strongly ”.
Archer also said they have brought an alleged employee in the paid leave lawsuit “in connection with a government investigation and a search warrant issued to the employee, which we believe they focus on. en before the employee joined the company. ” Archer said they and three employees who worked with the individual were subpoenaed in that investigation and are cooperating with authorities.
Intellectual property lawsuits are not uncommon in promising industries – as Mr. Page knows 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 the race. self-driving car development. The companies settled the case in 2018, and former Waymo employee Anthony Levandowski, a close Mr. Page confidant, was sentenced to 18 months in prison in 2020. Former President Donald J. Trump pardoned to Mr. Levandowski in January.
Archer announced a merger in February with SPAC, Atlas Crest Investment, in a deal that valued the company at $ 3.8 billion. Wisk said their suspicions were confirmed at the time when Archer released a presentation with a design similar to that in Wisk’s patent filing.
Wisk says its Cora can fly a pair of passengers for about 25 miles at a speed of about 100 miles per hour. Archer says they are developing a plane that can carry up to four people on a 60-mile trip, reaching speeds of 150 miles per hour. Both aircraft are designed for autonomous flight.
It’s not clear if Wisk’s concern appeared in Atlas’s assessment of Archer before the two reached an agreement. SPAC, backed by an affiliate of investment bank Moelis & Company, relies on its bankers and others to help veterinarian Archer, the bank’s founder, Ken Moelis, told The New York Times in an interview when announcing the transaction.
“We have 35 or 40 people doing this – and we attack this like risky growth or anyone else,” Moelis said. “And we did it quickly, too.”
A Moelis spokesperson declined to comment.
Other companies trying to make electric jets include Joby Aviation, which announced a $ 6.6 billion deal with SPAC led by LinkedIn co-founder Reid Hoffman in February, and the startup company. Company Lilium, launched last month by merging with SPAC. is led by a former General Motors executive, Barry Engle.
Those deals are only a small part of SPAC activity this year, as investors, celebrities and athletes are all racing to take part in Wall Street’s new favorite toy. So far this year, 299 SPAC has raised $ 97 billion, according to SPAC Research – more than in 2020.
However, regulators and some investors think that more careful consideration is needed. The Securities and Exchange Commission released two announcements last month warning companies that are considering merging with the SPAC to ensure that they are ready for all the legal and regulatory requirements. required by the public. Many so-called short sellers, who bet that the stock prices of certain companies fall, have targeted SPACs such as Atlas Crest, one of the 20 SPACs being shorted the most.
The electric jet market is in its infancy, but with great promise. The prospect of flying vehicles like the “Jetsons” has come closer to reality in recent years thanks to advances in the design of batteries and aircraft. A race to build the first viable electric aircraft is underway and some airlines are betting that such vehicles could help them achieve their goal of eliminating or offset emissions. greenhouse effect.
Scott Kirby, United’s chief executive, said the Archer plane is difficult to be used for commercial flights but is ideal for short trips to and from an airport.
Mr. Kirby said on Tuesday during an event organized by the Council on Foreign Relations: “They are not only more environmentally friendly, but also much quieter than helicopters. “And, because they have 12 propellers, I believe they will eventually be safer.”
However, the widespread use of air taxis is likely to be many years away. Such planes may never be the luxury used by the very rich because businesses and governments can come up with much cheaper ways to transport people without emissions.