Boeing’s $81M Trade Secrets Verdict: Overturned, Then Reinstated in Appeal
Fourteen months ago, a jury in Seattle ruled against Boeing, awarding $81 million in damages to Zunum, a failed electric airplane startup that alleged the company had stolen its technology and undermined its business operations. The case, initially reported by the Seattle Times, centered on Zunum’s claims that Boeing, although investing seed funding to support the startup, had engaged in intellectual property theft and actively interfered with Zunum’s ability to develop a viable business model.
However, just two months after the ruling, U.S. District Judge James Robart overturned the verdict, stating that Zunum had not provided sufficient evidence to establish its trade secrets or demonstrate that those secrets derived value from being kept confidential. The judge’s decision emphasized that the startup had failed to meet the legal standard for trade secret protection, which requires clear identification of the proprietary information.
Three days later, the case took an unexpected turn when a U.S. appeals court overturned Robart’s decision and reinstated the original $81 million award. The appellate ruling rejected the district judge’s conclusion that Zunum had not properly defined its trade secrets, highlighting that Zunum’s witnesses had provided detailed descriptions of the allegedly stolen information, and that Boeing’s internal communications suggested the company had used Zunum’s confidential data to modify its own in-house designs and strategies.
The appeals court also noted that under the investment agreement, Boeing was not permitted to use Zunum’s confidential information for any purpose other than managing its investment. The court’s decision underscored that the district court had erred in its interpretation of the evidence, and that Zunum had fulfilled its burden of proving that the information constituted trade secrets.
Following the appeals court’s ruling, the case has been reassigned to a new judge, as the original judge had previously revealed that his wife had acquired Boeing stock through a retirement savings account during the litigation. This disclosure had raised concerns about potential bias, prompting the appellate court to question the judge’s impartiality and reassign the case to ensure a fair trial.
Boeing, which declined to comment on the appeals court’s decision, now faces the prospect of a retrial in which the original verdict may be reinstated. This case highlights the complexities of trade secret litigation and the importance of proper evidence presentation in intellectual property disputes. As the legal battle continues, both parties will have to navigate the challenges of proving their claims in a highly technical and legally nuanced area of law.