A US federal judge has reversed a jury's decision that had awarded dormant electric aviation startup Zunum Aero USD72 million in a trade secrets infringement case against Boeing, according to court filings.

Zunum Aero had alleged Boeing used its intellectual property to advance its own hybrid-electric aircraft project while depriving Zunum of funding.

However, on August 14, Judge James L. Robart of the US District Court Western District of Washington in Seattle said he could find no evidence that Boeing had misused trade secrets.

Zunum Aero, which halted operations in 2019, had approached Boeing for funding in August 2016. The companies entered into a proprietary information agreement (PIA) where Boeing agreed to keep Zunum's confidential information secure in exchange for access to proprietary documents. Boeing was impressed with Zunum's proposals and subsequently provided the startup with two loans totalling USD9 million: USD5 million in March 2017 and USD4 million in May 2018. Both loans were accompanied by investment rights letters that allowed Boeing to review additional proprietary information from Zunum to assess its technical claims.

Zunum sought partnerships with other major aerospace companies, including United Technologies Aerospace Systems (UTAS) and Safran S.A., but neither invested. Unable to secure further funding and with Boeing unwilling to provide additional investment, Zunum faced financial difficulties. By October 2018, the company was forced to furlough employees and halt operations. According to court documents, it persisted "functionally as a non-operating entity".

Its founders sued Boeing in King County Superior Court, accusing it of being responsible for the company's failure. Boeing counter-filed, contending that it supported Zunum's success but alleged mismanagement and unrealistic business plans as key issues. The OEM claimed that Zunum's founders rejected necessary help and insisted on an inflated valuation of over USD100 million, despite opposition from Boeing and other potential investors.

The case eventually went to trial in May 2024 in Seattle, but by then, the original 12-count scope of the trial had been reduced to three charges:

  • Trade secret misappropriation: Allegations that Boeing improperly used Zunum's confidential information;
  • Breach of agreements: Violations of the 2016 Proprietary Information Agreement (PIA) and the 2017 Investment Rights Letter (IRL); and
  • Interference: Claims that Boeing disrupted Zunum's potential business dealings with United Technologies Aerospace Systems (UTAS) and Safran.

The jury returned a mixed verdict, finding for Zunum on some claims and Boeing on others, in what Judge Robart nevertheless called an "electrifying win" for Zunum. It awarded Zunum USD67.08 million for trade secret misappropriation and breach of contract; USD14.15 million for unjust enrichment due to the trade secret misappropriation; and USD11.56 million for "tortious" interference. Still, it also found that Boeing did not breach the 2016 PIA or interfere with Zunum's dealings with UTAS, and that Zunum failed to mitigate USD20.82 million in damages.

However, following a subsequent motion by Boeing for a judgement of law, Judge Robart dismissed all of Zunum's claims, ruling it failed to prove Boeing misused its intellectual property for the Electra aero joint venture. The judge found Zunum's evidence too speculative, out of context, and insufficient to show that Boeing breached the 2017 IRL or caused harm to Zunum.

Consequently, the court granted Boeing's motion for judgment as a matter of law, ruling in Boeing's favour on all claims. Zunum's motion for post-trial relief was denied as moot, and the court vacated its previous judgment to enter a new judgment in favour of Boeing.