US court reinstates $81 million award against Boeing in trade secrets case

By Blake Brittain

Aug 14 (Reuters) - A U.S. appeals court on Thursday reinstated an $81 million award against Boeing BA.N in a lawsuit accusing it of stealing trade secrets from electric-aircraft startup Zunum Aero.

The 9th U.S. Circuit Court of Appeals overturned a California judge's decision to throw out a jury verdict for Zunum, rejecting his finding that the information Boeing allegedly stole was not entitled to trade-secret protection.

A spokesperson for Boeing declined to comment on the appeals court's decision. Spokespeople for Zunum did not immediately respond to a request for comment.

Washington State-based Zunum was founded in 2013 to develop small electric commuter aircraft that can travel up to 1,500 miles. Boeing's venture capital arm invested $5 million in the startup in 2017.

Zunum said in a 2020 lawsuit that it planned to begin selling its planes in 2022 but halted development after Boeing allegedly blocked its access to capital. The complaint said that Boeing developed its hybrid commuter aircraft using Zunum's trade secrets.

A federal jury last May awarded Zunum nearly $81.2 million from Boeing for trade secret theft and $11.6 million for tortious interference, but reduced the total award to $72 million based on damages that it said Zunum could have mitigated.

U.S. District Judge James Robart later set the final award at $81 million, but overturned the verdict last August after determining that Zunum did not adequately identify its secrets or show that they derived their value from being kept secret.

The 9th Circuit said on Thursday, however, that Zunum had provided "sufficient specificity" for the jury to find that its secrets were legally protectable as well as "not generally known, not readily ascertainable, and valuable."

The appeals court also ordered the case to be assigned to a new judge after Robart revealed that his wife had acquired Boeing stock through a retirement savings account during the litigation.

The case is Zunum Aero Inc v. Boeing Co, 9th U.S. Circuit Court of Appeals, No. 24-5212.

For Zunum: Vincent Levy of Holwell Shuster & Goldberg

For Boeing: Moez Kaba of Hueston Hennigan

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