The era of electric planes may still take years, but the fight for this market is already heating up.
Wisk Aero, a start-up that develops an electric aircraft that takes off like a helicopter and flies like an airplane, on Tuesday sued another start-up, Archer Aviation, accusing it of stealing trade secrets and infringing Wisk patents. .
The lawsuit brings to light a dispute between two little-known companies in a business that has become a playground for billionaires. It also involves aviation and technology giants. Wisk is a joint venture of Boeing and Kitty Hawk, which is funded by Larry Page, co-founder of Google. Archer’s investors include United Airlines, which is a major customer of Boeing and plans to buy up to 200 aircraft from the start.
The niche market for electric vehicles and airplanes has become frantic in recent months, as so-called blank check companies, which have little more than a stock exchange listing and a lot of money, have snapped up fledgling companies with little or no revenue. , the more profits. Investors in blank check firms – formally known as special-purpose acquisition companies, or SPACs – hope to acquire businesses that they believe can follow Tesla’s recent trajectory in the stock market. To attract these investors, start-ups like Archer promise cutting-edge technology and optimistic business plans.
In its lawsuit, Wisk claims that the intellectual property that Archer promoted as part of its merger was stolen by engineers the company hired from Wisk.
Filed in the United States District Court for the Northern District of California, the lawsuit accuses two engineers of downloading thousands of files containing confidential projects and data before leaving Wisk to join Archer. Wisk accused a third engineer of cleaning up the history of his activities from his computer before leaving for Archer.
“Wisk opens this process to prevent blatant theft of its intellectual property and confidential information and to protect the substantial investment of resources and years of hard work and effort by its employees and their vision of the future in urban air transport,” says the process.
Archer denied any wrongdoing.
“It is unfortunate that Wisk went into litigation in an attempt to deviate from the business issues that caused several of its employees to leave,” Archer said in a statement. “The plaintiff raised these questions more than a year ago, and after examining them thoroughly, we have no reason to believe that any proprietary technology from Wisk has reached Archer. We intend to defend ourselves vigorously ”.
Archer also said it placed an accused employee in the process on paid leave “in connection with a government investigation and a search and seizure warrant issued to the employee, which we believe focuses on conduct prior to the employee joining the company.” Archer said this and three officials who worked with the individual have been summoned in this investigation and are cooperating with the authorities.
Intellectual property lawsuits are not uncommon in promising and rapidly developing sectors – as Mr. Page is well aware. In a recent case, Waymo, a company owned by Alphabet, Google’s parent company, accused one of its former employees and Uber of stealing trade secrets to gain an edge in the race to develop self-driving cars. The companies solved the case in 2018, and former Waymo employee Anthony Levandowski, Page’s former confidant, was sentenced in 2020 to 18 months in prison. Former President Donald J. Trump pardoned Levandowski in January.
Archer announced its merger in February with a SPAC, Atlas Crest Investment, in a deal that valued the company at $ 3.8 billion. Wisk said his suspicions were confirmed at the time, when Archer launched a presentation that contained designs similar to those of a Wisk patent application.
Wisk says his Cora aircraft can fly a pair of passengers for about 40 kilometers at a speed of about 160 kilometers per hour. Archer says it is developing an aircraft that can carry up to four people on a 60-mile journey, reaching 150 mph. Both aircraft are being designed to fly autonomously.
It is unclear whether Wisk’s concerns emerged in Archer’s assessment of Atlas before the two struck a deal. SPAC is supported by an affiliate of investment bank Moelis & Company, which relied on its bankers and others to help veterinarian Archer, the bank’s founder, Ken Moelis, told The New York Times in an interview announcing the transaction.
“We had 35, 40 people in it – and we attacked it like risky growth would do or anyone else,” said Moelis. “And we did it, too.”
A spokeswoman for Moelis declined to comment.
Other companies looking to manufacture electric aircraft include Joby Aviation, which announced a $ 6.6 billion deal with a SPAC led by LinkedIn co-founder Reid Hoffman in February, and German startup Lilium, which went public last month. by merging with a SPAC led by former General Motors executive Barry Engle.
These deals are just a small slice of SPAC activity this year, as investors, celebrities and athletes rushed to participate in Wall Street’s new favorite toy. So far this year, 299 SPACs have raised $ 97 billion, according to SPAC Research – more than in the entire year 2020.
But regulators and some investors say more scrutiny is needed. The Securities and Exchange Commission issued two notices last month alerting companies that are considering merging with SPACs to ensure that they are ready for all the legal and regulatory requirements that a publicly traded company implies. Many investors known as short sellers, who specialize in betting that companies’ stock prices are bound to fall, have opted for SPACs like Atlas Crest, which is among the 20 best-selling SPACs.
The electric aircraft market is in its infancy, but it holds great promise. The prospect of flying vehicles of the “Jetsons” type has come close to reality in recent years, thanks to advances in the design of batteries and aircraft. A high-risk race to build the first viable electric plane is underway, and some airlines are betting that these vehicles can help them achieve their goals of eliminating or offsetting their greenhouse gas emissions.
Scott Kirby, United’s chief executive, said the Archer aircraft is unlikely to be used for commercial flights, but is ideal for short trips to and from the airport.
“They are not only more environmentally friendly, but much quieter than a helicopter,” said Kirby on Tuesday during an event organized by the Council on Foreign Relations. “And, as they have 12 rotors, they will, I believe, ultimately be safer.”
Still, the widespread use of electric air taxis is probably years away. These aircraft can never become more than a luxury used by very wealthy people, because companies and governments can create much cheaper ways to transport people without emissions.