The U.S. District Court in Seattle has overturned the verdict of a May 2024 jury trial that ordered Boeing to pay damages in excess of $70 million to electric aircraft start-up Zunum. In a hearing on August 14, Judge James Robart ruled in favor of all of Boeing’s claims against the earlier verdict over alleged breaches of trade secrets and interference with Zunum’s plans to partner with engine manufacturer Safran to develop the 12-seat ZA10 hybrid-electric regional airliner.
Boeing loaned a total of $9 million to Seattle-based Zunum, which also received $800,000 in grants from the state of Washington. In 2018, both the U.S. aerospace group and JetBlue Airways withdrew support, and the program ground to a halt with the start-up failing to line up other backers.
Safran Helicopter Engines, which had agreed to develop a new 3Z version of its Ardiden turboshaft engine for the ZA10’s electric generator, reduced its commitment to the program when it became clear that it was backed by insufficient funding. Zunum had aimed to bring the aircraft to market in 2022.
Legal action began in November 2020 when Zunum founders Ashish Kumar and Matt Knapp sued Boeing for trade secrets violations along with breaches of proprietary information agreements and investment rights letters (IRLs) associated with loans of $5 million and $4 million. In the filing with the King County Superior Court, they also made a declaration refusing to repay the loans and alleged “tortious interference with a business expectancy” in connection with Zunum’s planned partnerships with both Safran and United Technologies Aerospace Systems.
Boeing promptly filed counterclaims, arguing that Zunum had breached its agreements. In the countersuit, the airframer’s lawyers said Knapp and Kumar had mismanaged the venture and had unrealistic expectations about its value.
The case moved to the U.S. District Court in July 2021 but did not reach the trial stage until early May 2024. Returning a mixed verdict on the claims, the jury found that Boeing had misappropriated 11 of the 19 alleged trade secrets, breached one of the IRLs, and tortiously interfered with Zunum’s business expectancy with Safran. It denied other claims by Zunum, rejecting some claims for damages.