Wisk Aero’s civil lawsuit against Archer is set to go to a full trial after the U.S. District Court for the Northern District of California denied Wisk’s motion for a preliminary injunction against its eVTOL aircraft rival. The case hinges on Wisk’s accusations that Archer and several former Wisk employees stole trade secrets and used these as the basis for the Maker eVTOL technology demonstrator that Archer recently unveiled and intends to fly for the first time before the end of this year. Proceedings are set to resume with a case-management meeting on August 11 that could kick off a trial likely to last at least six months and be heard by a jury.
In a short ruling late on July 22, Judge William Orrick ruled that “Wisk has not shown a likelihood of success on the merits that defendant Archer Aviation has misappropriated its particular asserted trade secrets.” He indicated that there is more evidence to weigh over charges that Archer has steadfastly denied, adding, “There are some arguable indications of misappropriation but, even if the totality of that evidence raises ‘serious questions going to the merits,’ it is too uncertain and equivocal to support a finding of irreparable injury based on misappropriation or that the balance of hardships sharply favors Wisk.”
Archer co-founders Brett Adcock and Adam Goldstein claimed the ruling against the preliminary injunction represented a victory, pledging to defend itself against what they called “baseless claims” by Wisk. “It is clear to us from Wisk’s actions in this case that after recognizing Archer’s momentum and pace of innovation, Wisk began abusing the judicial and criminal justice system in an attempt to slow us down for its own lack of success,” they said in a written statement.
Wisk countered that the court’s denial of the preliminary injunction “has no bearing on the outcome of the case and does not exonerate Archer in the least.” The company noted that in this week’s hearing Judge Orrick said that Wisk “has many reasons that make it suspect there is a problem here."
The preliminary injunction motion was based on an expedited discovery process in which Wisk’s attorneys chased down documentation and deposed witnesses. According to sources close to the process, this involved more than one court order to compel compliance. Archer’s lawyers argued that Wisk’s case was based on nothing more than “knowingly false accusations.”
Regardless, the same sources indicated the extended discovery process for the main trial is likely to turn up significantly more information. Among the issues to be addressed in more depth will be the process and timeline around Archer’s development of the Maker design and, conversely, Wisk’s development of its “sixth-generation” eVTOL design, around which the accusations of intellectual property theft swirl. Archer’s lawyers will likely press its argument that Wisk didn't patent these designs until January 2020, after it learned of Archer’s plans.
Still pending is the outcome of a federal criminal investigation for which a number of subpoenas and search warrants have been issued. These investigations apparently focus on allegations that one or more former Wisk employees improperly took data from the company and shared it with their new employer Archer, which refutes these charges.
Archer is in the process of merging with special purpose acquisition company Atlas Crest Investment Corporation in a $.1 billion transaction that it says values the company at $3.8 billion. This deal had been expected to be completed by the end of the second quarter of 2021.
