U.S Appeals Court Sends $81 Million Award Against Boeing Flying Back In!

As reported by Reuters, the 9th US Circuit Court of Appeals has reinstated an $81 million award against Boeing, in a suit brought by Zunum Aero, an aircraft startup, accusing Boeing of stealing trade secrets. The appeal court overturned a California judge's decision to throw out a jury verdict in favour of Zunum, by rejecting the judge's finding that the information Boeing allegedly stole was not entitled to trade secret protection.

Zunum Aero was reportedly founded in 2013 to develop small commuter aircrafts that could travel up to 1,500 miles. Boeing's venture capital arm reportedly invested $5 million in Zunum in 2017. Zunum, in a 2020 lawsuit, reportedly alleged that it planned to start selling its planes in 2022, but halted development of its aircrafts after Boeing blocked its access to capital. Zunum also claimed that Boeing developed its own hybrid commuter aircraft using Zunum's trade secrets.

The US District Court set the final award at $81 million, but overturned the verdict in August, on the basis that Zunum did not identify its secrets or demonstrate the value of keeping them.

On appeal, the court overturned the lower court’s decision and held that the district court did not take into sufficient consideration the evidence presented by Zunum, including its expert reports and the inclusion of trade secret definitions in the evidence (see Zunum Aero v Boeing Company). The judge found that Zunum had provided sufficient specificity for the jury to make a finding that the secrets were worth protecting on the basis that the information was "not generally known, not readily ascertainable, and valuable". 

Ultimately, the appeal court also ordered that the case be assigned to a different district judge, as information came to light revealing that the judge who initially heard the case was potentially conflicted, because his wife had acquired Boeing stock on multiple occasions throughout the litigation.  In the appeal Court's view, this could give "the objective observer reason to question the district judge's impartiality in further proceedings”.