Collapsed Hybrid-Electric Planemaker Zunum Sues Former Partner Boeing, Alleging Misuse of Trade Secrets

Nov. 24, 2020

Nov. 24—Bothell-based hybrid-electric airplane startup Zunum, which ran out of cash and collapsed in July 2019, has filed suit against former investment partner Boeing.

The lawsuit filed in King County Superior Court alleges that Boeing "employed a targeted and coordinated campaign to gain access to proprietary information, intellectual property, and trade secrets" and then used its dominance in aerospace and its influence with suppliers "to execute on a strategy to delay and then foreclose" Zunum's operation.

Zunum's suit names Boeing's venture capital unit, Horizon X, as well as French engine supplier Safran as co-defendants, and asks for compensatory and punitive damages. Boeing declined to comment on the lawsuit.

Led by former Google and Microsoft senior executive Ashish Kumar, Zunum proposed building a family of small hybrid-electric planes with mostly composite airframes and Tesla-style batteries in the wings.

These were to be mass produced for use as air taxis or as commuter planes for business people on high-traffic, short-hop routes such as Silicon Valley to Los Angeles.

In 2017, Boeing Horizon X, along with New York-based airline JetBlue, agreed to invest in Zunum, instantly bolstering the startup's credibility.

In June 2017, the state of Washington's Clean Energy Fund kicked in an additional $800,000 in a research-and-development grant.

Last year, the company ceased operations, laid off almost all its staff, and closed its Bothell office, while creditors seized its equipment at a plant in Illinois where it was developing its electric motor.

Though Zunum seems to exist now only on paper, a spokesperson, while declining an interview, promised Monday to "be in touch with future updates on the company's progress."

The lawsuit alleges that Boeing repeatedly reneged on promises of funding and dissuaded other investors from putting in money, while it simultaneously used its position on Zunum's board to extract proprietary secrets.

" Boeing saw an innovative venture, with a dramatically improved path to the future, and presented itself as interested in investing and partnering with Zunum," the lawsuit states. "Instead, Boeing stole Zunum's technology and intentionally hobbled the upstart entrant in order to maintain its dominant position in commercial aviation by stifling competition."

Starting with a nine-seat model, Zunum planned to scale up to a 48-seat aircraft with a 1,000-mile range by 2027, and even larger versions later. The lawsuit claims these larger models posed a threat to the market for Boeing's smallest single-aisle jets.

Zunum alleges that Boeing copied "the plans, designs and technologies" it had disclosed to Boeing as an investor and as an observer on the startup's board.

After obtaining this proprietary information, the suit alleges, " Boeing approached Safran, to provide a hybrid-electric propulsion system for a different aircraft design," which it states was designated the Boeing Hybrid Electric 11.


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