Archer and Wisk continue towards trial in trade secrets dispute

By Elan Head | August 25, 2021

The trade secrets battle between rival eVTOL developers Wisk and Archer “will be determined on the merits,” according to the federal judge overseeing the case.

In an opinion published Aug. 24, Judge William H. Orrick of the U.S. District Court for the Northern District of California declined to hand a decisive victory to either party at this early stage. Wisk contends that Archer stole its confidential eVTOL design and multiple trade secrets, while Archer has filed a counterclaim against Wisk, seeking more than $1 billion in damages for what it has described as an “extra-judicial smear campaign.”

In his latest order, Orrick expanded on his reasons for denying Wisk’s motion for a preliminary injunction against Archer last month. According to Orrick, “despite getting robust early discovery, including access to engineering documents, Wisk was not able to demonstrate that any of its particular asserted trade secrets was misappropriated.” Wisk likewise failed to show that the balance of hardships was in its favor, as a preliminary injunction would “essentially stop work on Archer’s core product, a significant harm,” he wrote.

However, Orrick also found that “Wisk’s disclosure and identification of its trade secrets are sufficient and it has plausibly alleged that Archer misappropriated at least some of them.” As a result, he denied a motion by Archer to dismiss the trade secret claims, meaning that the case will continue moving towards trial.

Wisk and Archer are both claiming Orrick’s latest order as a win. In a blog post, Archer called out those sections of the opinion that are most critical of Wisk, including a discussion of Wisk’s claim that Archer copied its motor simulation tool, which is one of the trade secrets in question. In making its argument, “Wisk mischaracterizes — really, invents — the evidence” and “Wisk’s contortion of the record is not well taken,” Orrick wrote.

“What is clear from today’s order is that the court conducted a thorough analysis of the evidence in arriving at its conclusions,” Archer asserted in its blog post. “The order only reinforces what we have been saying all along — that Wisk’s claims are nothing more than an attempt to stifle competition.”

Wisk disputed that characterization, telling eVTOL.com: “Archer’s attempt to avoid accountability failed. The court ordered Archer to be ready to stand trial next year, referring to Archer’s ‘arguable indications of misappropriation’” — including suspicious download activity by Wisk employees who left the company for Archer, and the short time between that activity and Archer producing a comprehensive presentation of its aircraft.

Notably, Orrick’s opinion includes an image of the eVTOL design that Archer co-founders Brett Adcock and Adam Goldstein were considering up until mid-2019, incorporating 12 ducted lifting fans across two parallel booms, and additional ducted fans across the tail. After the founders “developed doubts” about that design, they hired the consulting firm FlightHouse Engineering, which presented the concept that eventually became Archer’s Maker eVTOL, the company has claimed.

Orrick noted that “FlightHouse’s leadership is made up of former Wisk employees as well. . . . But Wisk never argues — despite its implication — that they misappropriated trade secrets.”