Archer prevails over Wisk in first round of trade secrets battle

Avatar for Elan HeadBy Elan Head | July 21, 2021

Estimated reading time 3 minutes, 54 seconds.

Update: In an order filed on July 22, Judge William Orrick denied Wisk’s motion for a preliminary injunction. “In essense [sic], Wisk has not shown a likelihood of success on the merits that defendant Archer Aviation Inc. has misappropriated its particular asserted trade secrets,” Orrick wrote. Find Archer’s response to the ruling here and Wisk’s response here.

The federal judge overseeing the legal battle between rival eVTOL developers Wisk and Archer said he is inclined to deny Wisk’s motion for a preliminary injunction.

Archer Maker eVTOL
Wisk has accused Archer of stealing the design for its Maker eVTOL, as well as a number of trade secrets related to systems and components. Archer Photo

In a tentative ruling issued ahead of the July 21 hearing on the motion, Judge William Orrick of the U.S. District Court for the Northern District of California said that Wisk has failed to show that the trade secrets it has accused Archer of stealing derive economic value from their secrecy, and that Wisk’s “evidence of misappropriation is too equivocal to warrant a preliminary injunction.”

Wisk filed its motion for preliminary injunction on May 19, asking Orrick to prohibit Archer from using or disclosing what Wisk contends are stolen trade secrets relating to critical elements of Archer’s aircraft, systems, and component designs.

Archer, which stands to gain $1.1 billion in gross proceeds from an expected combination with the blank-check company Atlas Crest Investment Corp. (NYSE: ACIC), asserts that it has never received or used any Wisk trade secret, and that Wisk’s lawsuit is an attempt “to kill Archer’s impending merger that is essential to its continued existence.”

In his tentative ruling, Orrick said that Wisk provided insufficient evidence for each putative trade secret it asserted, and that “Wisk’s circumstantial evidence of misappropriation does not carry its burden.”

While “there are some arguable indications of misappropriation,” he wrote, “the balance of hardships favors Archer because, without solid evidence of misappropriation, an injunction would gravely threaten its business.”

Archer doesn’t expect to commercialize its electric air taxi until 2024 at the earliest, while Wisk has yet to specify a go-to-market date for its next-generation aircraft. According to Orrick, “this case will go to trial long before either party goes to certification and market, so the hardship on Wisk is less.”

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