• How Not To Startup

    How Not To Startup

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    There are many eVTOL programs out there. Not quite as high as the number of atoms in the universe, or the number of grains of sand on a beach, but there are a lot.

    When there are so many startups trying to exploit a market that has yet to be shown to exist, there are a few things a startup should want to avoid.

    Getting into a lawsuit with two of the world largest corporations is probably one of the things that you most want to avoid.

    Wisk is owned by Boeing, Google and likely a bunch of other organizations – but Boeing and Google, and their lawyers, are the ones you would worry about. Wisk appears to be well financed and have a powerful but low key presence in the industry. They have been developing their product for more than 10 years. Their design is mature and they are well into flight testing, and as far as I can tell, some way into the formal certification process.

    Archer is a more recent company who have gone through a rapid engineering development phase and have some very nice renders of a multirotor concept that they are using to generate excitement in the investor community.

    Wisk has filed a lawsuit against Archer (https://wisk.aero/wp-content/uploads/2021/04/2021.04.06-Wisk-Complaint-Against-Archer.pdf)

    The basis of the complaint is “This is an action for trade secret misappropriation and patent infringement”. Wisk is accusing Archer of stealing data/information and patent infringement.

    It is worth reading the whole document, however there are some immediate similarities between some Wisk designs (that Wisk did not pursued for their chosen first to market configuration) and the Archer Aircraft.

    I think the patent claim is weaker than the claim of “trade secret misappropriation”. The key paragraph is on pages 18 and 19:

    On his last day with Wisk, Engineer Z turned in his Wisk-issued laptop computer. A forensic analysis of that computer revealed that, between 3:00 and 4:30 pm, on December 25, 2019, he downloaded approximately 380 files from Wisk’s secure, corporate Google Drive repository. During that same time period, he also inserted two USB storage devices into the Wiskissued laptop and copied files to those storage devices. He did not turn in those USB storage devices before leaving Wisk and, on information and belief, the files written to those devices remain in his possession while he works at Archer. 

    The USB devices were just the tip of an iceberg. After downloading hundreds of files in the afternoon, Engineer Z did not call it a night. Instead, forensic records from Wisk’s Google Drive account reveal that, between 10:52 pm and midnight on December 25, 2019, he connected to Wisk’s Drive account from a private network and downloaded thousands of additional files—more than 3,400 files. This download is not reflected on any device he turned in to Wisk when he resigned and, on information and belief, those files remain in his possession while he works at Archer.

    The court filing goes on to define the data they claim was taken:

    The sheer volume of the theft makes it impractical to describe every single stolen Wisk trade secret in this Complaint. Nonetheless, the stolen files can be categorized into at least five general categories of trade secrets: aircraft designs, component designs, system designs, facility inventory, and test data.”

    This is described in more detail in the court filing.

    Two key points spring to mind.

    1. If Wisk has evidence of data theft, this is evidence of a crime. You would expect that Wisk would be working with law enforcement towards a criminal indictment of the individuals involved. Such an indictment, and a conviction, would help this lawsuit as it would add significant credence to their claims. Even if Archer did not benefit from the alleged data theft the individuals would still be guilty of the alleged theft and a criminal case could proceed separate from this lawsuit.
    2. If criminal charges can be brought, how many people inside Archer are at jeopardy of being charged as an accessory to the crime? When you consider the potential value scale of the alleged data theft it is huge, Archer has declared a market valuation of over 3 billion dollars. How much of the value is directly due to the value of the data alleged to have been stolen. What did Wisk pay to develop that data? Who at Archer was aware of the alleged theft. If the allegations are true there would also be charges regarding accessory to the crime and possible criminal conspiracy charges.
    3. What does Wisk want? I don’t think they are short of funding so they don’t really need the money. In a crowded field of competitors it would be in their interest to remove one of their opponents from the field of play. I have to believe that the true aim of Wisk is to end the Archer program and make sure they are closed down. If the claims Wisk are making are true this would be rational and justified.

    The individuals involved know who they are and they should be lawyering up in a hurry. Archer and their SPAC partner Atlas Crest must be having some tense conversations. So much of the SPAC valuation that Archer is relying on for funding derives from the confidence of the investment market in the company. If you have Google and Boeing trying to take you down, you may have trouble creating the confidence you need (sarc.).

    Will the filing of the lawsuit alone be sufficient to prevent the SPAC valuation Archer need and has their doom already been cast in stone?

    And a note to engineers – when you leave a company there is a fine line between retaining a record of the work you retrain liability for (designs and reports you have signed) and appropriating data you do not own. What are your rights? What are your responsibilities to your employer and yourself?

    Could there be an innocent explanation for the behaviour Wisk describes in their lawsuit? If criminal charges are not brought does it mean that Wisk’s suit has no merit?

    Time will tell.