Ninth Circuit Revives $72 Million Verdict Against Boeing in Trade Secret Case

The Allegations

Zunum Aero Inc., a Seattle-based electric jet startup, accused Boeing of misappropriating its proprietary hybrid-electric aircraft technology. According to trial testimony, Boeing initially invested in Zunum while allegedly seeking access to confidential trade secrets in violation of nondisclosure agreements. Zunum claimed Boeing then used its industry influence to dissuade investors, which ultimately forced the startup to cease operations.

The jury heard evidence that Boeing had expressed interest in Zunum’s technology as early as 2017, entering into investor agreements that limited Boeing’s use of proprietary information. Internal company communications introduced at trial suggested that Boeing employees sought to incorporate Zunum’s innovations into their own design process.

After an eight-day trial in 2024, a jury awarded Zunum $72 million in damages, finding Boeing liable for trade secret misappropriation, breach of contract, and interference with business expectancy.

The Post-Trial Ruling

Despite the verdict, U.S. District Judge James Robart vacated the award in August 2024. He concluded that Zunum had provided “only vague and amorphous descriptions” of its trade secrets and therefore failed to establish protectable intellectual property at trial. This decision temporarily nullified the jury’s award.

However, the case became more complex when Judge Robart disclosed that his spouse had acquired Boeing stock during the litigation through a retirement account. Though the judge divested the holdings, the disclosure came after judgment was entered, raising questions about impartiality.

The Ninth Circuit’s Decision

On appeal, a three-judge panel of the Ninth Circuit disagreed with Judge Robart’s ruling and reinstated the $72 million verdict. The appellate court emphasized that Zunum’s witnesses—including technical experts—had offered sufficient evidence that the trade secrets were specific, valuable, and not generally known in the industry.

“Zunum’s fact and expert witnesses testified to the time, effort, and money it took Zunum to develop its portfolio of trade secrets,” the panel noted, adding that contemporaneous Boeing documents showed the company recognized the difficulty of replicating the technology.

The court also ordered that further proceedings be reassigned to a different judge, citing the late disclosure of Boeing stock purchases by Judge Robart’s spouse. According to the panel, “This delayed disclosure, taken together with the district court’s consistent rulings in Boeing’s favor during and after trial, could give an objective observer reason to question the district judge’s impartiality.”

Industry Impact

Zunum’s attorneys praised the ruling as a major win for innovators in the aviation sector. Vincent Levy of Holwell Shuster & Goldberg LLP told Law360: “The Ninth Circuit’s ruling affirms what we have said from the start — that Zunum had an enormous opportunity to remake air travel, but Boeing took that opportunity away.”

Zunum issued its own statement characterizing the decision as a broader victory for startup ventures in emerging industries: “When a corporate behemoth preys on new ventures, innovation is stifled. We hope this sets an important precedent in aviation, an industry that is critical to our economy: that size is not a license to take, and that competition is key to progress.”

The Law Firms Involved

Zunum is represented by Holwell Shuster & Goldberg LLP and Corr Cronin LLP. Boeing is represented by Hueston Hennigan LLP and Perkins Coie LLP.