Federal Judge Throws Out Multi-Million Trade Secret Verdict Against Boeing

On May 30th, 2024, King 5 News reported that Boeing was liable for a trade secret violation. A jury in Washington State awarded a local start-up company (Zunum Aero) tens of millions of dollars in damages. However, in August, a federal court judge tossed out the $72 million verdict. As reported by Reuters, a federal court determined that the jury lacked “legally sufficient evidentiary basis” to make such a ruling. Here, our Florida trade secret protection attorney provides a more detailed overview of the case.

 An Overview of the Original Jury Verdict 

A jury found that Boeing misappropriated trade secrets from Zunum Aero—a small aerospace start-up company focused on building hybrid-electric aircrafts. The lawsuit, which was initiated by two MIT graduates who founded Zunum, claimed Boeing presented itself as a potential investor to access sensitive information. However, during due diligence, Boeing allegedly stole more than a dozen trade secrets. The federal jury in Washington State awarded the start-up company tens of millions in damages. Notably, the verdict emphasized Boeing’s actions were “willful and malicious“—meaning the federal judge had the authority to triple the value of the damages.

 On Review, a Federal Threw Out the Jury Verdict (No Trade Secret Violation) 

Federal court Judge James L. Robart of the United States District Court for the Western District of Washington overturned the $72 million trade secret violation jury verdict against Boeing. The judge determined that the plaintiff failed to adequately define the trade secrets it claimed Boeing had stolen. Further, the judge found that the plaintiff did not properly demonstrate that the alleged secrets derived value from being unknown to others. Instead, the judge determined that the alleged trade secrets were too vague to qualify for legal protection under trade secret laws. On these grounds, Judge Robart ruled that the jury’s verdict lacked a legally sufficient evidentiary basis. It was thrown out.

The Plaintiff Expressed Disappointment, Plans to Appeal 

The trade secret dispute is not necessarily over yet. Representatives for Zunum Aero expressed dissatisfaction with the federal judge’s ruling. They also indicated their plans to appeal the decision in order to get the jury verdict reinstated by a higher court.

 Know the Law: Three Elements of a Trade Secret 

A trade secret consists of information that has significant commercial value, is not generally known or readily ascertainable by others, and is the subject of efforts by the owner to maintain its secrecy. Here are three required elements of a trade secret:

1. Commercially Valuable Information: For information to qualify as a trade secret, it must offer a competitive advantage or economic benefit to its holder. The commercial value is central to the definition of a trade secret. It must contribute directly to the business. You cannot obtain a trade secret for information that lacks any commercial value.
2. Not Known By Others: A trade secret must be information that is not generally known to the public or to competitors in the industry. Its secretive nature is what makes it valuable. The confidentiality of the information prevents competitors from gaining the same advantages without investing similar resources in development or discovery.
3. Reasonable Effort to Protect: The owner of a trade secret must demonstrate that reasonable measures have been taken to keep the information confidential. It can involve physical security measures and legal tools like non-disclosure agreements and employee training programs to maintain secrecy. If sufficient efforts are not made, information cannot qualify for trade secret protection.

 Set Up a Confidential Consultation With a Top-Tier Florida Trade Secret Lawyer Today

At Perkins Law, our Florida IP rights attorney has extensive experience handling trade secret cases. If you have any specific questions or concerns about trade secret protection, we are more than ready to help. Give us a phone call now or contact us online for a completely confidential initial consultation. Our firm provides trade secret representation throughout South Florida.

Sources:

king5.com/article/news/local/jury-awards-potential-damages-trade-secrets-lawsuit-against-boeing/281-564a676e-0f66-48a9-9ec1-710a1b891ca8#:~:text=SEATTLE%20%E2%80%94%20A%20jury%20has%20found,triple%20to%20around%20%24250%20million.

reuters.com/legal/litigation/boeing-convinces-us-judge-overturn-72-mln-trade-secrets-verdict-2024-08-14/