Archer Aviation Sues Wisk Aero for $1 Billion | Legal Dispute

Archer Aviation Pursues $1 Billion in Damages from Wisk Aero

Archer Aviation is formally seeking $1 billion in damages from Wisk Aero, as evidenced by recent court submissions on Tuesday. This action represents a substantial escalation in the existing legal conflict between the two companies competing in the emerging air taxi market.

Allegations of a Defamatory Campaign

According to the filing, Wisk engaged in a deliberate and misleading public relations effort. This campaign allegedly disseminated false and damaging statements concerning Archer Aviation to a global audience.

Archer contends that this “smear campaign” has demonstrably hindered its capacity to secure funding. Furthermore, it asserts that the campaign has damaged crucial business relationships, leading to financial losses likely to surpass $1 billion.

The Origins of the Legal Dispute

The two companies have been embroiled in a contentious legal battle for a significant portion of this year. The initial lawsuit was filed by Wisk in April within the U.S. District Court for the Northern District of California.

Wisk’s claim centers around allegations that Archer misappropriated confidential trade secrets. These secrets reportedly pertain to Wisk’s pioneering eVTOL aircraft, known as Cora.

The lawsuit further alleges that a former Wisk employee, Jing Xue, illicitly downloaded thousands of proprietary files from a company computer before accepting a position at Archer Aviation.

Archer’s Counterclaims

This is not the first instance of Archer responding to the accusations in a legal setting. Initially, a motion to dismiss the suit was filed in early June.

Subsequently, later that month, Archer submitted a separate court document arguing that its aircraft design was fully developed and established prior to Wisk filing any relevant patents with the U.S. Patent and Trademark Office.

Valuation Adjustments and Merger Plans

Archer Aviation unveiled a prototype of its Maker aircraft in February. This announcement coincided with the company’s plans to become publicly traded through a merger with Atlas Crest Investment Corp.

The initial pro-forma enterprise value of this merger was estimated at $2.7 billion. However, late last month, Archer reduced its valuation by $1 billion as part of a “strategic reset” of the merger terms.

A company spokesperson clarified to TechCrunch that the $1 billion damage claim is purely coincidental to the valuation adjustment.

The spokesperson also confirmed that the planned merger remains on schedule.

Statements from Both Companies

Regarding the lawsuit, the Archer spokesperson stated, “We have no plans to drop our counter-claim regardless of any moves Wisk may make.”

A Wisk spokesperson dismissed Archer’s counterclaim as “ludicrous,” attributing the company’s difficulties to self-inflicted issues.

The spokesperson characterized Archer’s filing as containing “distortions and distractions” intended to divert attention from the serious allegations of patent and trade secret misappropriation.

Wisk intends to vigorously pursue its case against Archer Aviation.