Archer Aviation's stock slumps after Joby Aviation files lawsuit

The high-stakes competition between Joby Aviation (JOBY) and Archer Aviation (ACHR) to dominate the air -taxi market took a divisive turn last week when the former filed a lawsuit accusing the latter of "corporate espionage."

The lawsuit, filed in a California Superior Court in Santa Cruz, called the alleged corporate espionage "planned and premeditated," stemming from the hiring of George Kivork, the former US state and local policy lead for Joby.

According to the complaint, Archer began recruiting Kivork this past summer.

Because of the nature of Kivork's position at Joby, it meant he "had access to confidential and proprietary information regarding Joby’s strategic partnerships, regulatory strategies, technical information, and communications with stakeholders, among other sensitive information that would be valuable for a competitor," the lawsuit states.

And because the two companies are "operating in the same field," Joby alleges that "Archer knew that Kivork had access to exactly that kind of information."

Joby further alleges that two days before he announced his resignation from the company, Kivork "downloaded dozens of files from Joby's systems" and sent them to his personal email account.

According to Joby, the files that Kivork allegedly downloaded contained "confidential partnership terms, business and regulatory strategies, infrastructure strategies for vertiports and airport access, and technical information about Joby’s aircraft and operations."

Archer claims lawsuit is 'entirely without merit'

Both Joby and Archer are at the forefront of the electric vertical take-off and landing (eVTOL) space that is looking to modernize air mobility across the globe. Both companies are expected to launch commercial air taxi service in the Middle East in 2026.

"The eVTOL sector is an emerging one with significant potential for the field and the world," Joby stated in its complaint. "It is imperative that the innovative work done by Joby in this field—representing billions of dollars and innumerable man hours over the course of nearly two decades—is protected from this type of espionage to allow the sector to thrive."

Archer's stock has now slumped nearly 10% over the past five days and has plunged 37.8% over the past month.

The company denies Joby's allegations.

“Joby is turning to baseless litigation in an attempt to distract from its own shortcomings and slow down its leading competitor,” Eric Lentell, Archer’s chief legal and strategy officer, said in a statement to TechCrunch.

Lentell insists that the lawsuit is "entirely without merit," and claims that it "does not identify a single specific trade secret let alone any evidence of misappropriation." He calls Kivork a "non-technical employee" that is working in a business development role for Archer.

"Joby is improperly attempting to weaponize the legal system to achieve through bad faith litigation what it cannot accomplish through fair competition," Lentell said. "Archer remains focused on building the future of advanced aviation in America.”

Although Lentell accuses Joby of trying to "distract from its own shortcomings" with the lawsuit, the two California-based companies are on remarkably parallel paths.

Both Joby and Archer have made entries into the defense sector, they’re both seeking to enter the Trump administration’s VTOL pilot program and Archer and Joby are each making strides to expand their US-based businesses into the Middle East.

And the two startups also both went public in 2021 through special purpose acquisition companies.

One difference is that the two stocks have been on divergent paths this year, with Archer down 26.4%, while Joby has surged 60.7%.