Drone Law Brief | Dec, 2025: SEBI fines & bars Droneacharya & affiliates; Joby, Archer go head to head
- Knowledge Team
- Dec 16, 2025
- 6 min read
Updated: Jan 3
Editors' Note
In this edition of the Drone Law Brief, the most significant developments of the past weeks are covered:
SEBI has fined and barred Droneacharya, one of the few listed drone companies in India, along with its promoters and associated entities, from accessing the securities markets. This action followed an investigation into misleading corporate announcements, misrepresentation of financial statements, and mis-utilization of IPO proceeds, among other issues.
Joby has taken its former employee and Archer Aviation to court over the theft of confidential data. This data was allegedly used to secure commercial deals for valuable vertiport locations. This case exemplifies corporate espionage within the industry, paralleling recent incidents in India. NewSpace Research filed a writ petition in the High Court of Karnataka earlier this year, and a Special Investigation Team was constituted to investigate a former employee's theft of sensitive data with national security applications. Raphe MPhibir also reported that its ex-employees had utilized proprietary data via another firm to offer similar products. Precautions that drone and eVTOL companies should take to safeguard their proprietary information are highlighted.
The US Department has issued a memo regarding funding for UAS projects.
The UK CAA has released a policy note on the operation of UAS in atypical air environments.
India: SEBI's Investigation Findings
Key Findings
Financial Misrepresentation: DAIL inflated revenue and profits by recognizing income from various entities without actual delivery of goods or services or performance of obligations.
Mis-utilization of IPO Proceeds: The ₹33.96 Crores raised were not used for the stated purpose of purchasing drones and accessories. Instead, funds were diverted to other vendors, such as Micro Infratech, for unstated purposes without proper shareholder approval.
Disclosure Lapses: There was a failure to disclose related party transactions and incorrect shareholding pattern disclosures.
Holdings and Penalties
SEBI established that the company, its promoters, and others involved violated the SEBI Act, PFUTP Regulations, and LODR Regulations:
DAIL engaged in a fraudulent scheme, financial misrepresentation, and mis-utilization of IPO proceeds. Consequently, it has been restrained from accessing the securities market for two years.
Mr. Prateek Srivastava (MD) and Ms. Nikita Srivastava (CFO) were held primarily responsible for devising and executing the fraudulent scheme. They have been restrained from accessing the securities market for two years and imposed a monetary penalty of ₹20 Lakhs each.
Others involved in the fraudulent activities have been banned from accessing the securities markets for one to two years.
Read SEBI’s order here.
Global Developments in the UAS Sector
United States: Joby vs. Archer Aviation
On November 20, Joby Aero, Inc. (‘Joby’) filed a complaint in a California Court alleging misappropriation of data, breach of contract, and interference, against its rival, Archer Aviation, Inc. (‘Archer’), and its former employee George Kivorke, who transitioned to Archer.
In July 2025, Kivork informed Joby of his resignation to join Archer, a competitor founded in 2018. Allegedly, two days before announcing his resignation, Kivork secretly downloaded and emailed himself numerous valuable Joby files, violating agreements signed with Joby. These files reportedly contained confidential partnership terms, business and regulatory strategies, and technical specifications.
Joby claims that Archer immediately utilized this information for corporate espionage. Shortly after Kivork's departure, a major real estate developer, with whom Joby had an exclusive agreement, reported that Archer approached them with detailed knowledge of Joby’s confidential terms. Archer allegedly leveraged this illicit information to present a more lucrative offer, undermining Joby's negotiations and leading the developer to terminate the exclusive agreement with Joby. The complaint details Joby's intention to utilize the developer’s extensive infrastructure as vertiports due to their prime locations and ongoing investments.
Joby asserts that it attempted to engage Kivork and Archer in cooperation; however, upon their failure to comply, the complaint was filed “for the sake of the success of the burgeoning eVTOL industry and to ensure fair competition.”
Allegations in Joby's Complaint
Misappropriation and Computer Fraud
Trade Secret Misappropriation: Kivork and Archer allegedly violated the Defend Trade Secrets Act (DTSA) by using and disclosing Joby’s proprietary technical, commercial, regulatory, and deal structure information, which Joby had taken reasonable steps to protect, for their competitive benefit.
Computer Fraud: Kivork allegedly violated the California Penal Code by altering security settings on Joby's systems to gain wrongful control over confidential data, even after leaving the company.
Breach of Contract and Related Interference
Breach of Confidentiality/Non-Competition: Kivork breached the terms of his Proprietary Information and Inventions Agreement (PIIA) by failing to return confidential information, using it for Archer's benefit, falsely certifying he had taken no documents, and assisting a competitor while still employed.
Interference with Joby's Strategic Partnerships: Archer allegedly induced Kivork’s breach of contract and tortiously interfered with Joby’s exclusive contract and prospective economic advantage with the developer by using the stolen confidential deal terms to undercut Joby.
Breach of Loyalty and Fiduciary Duties
Breach of Fiduciary Duty and Duty of Loyalty: Kivork, in his senior role, owed Joby duties of good faith and loyalty, which he allegedly breached by stealing confidential information and manipulating file ownership to assist Archer in competing against Joby while still employed.
Aiding and Abetting: Archer knowingly provided substantial assistance and encouragement to Kivork in breaching his fiduciary duties, thereby obtaining a competitive advantage.
Recent Challenges for Indian Drone and eVTOL Companies
In October 2025, Raphe Mphibir CEO Vivek Mishra posted on LinkedIn about similar instances involving ex-employees taking proprietary data and collaborating with competitors.
In April 2025, the High Court of Karnataka directed the Karnataka Government to establish a Special Investigation Team (SIT) led by the Director General of Police. This action followed a case filed by NewSpace Research and Technologies Pvt. Ltd. (‘NRT’), which alleged that former employees, including a Vice-President, conspired to steal highly sensitive proprietary data for the benefit of a rival firm, Lenviz Technologies Pvt. Ltd.
The High Court noted that NRT specializes in aerospace and defense research, serving major clientele including national security stakeholders such as the Indian Army, Air Force, Navy, BEL, HAL, and DRDO. NRT stated in its initial police complaint that the stolen information was criminally exploited by the accused to develop strikingly similar products and secure defense contracts, resulting in irreparable loss.
NRT also expressed concerns about the investigation's fairness, citing delays in detaining the accused and allegations of corruption against the investigating officer. Given the case's implications of cyber espionage and its complexity involving defense technology, the Court concluded that conventional officers were ill-equipped to handle the matter. Consequently, the High Court allowed the petition and ordered the investigation to be transferred to an SIT, recognizing the need for the State to evolve in addressing new-age cyber crimes. The High Court directed that a continuing mandamus be established and that the SIT report be filed in due course. The order of the High Court of Karnataka, passed on April 25, 2025, can be accessed here.
Recommendations for Protecting Intellectual Property
Protect IP Through Comprehensive Agreements: Ensure that every employee, particularly senior staff, signs a robust Proprietary Information and Inventions Agreement (PIIA). This agreement should clearly define proprietary information, outline post-termination confidentiality obligations, and include non-compete/non-solicitation clauses, as Joby did.
Layer Security and Monitor Digital Activity: Relying solely on standard firewall measures is insufficient. Companies must implement extensive IT security measures, such as single sign-on (SSO) and two-factor authentication, while actively monitoring, logging, and auditing employee digital activity. Attention should be paid to large downloads, external emails of sensitive files, and unauthorized changes to file ownership or security permissions leading up to an employee's resignation.
Establish Clear Exit Protocols (Offboarding): Formal exit interviews and signed acknowledgments that a departing employee has not taken confidential documents serve as critical evidence in subsequent litigation, reinforcing contractual obligations.
IP Extends Beyond Technical Drawings: It is essential to recognize that valuable intellectual property includes non-technical strategic data, such as commercial launch strategies, infrastructure plans, regulatory roadmaps, and confidential deal terms with strategic partners. This information constitutes a treasure trove of competitive secrets that can be weaponized by competitors.
U.S. Department Issues Memorandum Mandating UAS Procurement Requirements
This White House memorandum, issued on November 21, 2025, mandated by the American Security Drone Act (ASDA), establishes a comprehensive government-wide policy requiring Federal agencies to minimize reliance on insecure, foreign-manufactured Unmanned Aircraft Systems (UAS). This directive addresses risks such as data breaches and embedded surveillance. Agencies must now integrate specific security procedures into all UAS procurements, requiring an impact assessment and applying safeguards such as multifactor authentication, software update controls, and cryptographic protection for sensitive Federal data stored or transmitted by the UAS. Effective December 22, 2025, Federal funds provided through grants or awards are explicitly prohibited from being used by recipients to procure or operate a prohibited unmanned aircraft system, although limited exemptions are available for specific mission-critical operations.
United Kingdom: Atypical Air Environment Policy Concept
The UK CAA has released its Atypical Air Environment (AAE) Policy Concept. This innovative interim guidance aims to facilitate expanded BVLOS UAS operations in airspace volumes where the risk of mid-air collision is significantly reduced due to proximity to defined infrastructure (e.g., railways, wind farms, or structures within 50ft to 100ft).
To secure an Operational Authorization (OA) within an AAE, operators must implement stringent mitigations. These include pre-tactical flight route notifications (typically via NOTAM), employing high-intensity anti-collision lighting, and utilizing robust onboard containment solutions, such as geo-caging. This marks the third edition of the policy.
Disclaimer: This publication is intended solely for informational and educational purposes. It summarizes recent legal and policy developments from publicly available sources and does not constitute legal advice, opinion, or endorsement by Sigma Chambers. All sources are hyperlinked.
Authors: *Abhinav Goyal, Kushank Sindhu
Readers can direct their queries or comments to the authors.
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