Drone Law Brief | Vol 3: December 2025
- Knowledge Team
- 12 minutes ago
- 8 min read
Editor's Note
In this edition of the Drone Law Brief, we cover the most important developments of the past weeks:
SEBI has fined and barred Droneacharya, one of the few listed drone companies in India, and it’s promoters along with some associated entities, from accessing the securities markets after it conducted an investigation on misleading corporate announcements, misrepresentation of financial statements and mis-utilisation of IPO proceeds, among other issues.
Joby took it’s former employee & Archer aviation to court over theft of confidential data and it’s usage to obtain commercial deals to valuable vertiport locations. This case is another example of corporate espionage in this space, following recent cases in India with NewSpace Research having filed a writ petition in the High Court of Karnataka earlier this earlier and a Special Investigation Team constituted to investigate it’s former employee stealing sensitive data with national security applications and Raphe MPhibir saying that it’s ex-employees had used it’s proprietary data via another firm to offer similar products. We make note of the precautions that drone & eVTOL companies should take to safeguard their proprietary information.
US department issues memo on funding of UAS projects.
UK CAA issues policy note on operation of UAS in atypical air environments.
INDIA
SEBI fines & bars Droneacharya, it’s promoters from security markets On 28 November, 2025, the Securities and Exchange Board of India (‘SEBI’) passed a final order against DroneAcharya Aerial Innovations Limited (‘DAIL’), a BSE SME listed drone company, and its promoters. The investigation, covering FY 2022-23 and 2023-24, was triggered by suspicions of mis-utilization of IPO proceeds, financial misrepresentation, and diversion of funds. SEBI concluded that the company's promoters, aided by financial advisors and vendors, orchestrated a fraudulent scheme involving misleading corporate announcements to artificially maintain share prices, thereby facilitating the exit of pre-IPO investors at the cost of public shareholders.
SEBI looked into the following:
Fraudulent Scheme: DAIL’s issuance of Optionally Convertible Preference Shares (OCPS) pre-IPO with a promise of listing, and subsequently issued misleading corporate announcements (such as regarding non-binding MoUs or "Make in India" initiatives that were actually import deals) to inflate/sustain share prices for the benefit of pre-IPO investors.
Financial Misrepresentation: DAIL’s inflation of revenue and profits by recognizing income from various entities without actual delivery of goods/services or performance of obligations.
Mis-utilization of IPO Proceeds: Rs. 33.96 Crores raised were used for the stated object (‘Purchase of Drones and other accessories’) or diverted to other vendors (like Micro Infratech) for unstated purposes without proper shareholder approval.
Disclosure Lapses: 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 was found to have engaged in a fraudulent scheme, financial misrepresentation, and mis-utilization of IPO proceeds. It has been restrained from accessing the securities market for 2 years.
Mr. Prateek Srivastava (MD) & Ms. Nikita Srivastava (CFO) have been held primarily responsible for devising and executing the fraudulent scheme, financial misrepresentation, and diversion of funds. They have been restrained from accessing the securities market for 2 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 1-2 years.
Read SEBI’s order here.
GLOBAL
United States
eVTOL race lands Joby and Archer in Court: Joby Aero, Inc. (‘Joby’), on 20th November, filed a complaint before a California Court alleging, among other things, misappropriation of data, breach of contract & interference, and breach of loyalty & fiduciary duties, against its rival, Archer Aviation, Inc. (‘Archer’) and its former employee George Kivorke (its US State and Local Policy Lead), who went on to join Archer. In July 2025, Kivork informed Joby he was resigning to take a position at Archer, a competitor founded in 2018. Two days before announcing his resignation, Kivork allegedly secretly downloaded and emailed himself dozens of highly valuable Joby files, in violation of the agreements signed with Joby. These stolen files allegedly contained confidential partnership terms, business and regulatory strategies, and technical specifications. Joby claims the information was immediately used by Archer for corporate espionage. Shortly after Kivork left, one of Joby's strategic partners, a major real estate developer (‘Developer’) with whom Joby had an exclusive agreement, reported that Archer had approached them with detailed knowledge of the confidential terms of Joby’s agreement. Archer allegedly used this illicit information to offer a ‘more lucrative deal,’ allowing Archer to ‘skip over the negotiations and unfairly guarantee that its offer would beat Joby’s,’ leading the Developer to terminate the exclusive Agreement with Joby. The complaint details how Joby intended to use the Developer’s extensive infrastructure as vertiports due to their prime locations and ongoing investments.
Joby says it attempted to get Kivork and Archer to cooperate, however, upon their failure to do so, filed the complaint “For the sake of the success of the burgeoning eVTOL industry, and to ensure fair competition". In it’s complaint, Joby has alleged the following:
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 took reasonable steps to protect, for their competitive benefit.
Computer Fraud: Kivork violated the California Penal Code by altering security settings on Joby's systems to gain wrongful control over Joby's confidential data, even after leaving the company.
Breach of Contract and Related Interference
Breach of Confidentiality/Non-Competition by Kivork who breached the terms of his PIIA by failing to return confidential information, using it for Archer's benefit, falsely certifying he had taken no documents, and assisting a competitor (Archer) while still employed.
Interference with Joby's Strategic Partnerships by Archer which intentionally 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 by Kivork, who in his senior role, owed Joby duties of good faith and loyalty, which he allegedly breached by stealing confidential information and taking actions, such as manipulating file ownership, to assist his future employer (Archer) in competing against Joby while still on Joby’s payroll.
Aiding and Abetting by Archer, who knowingly provided substantial assistance and encouragement to Kivork in breaching his fiduciary duties and duty of loyalty, thereby obtaining competitive advantage.
Indian Drone and eVTOL companies have also had similar troubles recently:
In October, 2025, Raphe Mphibir CEO Vivek Mishra had posted on LinkedIn about a similar instance of some ex-employees having taken proprietary data and joined hands with competitors.
In April, 2025, the High Court of Karnataka had directed the Karnataka Government to constitute a Special Investigation Team headed by the Director General of Police, in 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, including UAV source codes, CAD designs, confidential defense technologies, copyrighted information, and project files, for the benefit of a rival firm, Lenviz Technologies Pvt. Ltd.
The High Court noted that NRT is a drone manufacturing company specializing in aerospace and defense research, whose major clientele includes national security stakeholders such as the Indian Army, Air Force, Navy, BEL, HAL, and DRDO. NRT had stated in its initial police complaint that the stolen information was criminally abused by the accused to develop strikingly similar products and secure defense contracts, causing irreparable loss.
NRT also stated before the High Court that the investigation by the local police suffered from a lack of fairness demonstrated by the local police, including delays in taking accused into custody and allegations of corruption against the investigating officer, besides alleged interference during the proceedings of the court commissioner that was appointed by another bench of the High Court, which had attempted to visit accused Lenviz’s offices in Noida.
Given that the case carried the colour of a cyber espionage and involved complex defense technology, the Court concluded that conventional officers were ill-equipped to handle the matter. Consequently, the High Court had allowed the petition and ordered the investigation be transferred to a SIT headed by a Director General of Police, recognizing that the State must evolve to tackle new-age cyber crimes. It directed that there will be a continuing mandamus and had directed the SIT report to be filed in due course. Matter will now come up. Order of the High Court of Karnataka passed on 25 April, 2025 can be accessed here.
What should drone and eVTOL companies do? At Sigma Chambers, we have acted for multiple drone tech companies recently in cases where proprietary information was not returned by ex-employees and/or there were indications that the information was being used by ex-employees contrary to confidentiality & other obligations. These cases underscore the extreme vulnerability of highly innovative, capital-intensive businesses to internal threats and the essential role of legal protections in securing market leadership:
Protect IP Through Comprehensive Agreements: Ensure every employee, especially senior staff, signs a robust Proprietary Information and Inventions Agreement (PIIA) that clearly defines proprietary information, outlines post-termination confidentiality obligations, and includes non-compete/ non-solicitation clauses (to the extent allowed by law), as Joby did.
Layer Security and Monitor Digital Activity: Relying solely on standard firewall measures is insufficient. Companies must employ extensive IT security measures (like SSO/two-factor authentication) and actively monitor, log, and audit employee digital activity, paying close attention to large downloads, external emails of sensitive files, and unauthorized changes to file ownership/security permissions leading up to an employee's resignation.
Establish Clear Exit Protocols (Offboarding): Formal exit interviews and the signed acknowledgement that a departing employee has not taken confidential documents serve as critical evidence in subsequent litigation, reinforcing contractual obligations.
IP Extends Beyond Technical Drawings: Remember that valuable intellectual property includes non-technical strategic data like commercial launch strategies, infrastructure plans, regulatory roadmaps, and confidential deal terms with strategic partners, which are a treasure chest of competitive secrets that can be weaponized by competitors.
US department issues memorandum mandating UAS procurement requirements: This White House memorandum issued on 21 November 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) due to risks like 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. Crucially, 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, though limited exemptions are available for specific mission-critical operations.
United Kingdom
The UK CAA has released its Atypical Air Environment (AAE) Policy Concept, an innovative interim guidance designed to enable expanded BVLOS UAS operations in volumes of airspace where the risk of mid-air collision is significantly reduced due to close proximity to defined infrastructure (e.g., railways, windfarms, or structures within 50ft to 100ft). To secure an Operational Authorisation (OA) within an AAE, operators must implement stringent mitigations, including pre-tactical flight route notification (typically via NOTAM), employing high-intensity anti-collision lighting, and utilizing a robust onboard containment solution, such as geo-caging. This is 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.
Read our other articles here:
Comments