San Francisco Sues Drone Maker for $34 Million

SAN FRANCISCO (CN) – San Francisco sued a drone maker for $34 million, claiming it took that much in orders for a drone that can autonomously track and film a person and then safely land in the user’s hand, but never shipped a single product or issued a refund.

Relying on an impressive promotional video that Lily Robotics said was made with its product, “pre-order” customers paid $499 to $899 for a drone and their credit cards were promptly charged—and that’s all that happened, the San Francisco district attorney says in the Jan. 12 lawsuit in Superior Court.

The snowboarding and kayaking scenes were actually shot using a much more expensive professional camera drone, according to District Attorney George Gascon. He wants refunds for thousands of people who paid for Lily Robotics’ “Throw & Go” drones, and penalties for false advertising and unfair business practices.

“According to defendant’s advertising, the user simply throws the Lily in the air to begin filming and directs the Lily with a remote tracking device,” Gascon says in the lawsuit.

Lily claims users can choose from several pre-determined flight paths that will follow, lead, or loop around the user, that its camera drone is waterproof and will land safely in the user’s hand.

Lily released its promotional video in May 2015 and by the end of the year it had attracted more than 30 million views — and $34 million in sales for more than 60,000 units. But the single-product company did not mention that the video’s point-of-view shots “were in fact filmed by a much more expensive, professional camera drone (the DJI Inspire) that was not made by Lily Robotics,” the district attorney says in the complaint.

Since it takes two people to film the point-of-view shots, “The DJI Inspire was the opposite of the ‘autonomous’ camera that Lily Robotics was touting,” and the company “intentionally misled” its customers, the complaint states.

The complaint cites an excerpt from an email in which Lily’s founder and CEO Antoine Balaresque worried that a “lens geek” might figure out that the point-of-view shots were not from a Lily camera: “‘I don’t know much about lenses but I think we should be extremely careful if we decide to lie publicly.’”

Customers who took the pre-order offer were promised early 2016 shipment, but Lily announced several delays and recently told U.S. customers to expect them by the end of January 2017, according to the lawsuit.

Gascon says that “not a single unit has been shipped.”

Lily spokeswoman Kelly Coyne could not comment on any specific allegations, but said the company was already shutting down and processing refunds when the lawsuit was filed.

She said employees were notified a few weeks ago and “a significant number of customers have already received refunds.”