In a lawsuit filed July 17, Tesla accused its fledgling EV rival Rivian Automotive of efforts to “misappropriate Tesla’s trade secret, confidential and proprietary” information. The company is making its case before a California state court in San Jose (Case 20CV368472), saying it discovered an “alarming pattern” among employees supposedly defecting from Tesla to Rivian with information that, Tesla claims, could give the upstart automaker a competitive advantage.
According to the court documents, Tesla says it uncovered four employees who took valuable and confidential information from the company. One supposedly did so on Rivian’s instruction, with the plaintiff saying, “Both Rivian and the employee knew full well that taking such information would violate the employee’s non-disclosure obligations to Tesla. Nonetheless, the employee expropriated for Rivian the exact information Rivan sought — highly sensitive, trade secret information that would give Rivian a huge competitive advantage.”
Bloomberg points out in its report that Rivian says its employees are barred from bringing former employers’ intellectual property into its systems. As such, Rivian denies Tesla’s allegations. The company said in a statement, “we admire Tesla for its leadership in resetting expectations of what an electric car can be.” However, it also said the lawsuit’s claims were baseless, and against the company’s policies and culture.
Tesla claims two employees lied about taking information
Apart from the employee whom Tesla claims took information at Rivian’s direction, the company says it identified two other employees who “falsely denied” taking any information. One employee supposedly interfered with an internal investigation, further stoking suspicions. One of the four employees was never interviewed because he had already moved onto Rivian by the time Tesla discovered the alleged theft.
Tesla further states in the lawsuit that it’s a prime target for Rivian. “As the world leader in electric vehicles and vehicle automation,” the complaint says, Rivian is all too eager to poach the company’s talent and sensitive information. As of July 2020, Tesla says that Rivian has hired 178 ex-employees. Of those, roughly 70 went directly to Rivian from Tesla. The lawsuit also states 13 Rivian recruiters are former Tesla employees, and as such would have intimate knowledge of the sort of information the company possesses.
To date, Rivian has raised nearly $6 billion from companies like Amazon, Ford and T. Rowe Price to produce its own R1T pickup and R1S vehicles by 2021. It is also responsible to build 100,000 electric delivery vans for Amazon on its “skateboard” platform. At this point, it’s unclear whether the court will grant Tesla a trial, and what consequences may come about for Rivian as a result.
In its efforts to “vigorously” protect its confidential and proprietary information, as it says in this lawsuit, Tesla has sued former employees and companies in the past for allegedly stealing trade secrets. Per the Bloomberg report, those companies include Chinese firm Xpeng Motors and California-based Zoox, Inc. Zoox is now under a merger agreement to become an Amazon subsidiary, as of June 2020.
