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Electric Vehicle Manufacturers Spar Over Trade Secret Case

by Chris Brook on Thursday August 20, 2020

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Two of the country’s biggest electric vehicle manufacturers continue to dispute the particulars of a lawsuit involving poaching talent and stealing trade secrets.

Two electric vehicle manufacturers continue to go back and forth around a lawsuit that contends one stole trade secrets from the other.

While not a household name, one company, Rivian Automotive, which makes electric SUVs and pickups, is asking a judge to dismiss a lawsuit filed against the company by competitor Tesla.

Tesla sued the Michigan-based company earlier this summer, alleging that it poached its employees and encouraged one employee to steal trade secrets. In the suit, Tesla said that roughly 70 people have left the company for Rivian, 22 of them in the last four months.

While Tesla doesn't sell trucks and SUVs like Rivian, it claims it has over 500,000 reservations for its Cybertruck, a pickup truck it plans to roll out in 2021 and that Tesla is "Rivian's number one target from which to acquire information, including trade secret, confidential, and proprietary information.”

In a complaint from July, Tesla claims that thirteen of Rivian’s recruiters are former Tesla employees, all are "familiar with Tesla's several agreements, policies, and practices that forbid Tesla employees, including former employees, from disclosing Tesla's confidential and proprietary information to Tesla's competitors and other third parties.” That hasn’t stopped them from taking the company’s data, Tesla alleges.

On his or her way out the door, Tesla claims at least one ex-employee took highly sensitive trade secret compensation and bonus information for Tesla sales personnel for use at Rivian—including base pay rates, target bonuses, new hire equity awards, and incentive-based compensation numbers."

Two other employees took a variety of files, including candidate lists, Tesla recruiting organizational charts, information about Tesla recruiters, and companies from which Tesla sources candidates… manufacturing project management, controls specifications for manufacturing equipment, specifications regarding manufacturing robots, and manufacturing equipment requirements.

Rivian last week asked a judge in the California Superior Court in Santa Clara to dismiss the suit, claiming that two of the three claims fail to state sufficient allegations of trade secret theft. Instead, Rivian claims, the suit is an attempt to damage its reputation and make recruiting more troublesome for the company.

Attorneys for Rivian filed a notice of demurrer - formally objecting to two of Tesla's claims - last Monday.

“Tesla did not file this case to defend or protect any legitimate intellectual property rights,” Rivian said in its motion. “Tesla sued in an improper and malicious attempt to slow Rivian’s momentum and attempt to damage Rivian’s brand.”

The company also said it has “rigorous policies and procedures to make sure it does not obtain confidential information from other companies when on-boarding employees" and that no Tesla trade secrets have been found at any of its operations.

Tesla has shown before that it does not hesitate to defend its trade secrets.

It has an ongoing lawsuit against ex-employee Martin Tripp stemming from the theft of several gigabytes of confidential trade secret information; Tripp later claimed to be a whistleblower decrying the business' security and safety. Earlier this year, Zoox, another self-driving company, settled with the company after acknowledging some of its employees who previously worked at Tesla were in possession of Tesla files when they joined the company.

Tags: IP theft

Chris Brook

Chris Brook is the editor of Data Insider. He is a technology journalist with a decade of experience writing about information security, hackers, and privacy. Chris has attended many infosec conferences and has interviewed hackers and security researchers. Prior to joining Digital Guardian he helped launch Threatpost, an independent news site which is a leading source of information about IT and business security for hundreds of thousands of professionals worldwide.