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Self Driving Car Startup Admits to Trade Secret Theft, Settles With Tesla

by Chris Brook on Thursday April 16, 2020

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The startup acknowledged that former Tesla employees had possession of Tesla documents relating to shipping, receiving, and warehouse procedures despite leaving the company.

Just as the company suspected, some of Tesla's former employees did steal confidential documents when they left the company and joined a competitor last year.

Tesla made those concerns known in March 2019 when the popular electric vehicle manufacturer filed a lawsuit against Zoox, a self-driving startup also headquartered in California. In the suit, Tesla alleged that four ex-Tesla employees misappropriated trade secrets like receiving and inventory procedures, internal schematics and line drawings of warehouse, and documents relating to the company's HR policies, before joining Zoox.

Zoox, which was the first company permitted to actually transport people in vehicles in California, is purportedly working on a bidirectional, electric, self-driving commercial robotaxi service.

Tesla was assuredly vindicated this week when Zoox confirmed that those ex-Tesla employees were indeed in possession of Tesla documents when they joined Zoox in Spring 2019.

“Zoox acknowledges that certain of its new hires from Tesla were in possession of Tesla documents pertaining to shipping, receiving, and warehouse procedures when they joined Zoox’s logistics team, and Zoox regrets the actions of those employees,” the company said via a brief press release on Tuesday.

As a result, the company is settling the lawsuit Tesla launched last year, and claims it will pay the company an undisclosed amount, and perform an audit to verify that none of its employees retained or are using Tesla's confidential information.

According to last year’s lawsuit, some of the confidential information pertained to WARP, a software platform the company uses to manage its manufacturing, warehousing, inventory, distribution, transportation, and implementation systems.

The employees also sent data to themselves via email, including information on a “Service Campaign” relating to its Falcon Wing doors for its Model X vehicle, confidential parts pricing information, inventory control procedures, a document on the company's standards for workplace safety and efficiency, and internal schematics and line drawings of physical layouts of Tesla warehouses.

While Tesla's employees knew the information they misappropriated was trade secret information and non-disclosure agreements in place designed to prevent the exfiltration of it, it doesn't appear there were any mechanisms in place to stop it from happening. In the lawsuit the company said that it forbids employees from sending confidential information to unauthorized third parties, "and even to employees' own personal email addresses," but that the stipulation is conveyed to employees via a written reminder, not via a form of technology.

Lawsuits in Silicon Valley are nothing new but in the self-driving car technology field, things have certainly intensified over the last several years. As more and more companies race to get their vehicles on the road, they've had to keep pace in the court rooms to keep their valuable intellectual property under wraps.

Tags:  IP theft

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