On Wednesday night, Tesla sued four former employees and the self-driving startup Zoox for misappropriation of trade secrets. No, you're not having driverless-car lawsuit déjà vu—you're just remembering the time last year when Waymo and Uber settled their own trade secrets case after four days of trial.
Tesla’s suit, filed in the Northern California federal district court, alleges that four of its former employees took proprietary information related to “warehousing, logistics, and inventory control operations” when they left the electric automaker, and later, while working for Zoox, used that proprietary information to improve its technology and operations.
Tesla says the former employees—Scott Turner, Sydney Cooper, Chrisian Dement, and Craig Emigh—worked in product distribution and warehouse supervising. It alleges they forwarded the trade secrets to their own personal email accounts, or the accounts of other former Tesla employees. “You sly dog you …” Turner allegedly wrote in the body of an email he sent himself, attaching “confidential and proprietary Tesla receiving and inventory procedures, as well as internal schematics and line drawings of the physical layouts of certain Tesla warehouses,” the company's lawyers write in their complaint.
Tesla alleges other documents taken by the Zoox employees include confidential parts pricing information; a Tesla “service campaign” relating to the Model X’s gull-wing doors; and details about the automaker’s “WARP” system, which Tesla describes as proprietary software that helps it track and document inventory as it moves in and out of warehouses and distribution systems. In one particularly goofy alleged blooper, Tesla says Emigh took one of its proprietary documents, “emblazoned” the Zoox logo on it, and sent it to Cooper, another one of the former Tesla employees—but to Cooper’s old Tesla email, not his Zoox one.
Though Tesla’s court filing does not present any evidence showing Zoox had knowledge of the alleged trade secret theft, the electric car company’s lawyers write that the Zoox “knew or should have known under the circumstances that the information misappropriated was trade secret information.”
Trade secrets cases can be complex. Legally, the definition of a trade secret is nebulous: It’s a “formula, pattern, compilation, program, device, method, technique, or process” kept confidential inside a company. But to prove that what the former employees allegedly took was a trade secret, and not just sensitive information, a plaintiff like Tesla would have to prove that it tried very hard to keep them strictly confidential. It would have to prove that the secrets could not be obtained by any other, more kosher processes, like reverse-engineering. And it would have to prove that the information saved Zoox significant amounts of money, time, or labor. Tesla would not, however, have to prove that Zoox knew what its employees were doing; the law makes the company responsible for its employees’ actions.
Zoox declined to comment on the lawsuit. The Foster City, California-based company is unique among driverless vehicle startups: It wants to build and operate its own network of driverless vehicles, and do that by the end of 2020. And those vehicles, Zoox has promised, won’t look like your conventional car. They will be built from the ground up to be totally driverless, with no steering wheel, pedals, or even a front. Instead, Zoox execs have pledged, the vehicle will be “bidirectional”—which means it would be able to move in two directions without turning. Bloomberg reported this week that the company has plans to raise more than $645 million in preparation for its 2020 service launch.
In a proposed summons filed Wednesday, Tesla suggested the court give Zoox and the four former employees 21 days to respond to its lawsuit.
That wasn’t the Tesla legal team’s only intellectual property lawsuit this week. In a separate suit filed in Northern California on Thursday, the automaker also sued a former employee and Autopilot engineer named Guangzhi Cao. The company alleges that, before leaving Tesla in January, Cao uploaded more than 300,000 files and directories, as well as copies of Tesla source code repositories, to a personal cloud storage account. Cao is now an employee of Chinese Tesla rival Xiaopeng Motors Technology Co., or XMotors.ai, which is also seeking to build electric, self-driving tech, including an Autopilot-like feature called X-Pilot.“Needless to say, Tesla’s confidential information is not safe in the hands of XMotors or its employees,” Tesla writes in the suit.
In a statement, XMotors.ai's communications director Marie Cheung said company "was not aware of any alleged misconduct by Mr. Cao," and had opened an internal investigation into the matter. The initial conference for that lawsuit is set for mid-June.
Updated 3-22-19, 3:25 pm EST: This story has been updated with a statement from XMotors.ai.