After Tesla’s Win Case Against Rivian To Go To Trial
Tesla, in a lawsuit filed July 17, 2020, accused Rivian of stealing its trade secrets. In the lawsuit, Tesla claims Rivian tried to misappropriate Tesla’s trade secret and confidential and proprietary information by recruiting Tesla employees and encouraging them to take copies of proprietary files as they leave Tesla.
In addition to Rivian, Tesla named four ex-Tesla employees who later went on to work at Rivian as defendants. Tesla also said the company’s security investigators have uncovered three additional employees similarly taking Tesla’s confidential information as they left for Rivian.
The four individuals named in the lawsuit are Kim Wong, Tami Pascale, Carrington Bradley, and Jessica Siron. Kim Wong worked at Tesla as Staff Recruiter until she left to work for Rivian. Tesla claims Wong was contacted by Vince Duran at Rivian, who had been her manager when he was at Tesla. Duran recruited Wong to join Rivian.
Related news: Tesla Giga Texas To Cost Only 400 Million According To Leaked Internal Documents
Before wong left Tesla, the lawsuit claims, Duran instructed her that Rivian did not have the recruiting templates, structures, formulas, or documents that would be needed for Rivian’s recruitment efforts. Such information and documents, as Wong admitted, would be particularly useful for Rivian as a start-up that was currently building a sales force.
On July 7, 2020, after her conversation with Duran and the same day that Wong received an update on her background check by Rivian, she sent at least sixteen highly confidential and trade secret recruiting documents from Tesla’s network to her Gmail account, including various guides and templates developed by Tesla.
And Tesla says the files she took are the very types of documents that Duran had instructed her that Rivian needed.
The information Wong took from Tesla according to the lawsuit included highly sensitive details regarding Tesla’s high-volume recruiting process, providing a roadmap for recruiting and building out a large manufacturing or vehicle service workforce. And Tesla says the files Wong took were marked Proprietary and Confidential Business Information.
As for Tami Pascale Tesla alleges a day after Pascale received and signed an offer letter from Rivian, Pascale took at least ten confidential and proprietary documents from Tesla’s network.
Related news: Tesla Raises Red Logo on Giga Berlin's Wall
According to Tesla, the files include trade secrets, confidential and proprietary information related to Tesla recruiting, including candidate lists, Tesla recruiting organizational charts, information about Tesla recruiters, companies from which Tesla sources candidates, and additional Tesla forms and Templates.
Tesla claims Pascale is still in possession of her Tesla-issued laptop even though the company has asked her to return it. Also, Tesla alleges Pascale even though initially denied taking any Tesla files she later confessed when confronted with specific documents by Tesla security personnel.
Tesla similarly accuses Jesica Siron and Carnigton Bradley of taking Tesla’s confidential files soon after accepting a position at Rivian.
According to the lawsuit Tesla claims, Jesica Siron took proprietary information regarding manufacturing project management, controls specification for manufacturing equipment, specifications for manufacturing equipment, specifications regarding manufacturing robotics, and manufacturing equipment requirements.
Related news: Tesla and Toyota Are Considering Jointly Developing a Small Electric SUV Platform
Siron worked at Tesla as Environmental Health and Safety Manager. As a result, Tesla asserts she had no reason to access specifications of manufacturing equipment and robotics. Unless that is if she was planning to pass the information to someone at Rivian.
Given the above facts, Tesla accuses the defendants including Rivian to be in violation of The Uniform Trade Secrets Act, Breach of Contract, and Intentional Interference With Contracts. And Tesla asked in the lawsuit for a jury trial.
In its response, Rivian’s attornies filed a demurrer alleging, even if the court was to believe all of Tesla’s assertions it still doesn’t state sufficient facts to constitute a cause of action. Rivian also asserted Intentional Interference with Contracts falls under Tesla’s first accusation of violation of the uniform trade secret act.
Rivian’s reasoning was in order to claim trade secret misappropriation the Tesla must show the defendant acquired, disclosed, or used the plaintiff’s trade secret through improper means and it was damaged by the defendants’ actions.
Related news: Rivian Enters The Auto Industry With the Best EV Warranty In America
And Rivian claims in its lawsuit Tesla failed to show Rivian acquired, disclosed, or used the plaintiff’s trade secret through improper means. Rivian says Tesla only alleges the individuals copied Tesla’s proprietary file to their personal emails and Tesla doesn’t show any evidence Rivian has received any of these files.
And for why Tesla filed the lawsuit, Rivian claims their main reason is Tesla sees the genuine excitement, not only for Rivian’s electric vehicles but for the culture and ethos Rivian has meticulously built over the last decade.
As a result, Tesla sees a strong competitor steadily building momentum. And instead of embracing the growth of competition, Tesla resorts to asserting baseless, harmful allegations and purposefully mischaracterizing facts solely to attempt to stop the growth of competition through the disparagement of Rivian and Tesla’s own former employees.
Rivian further states Tesla did not file this case to defend or protect any legitimate intellectual property rights. Instead, Rivian says Tesla sued in an improper and malicious attempt to stop Rivian’s momentum and attempt to damage Rivian’s brand. And it sued in an abusive attempt to scare employees thinking about leaving Tesla.
After weighing the facts the court decided Tesla can move forward with its lawsuit claiming that Rivian stole its trade secrets with the help of former employees of Tesla.
Related news: Tesla Hopes to End Quarter One Strong
However, the judge agreed with Rivian to dismiss Tesla’s Intentional Interference of a Contract claim, saying the violation of trade secrets part covered it.
There is a chance Tesla and Rivian could still settle this issue out of court. However, if the lawsuit goes to a trial it’s surely going to cause a rift in the electric vehicle world.
So what do you think? In your opinion did Rivian do anything wrong? Or do you believe, as Rivian seems to do, there is no connection between the employees taking proprietary information as they left Tesla and the same employees joining Rivian? Let me know your thoughts down in the comments below.
For more information check out: Elon Musk Says Tesla Could Be Bigger Than Apple - Here Is How Also, see Elon Musk In A Call With Employees Said Tesla Will Produce 1 Million Cars in 2021
Tinsae Aregay has been following Tesla and The evolution of the EV space on a daily basis for several years. He covers everything about Tesla from the cars to Elon Musk, the energy business, and autonomy. Follow Tinsae on Twitter at @TinsaeAregay for daily Tesla news.