Published on July 23rd, 2020 | by Steve Hanley0
Tesla Cries Foul, Sues Rivian For Stealing Employees & Trade Secrets
July 23rd, 2020 by Steve Hanley
Tesla says Rivian is poaching its employees, some of whom may be sharing proprietary information with the rival company. In a lawsuit filed this week in California, Tesla says it is Rivian’s “number one target from which to acquire information.” (Remember when it used to say the same thing about Apple?) It claims Rivian has hired 178 ex-Tesla employees, and that about 70 of them joined Rivian directly after leaving Tesla, according to a report by Automotive News.
In its complaint, Tesla says, “Misappropriating Tesla’s competitively useful confidential information when leaving Tesla for a new employer is obviously wrong and risky. One would engage in that behavior only for an important benefit — to use it to serve the competitive interests of a new employer.”
Let’s unpack that language. Tesla isn’t saying it can prove any of its former employees actually brought sensitive information to their new employer. It is suggesting a court could look at the stream of people flowing away from Tesla and landing at Rivian and draw only one conclusion. In the arcane world of the law, this is known as the doctrine of res ipsa loquitur — the thing speaks for itself. In any suit, the plaintiff has the burden of proving its case, but if it can get a court to accept the res ipsa loquitur doctrine, the burden of proof then shifts to the defendant.
Here’s an example: A buys a widget from B. The widget explodes, amputating three of A’s fingers. Under classical tort law, A would have to prove that the widget was defective in order to recover damages against B. But A can plead res ipsa loquitor and force B to prove its product was not defective. It’s a neat trick and highly effective in many personal injury cases. Tesla is hoping to pull the res ipsa loquitur rabbit out of its hat in this case and put the burden on Rivian to disprove what Tesla alleges to be true.
For its part, Rivian feels its honor has been impugned and will vigorously defend itself against Tesla’s scurrilous accusations. This seems like one of those situations where neither side will score a clear victory and the only winners will be the lawyers, who could spin this out for years while the clock on their billable hours ticks.
In its response to the suit, Rivian said in an email that it requires all new employees to confirm “that they have not, and will not, introduce former employers’ intellectual property into Rivian systems. Rivian is made up of high performing, mission driven teams and our business model and technology are based on many years of engineering, design and strategy development. This requires the contribution and know-how of thousands of employees from across the technology and automotive spaces. We admire Tesla for its leadership in resetting expectations of what an electric car can be.” Its statement goes on to say the Tesla lawsuit has no basis in fact and is “counter to Rivian’s culture, ethos and corporate policies.”
A Spate Of Law Suits
Recently, Tesla has accused a former employee of downloading the company’s Autopilot source code and bringing it to his new employer, Xpeng. That suit is still pending. Previously, Tesla sued Sterling Anderson, former head of its Autopilot program, who left to start his own autonomous driving startup. That suit has been resolved. Last year, Tesla sued 4 former employees who turned up at autonomous driving startup Zoox, accusing them of using proprietary information gleaned from their time at Tesla to help their new employer. That suit has also been resolved more or less amicably.
Tesla has been on the receiving end of such lawsuits, such as one brought by Nikola Motor Company accusing Tesla of ripping off its design for a new class of electric semi-tractor and using it for the Tesla Semi. That matter is still pending.
A litigious culture is now part of Big Tech at all levels. Waymo successfully sued a former member of its autonomous driving team when he went to Uber after downloading reams of proprietary data. Uber claimed it never used any of that information and ended up firing the offender, Anthony Levandowski.
There are fortunes to be made in ride-hailing/autonomous-driving technology, and the temptation to take shortcuts to a massive payday is surely strong. None of this is meant to diminish the fact that industrial espionage is prevalent at all levels of industry. The feeling often is that all’s fair in love, war, and commerce. Do it to them before they do it to you.
Suits like the one Tesla has filed against Rivian are really about laying down a marker in the industrial espionage game — this is how far we can be pushed, and no further. A lot of talented engineers are moving from company to company. Their brains cannot be scrubbed of any knowledge they acquired while working at Company A before moving to Company B (and later to Company C, F, and Q.) That makes quite a challenge for industry leaders like Tesla. It’s not easy being King of the Mountain.
It is likely Tesla and Rivian will reach an agreed upon solution to this situation just as soon as all the legal niceties have been observed, the appropriate words entered into the court record, and all ruffled feathers smoothed down. Then everyone can get back to the important work of moving the EV revolution forward.
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