Tesla sues Rivian alleging trade secret theft by former employees

Daniel Fowler
July 27, 2020

Tesla filed lawsuit against electric vehicle rival Rivian, which is preparing to launch its pair of electric vehicles in 2021, claiming the up-and-coming EV maker is violating the law to get a leg up. "Both Rivian and the employee knew full well that taking such information would violate the employee's [NDA] obligations to Tesla", the suit reads.

According to Tesla's official complaint, the company has accused Rivian of specifically targeting and recruiting its employees, encouraging them to gather " highly sensitive, trade secret information that would give Rivian a huge competitive advantage" before they leave. Tesla is also investigating at least two more possible suspects.

"Misappropriating Tesla's competitively useful confidential information when leaving Tesla for a new employer is obviously wrong and risky", Tesla said in the complaint against Rivian and the four employees. In an action for unfair competition, the electric vehicle pioneer accuses the rivals of an "alarming pattern" to the enticement of employees, to access confidential information. The company has also issued a statement, stating: "Upon joining Rivian, we require all employees to confirm that they have not, and will not, introduce former employers' intellectual property into Rivian systems".

However, Rivian, which claims Ford Motor Co., Amazon and global investment management firms like BlackRock Inc. among its top-level investors, denied the accusations. "This suit's allegations are baseless and run counter to Rivian's culture, ethos and corporate policies". "This requires the contribution and know-how of thousands of employees from across the technology and automotive spaces".

Tesla filed a lawsuit against electric vehicle automaker Rivian and four former employers, on allegations of poaching talent and stealing trade secrets.

Rivian, based in MI, is one of the most well-funded startups and is backed by Amazon, Ford Motor Co. and T. Rowe Price and others.

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"We admire Tesla for its leadership in resetting expectations of what an electric auto can be", the company said in a statement. Rivian plans to start production on the R1T pickup and R1S SUV by mid-2021. The trucks are created to be rugged and are capable of handling off-road driving highway cruising.

The electric truck maker is following Tesla's lead in challenging US rivals General Motors and Ford, as well as Tesla in the electric pickup and SUV segment. In fact, it was just yesterday that Elon Musk announced that the Cybertruck will be built at the company's second USA facility in Austin Texas. Ford now dominates the pickup truck segment in the U.S.

Rivian said in May that deliveries of the R1T and R1S would be pushed to 2021.

Rivian was founded in 2009 by R.J. Scaringe, a Massachusetts Institute of Technology graduate with a doctorate in mechanical engineering.

The company clarified that the R1T will reach customers by June next year, while R1S reservation holders will have to wait until August. One employee was even accused of retaining a company laptop. Tesla previous year accused Zoox, a self-driving vehicle startup, and several former employees of allegedly stealing company information. All six people are now employed at Rivian.

The court proceedings between Xpeng and Tesla are ongoing. The factory was where Mitsubishi in a joint venture with Chrysler Corporation called Diamond-Star Motors produced the Mitsubishi Eclipse, Plymouth Laser and Dodge Avenger, among others. Another EV startup Workhorse, purchased GM's Lordstown, Ohio factory, which the automaker closed a year ago. The company also recently denied reports that it's planning to move its headquarters to Silicon Valley. It is recognized as Tesla Inc. v. Rivian Automotive Inc., case number 20CV368472.

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