Tesla accuses former employees of stealing trade secrets

On Behalf of | Apr 4, 2019 | Intellectual Property |

As several companies rush to develop successful self-driving car technology, the competition has become fierce and at times, contentious. Recent lawsuits, including Tesla’s lawsuit against four former employees and the start-up company Zoox, prove these companies’ commitments to safeguard critical proprietary information.

The lawsuit, filed in a U.S. District Court in Northern California, alleges that four former employees obtained select proprietary information and trade secrets from Tesla to pass on to their new employer, Zoox. The company even learned of two of the former employees emailing themselves key Tesla documents from work email addresses.

The race to lead the self-driving car movement

Companies like Tesla, Waymo, Uber and more have long communicated their efforts and goals in developing self-driving car technology. Several companies have even begun testing their technology in select cities or obtained permits to do so across California.

However, the technology is likely still years away from hitting the consumer market. With such a race to lead the autonomous vehicle market, keeping information out of the hands of competitors is paramount. As such, Tesla has filed similar lawsuits both in 2017 and recently against a Chinese start-up company.

Leapfrogging past years of work

In its lawsuit, Tesla alleges that the actions of the four former employees helped Zoox to “leapfrog” past years of work. In such a competitive field, such an advantage could prove to be dangerously detrimental for others. Tesla also accuses the four former employees of violating their non-disclosure agreements. These agreements required them to maintain the confidentiality of all Tesla information and to refrain from poaching Tesla employees for one year after leaving the company.

Protecting trade secrets

Trade secrets differentiate companies from their competitors. California-based companies enjoy comprehensive protection under the California Uniform Trade Secrets Act (UTSA), which allows for the protection of both valuable trade secrets and more mundane items like customer lists or meeting minutes. Unfortunately for employers, some of the greatest risks to these secrets can come from inside the company itself.

This case enhances the need for ironclad employment agreements, particularly in such competitive industries. However, companies can only do so much to ensure both current and former employees stay true to such agreements. Having a plan in place to swiftly address breaches can assist companies in reacting appropriately when a threat arises.

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