Tesla files lawsuits against ex-employees for stealing trade secrets

Tesla is suing five former employees for stealing trade secrets in what looks like ridiculously obvious fashion. 

On Wednesday evening, Tesla filed two lawsuits against former employees and the self-driving startup Zoox, as spotted by The Verge. In the first case, it accuses four ex-employees of porting over “proprietary information and trade secrets” to Zoox. And in the second, it accuses one employee of stealing Tesla’s Autopilot source code, and bringing it over to Xiaopeng Motors (XPeng).

The theft, according to Tesla, was “blatant and intentional.” From the filings, it certainly seems that way.

The information Tesla is accusing its former employees of taking to Zoox includes proprietary knowledge about its manufacturing, warehousing, inventory, distribution, and transportation systems, including its “WARP” software platform.

One defendant, Scott Turner, reportedly sent documents to his personal email, writing “you sly dog you…” in the body of the email. Another defendant, Christian Dement, sent an email with four confidential Tesla documents to his personal account with the subject line “Good Stuff.” 

Most damning of all, defendant Craig Demigh accidentally sent an email to defendant Sydney Cooper’s former Tesla account, when he meant to send it to his new Zoox account. The document contained an attachment with a “modified version of a Tesla proprietary document, freshly-emblazoned with the Zoox logo, yet still bearing the layout, design, and other vestiges of the Tesla version.” The lawsuit argues that this blunder clearly shows that the former employees are actively using the information they decided to take with them.

“These materials and knowhow were developed by Tesla over many years, and at great expense,” the lawsuit reads. “Tesla’s proprietary information and trade secrets [helps] Zoox leapfrog past years of work needed to develop and run its own warehousing, logistics, and inventory control operations.”

In the second lawsuit, Tesla accuses the now head of perception at XPeng, Guangzhi Cao, of stealing Tesla’s AI source code in order to bring it over to XPeng. Cao was a member of Tesla’s “elite” Autopilot team, and was one of only about 40 people with access to the source code.

“Tesla restricts the neural network source code most stringently: currently, only about 40 people have access to this source code, which is granted on a strict ‘need-to-know’ basis,” the suit reads.

Unlike his Zoox counterparts, Cao apparently attempted to be somewhat stealthy. The suit alleges that Cao began looking for a new job in November and had already received an offer from XPeng in December. During that time, Cao uploaded the highly confidential source code to his iCloud account. He then spent the remaining month scrubbing evidence of this, by disconnecting his iCloud account, and directly accessing Tesla’s secure servers to erase his activity history. 

“Tesla has spent hundreds of millions of dollars and more than five years developing Autopilot,” the lawsuit reads. “Now that investment is at risk.”

In both cases, Tesla is seeking the return of the proprietary information, knowledge about what the companies were doing with it, and damages that result from the alleged theft. 

Trade secrets are a hot button issue, especially in the autonomous vehicle world. Tesla, Waymo, and other companies are in a race to bring a commercially viable product that consumers are comfortable with to market. That’s led to competitors fighting dirty. In 2017, former employees of bringing trade secrets over to their new self-driving business, Aurora. Waymo accused a former employee of bringing its self-driving trade secrets to Uber in 2016 in a case that was settled out of court two years later. And XPeng has been of stealing AI trade secrets from Apple before. 

Sometimes, however, Tesla’s legal actions have come off as vindictive and paranoid. In June 2018, Elon Musk reportedly led a campaign to bring down a Tesla whistleblower using spying, intimidation, and a $167 million lawsuit.

The latest lawsuits against the former Tesla employees appear to be a different story. If the allegations of the clumsy emails and cover-ups are true, the defendants may have made their own bed — with Elon Musk as an adversary.

You can see the full text of both lawsuits below.