Tesla sues former engineers for alleged theft of trade secrets

Tesla filed two lawsuits late on Wednesday against multiple former employees and the self-driving startup Zoox for allegedly misappropriating the company’s trade secrets.

The Silicon Valley automaker claims that four former employees stole “proprietary information and trade secrets to help Zoox leapfrog past years of work needed to develop and run its own warehousing, logistics, and inventory control operations.”

Tesla also claims in a separate case that a former employee stole source code related to the company’s Autopilot driver assistance feature before taking a job at Chinese electric automaker Xiaopeng Motors, or XPeng.

Tesla says the four former employees who went to Zoox — Scott Turner, Sydney Cooper, Christian Dement, and Craigh Emigh — “absconded with select proprietary Tesla documents useful to their new employer,” and that at least one used confidential information to poach other employees. Tesla says the group’s alleged theft was “blatant and intentional.”

The employees allegedly made off with information related to what Tesla calls its “WARP” system, a proprietary software platform the company built to collectively manage things like manufacturing, warehousing, inventory, distribution, and transportation. “These materials and knowhow were developed by Tesla over many years, and at great expense,” the company’s lawyers write. (WARP was described by multiple former employees to CNBC last year as “seemingly never complete,” which made it hard to keep track of budgets.)

The company claims that Turner, who was a manager at a Tesla distribution center, sent confidential documents containing information about the company’s receiving and inventory procedures, along with “internal schematics and line drawings of the physical layouts of certain Tesla warehouses” to his personal email address with the words “you sly dog you…” Turner allegedly sent another document to his personal email later that same day with a note that said: “Ooooh man… so much time and effort. Loved every second of it though,” according to Tesla.

Turner recruited Cooper and Dement after leaving for Zoox, Tesla claims, and he also provided the startup with “the names of at least four other Tesla employees” and “insights about their pay structure at Tesla.” Tesla claims Dement, a former warehouse supervisor, also sent four confidential documents from his work to his personal email with the subject “Good Stuff.” The company also alleges that Cooper admitted she had sent confidential documents to Turner and Zoox before she resigned from Tesla.

After Emigh joined Zoox, Tesla says he mistakenly sent an email to Cooper’s old Tesla address, with a modified version of a proprietary Tesla document attached. The document was “freshly-emblazoned with the Zoox logo,” Tesla claims, but it still featured hallmarks of the original version, which the automaker says shows “without doubt, that the Defendants are actively using the Tesla information they stole.”

None of the documents Tesla mentions in the suit have been entered into the record yet. Zoox, Emigh, and Cooper did not immediately respond to comment. Dement and Turner could not be reached for comment. Tesla declined to comment beyond the lawsuits.

The other lawsuit filed on Wednesday is against Guangzhi Cao, who was a member of Tesla’s Autopilot team and one of only about 40 people with access to the software’s source code. Tesla says Cao “abruptly” announced he was quitting on January 3rd, and the company later learned he had taken a job with XPeng, which is a Chinese startup that recently released its first all-electric SUV that’s been described as a “Tesla clone” because parts of it are allegedly built using Tesla’s open-source patents.

XPeng also reportedly tried to hire a former member of Apple’s secretive self-driving project last summer who wound up being charged by the FBI with trade secret theft.

Tesla says that last year, Cao started uploading “complete copies of Tesla’s Autopilot-related source code” to his iCloud account. The company claims he ultimately moved more than 300,000 files and directories related to Autopilot. After accepting a job with XPeng at the end of last year, Tesla says Cao deleted 120,000 files off his work computer and disconnected his personal iCloud account, and then “repeatedly logged into Tesla’s secure networks” to clear his browser history before his last day with the company. Tesla also claims Cao recruited another Autopilot employee to XPeng in February.

“Absent immediate relief, Tesla believes Cao and his new employer, [XPeng], will continue to have unfettered access to Tesla’s marquee technology, the product of more than five years’ work and over hundreds of millions of dollars of investment, which they have no legal right to possess,” the company’s lawyers write.

In an email to The Verge, XPeng says it “fully respects any third-party’s intellectual property rights and confidential information,” and that the company has opened an internal investigation into the allegations. XPeng says it “has by no means caused or attempted to cause Mr. Cao to misappropriate trade secrets, confidential and proprietary information of Tesla, whether such allegations by Tesla being true or not,” and that it “was not aware of any alleged misconduct by Mr. Cao.”