Tesla Sues Autonomous Driving Startup Zoox & Chinese EV Startup XPENG for Trade Secret Theft

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【Summary】On Wednesday, Tesla Inc. sued former employees of both Zoox and Xiaopeng Motors, accusing them of trade secrets theft related to autonomous vehicle technology. The pair of lawsuits was filed in U.S. District Court of Northern California in San Jose.

FutureCar Staff    Apr 27, 2019 12:00 PM PT
Tesla Sues Autonomous Driving Startup Zoox & Chinese EV Startup XPENG for Trade Secret Theft
A Zoox test vehicle operating in San Francisco.

Tech companies in Silicon Valley frequently poach engineers and other employees from other startups to gain an edge on their competitors, especially in the competitive space of self-driving cars. For example, last summer Silicon Valley-based autonomous driving startup Zoox made headlines when it poached 17 engineers from Apple's secretive ‘Project Titan' autonomous car project.

Now Zoox finds itself being sued by Tesla Inc. for the theft of trade secrets. China-based EV startup Xiaopeng Motors  (XPeng) was also hit with a seperate suit for IP theft.

Zoox is working on self-driving car technology that is expected to be used for autonomous shuttle service. The startup is building its own bi-directional autonomous vehicle for its service.

According to the Silicon Valley Business Journal, Tesla alleges in one of the suits that former employees Scott Turner, Sydney Cooper, Christian Dement, and Craig Emigh — "absconded with select proprietary Tesla documents useful to their new employer, and at least one of them used Tesla's confidential information to target other Tesla employees for hiring by Zoox."

Tesla declined to comment on the lawsuit.

Tesla accused the four Zoox employees of taking information related to its "WARP" system, Tesla's internal software it uses to manage its manufacturing, warehousing, inventory, distribution and transportation.

"These materials and knowhow were developed by Tesla over many years, and at great expense," the lawsuit says.

In August 2018, Zoox dismissed its Chief Executive Officer and co-founder Tim Kentley-Klay, just a month after announcing $500 million in new funding. In January, Zoox announced it hired former Intel Corp. Chief Strategy Officer Aicha Evans.

The other lawsuit names XPeng employee Guangzhi Cao, a former member of Tesla's Autopilot team and one of only about 40 people said to have access to the software's source code. Tesla said that Cao quit "abruptly" announced on Jan. 3 to take a job at Xpeng. The company is based in China, but has a Silicon Valley office that employs around 100 people.

Tesla accuses Cao of moving more than 300,000 files and directories related to Autopilot and deleting 120,000 files off his work computer after taking the job at XPeng. Like most automakers, the EV startup is developing its own autonomous driving technology.

"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," Tesla wrote in the filing.


The Xpeng G3 electric SUV

Xiaopeng Motors, also known as XPeng, announced a partnership with chipmaker Nvidia at the annual GPU Technology Conference in San Jose this week—to jointly develop autonomous driving technology for use on roads in China.

XPENG released the following statement today regarding the lawsuit:

"XMotors (XPeng) fully respects any third-party's intellectual property rights and confidential information. The company has been complying and will comply all applicable laws and regulations. The company has initiated an internal investigation into this matter. XMotors 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. XMotors was not aware of any alleged misconduct by Mr. Cao."

XPeng recently unveiled its new electric G3 SUV, and will debut its new electric sedan at the Shanghai Auto Show in April.

The electric automaker is backed by Chinese e-commerce giant Alibaba and others. In August 2018, Xpeng announced it raised 4 billion yuan ($587 million) in its latest fundraising round, valuing the electric car startup at nearly 25 billion yuan.

XPeng said it raised more than 10 billion yuan from investors so far, including the fundraising round in January. The latest round was led by Alibaba Group Holding Ltd and Foxconn Technology Co Ltd.

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