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Tesla takes aim at Aussie-founded competitor Zoox, suing former employees for “blatant and intentional” trade secrets theft

Stephanie Palmer-Derrien /

Elon Musk

Elon Musk, co-founder and chief executive officer of Tesla Inc., speaks during an unveiling event for the Boring Co. Hawthorne test tunnel in Hawthorne, California. Source: AP/Robyn Beck.

Tesla is suing Aussie-founded self-driving car rival Zoox, and five former employees, over an alleged theft of proprietary information and trade secrets.

Tesla, headed up by controversial entrepreneur Elon Musk, filed two lawsuits in a US District Court in Northern California.

One is filed against Zoox, founded by Australian Tim Kentley-Klay, along with four former Tesla employees who left to join the competitor. The other is filed against a single former employee, Guangzhi Cao.

The Zoox suit alleges that four former Tesla employees stole information “to help Zoox leapfrog past years of work”.

The defendants, Scott Turner, Sydney Cooper, Christian Dement and Craig Emogh “absconded with select proprietary Tesla documents useful to their new employer”, the complaint says.

“At least one of them used Tesla’s confidential information to target other Tesla employees for hiring by Zoox,” it alleges.

“In the process, they misappropriated Tesla’s trade secrets, violated their agreements with Tesla, and breached their duties of loyalty, all with the knowledge and support of Zoox.”

Tesla calls the alleged theft “blatant and intentional”.

In the summary of the action, the listed company alleges that Turner, who was formerly a manager in the Tesla network, emailed two confidential documents to his personal email, with the body of the email containing only the words “you sly dog you…”.

Dement is also accused of sending confidential documents to his personal email address, while Emigh is implicated in another alleged email blunder.

“After defendant Emigh joined Zoox, he mistakenly sent an email to Cooper’s old Tesla email address, attaching 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 – showing, without doubt, that the defendants are actively using the Tesla information they stole,” the complaint claims.

Tesla is also suing former employee Guangzhi Cao, who left the company for Xiaopeng Motors Technology Company, or XMotors, a Chinese self-driving car competitor.

This complaint alleges Cao uploaded more than 300,000 files and directories to his personal iCloud account.

“When he left, Cao did not return Tesla’s highly confidential information, nor disclose that he had made copies,” it says.

“Tesla thus believes that Cao still has, can access at will, and may be using all the source code needed to replicate Tesla’s proprietary autopilot technology, none of which he has a legal right to possess.”

Tesla chief Elon Musk is no stranger to legal action. Earlier this month, a group of Tesla investors took the entrepreneur to court, in a bid to reduce his “unchecked” use of Twitter.

Last year, Musk stepped down as chairman of Tesla, and paid a $20 million fine to the SEC after tweeting about plans to take Tesla private.

The SEC then sought to hold him in contempt after he allegedly breached that agreement, speculating Tesla would produce 500,000 cars in 2019.

It’s also not the first controversy for Zoox. Founded in 2012, the startup operated in stealth mode until it raised $US500 million ($677 million) in its Series B round last year, backed by Atlassian co-founder Mike Cannon-Brookes and Aussie VC Blackbird.

However, in August, Aussie founder Kentley-Klay was fired “without a warning, cause or right of reply”, he said in a tweet.

He called the ousting “Silicon Valley up to its worst tricks”, claiming it “sells the story that it backs founders to create real change”.

In January, former Intel executive Aicha Evans was appointed as new chief executive.

StartupSmart contacted Zoox, but did not receive a comment prior to publication.

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Stephanie Palmer-Derrien

Stephanie Palmer-Derrien is the editor at StartupSmart. You can contact her at [email protected].

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