Tesla, Rivian Could Clash In California Court Over Trade Secrets Issue: What You Need To Know

Zinger Key Points
  • Tesla filed a lawsuit in 2020 alleging some of its former employees who joined Rivian passed on some trade secrets.
  • This amounted to violation of non-disclosure agreements the company signed with its ex-employees, it said.

Tesla, Inc. TSLA and Rivian Automotive, Inc. RIVN could face off in a California court over the former's lawsuit, alleging some of the latter’s employees violated non-disclosure agreements.

What Happened: A California state court on Wednesday tentatively denied requests by the employees for a summary adjudication ruling, Bloomberg reported.

A summary adjudication would have allowed the resolution of specific issues in a case without going through a full trial. This follows a request by a party to rule on a particular issue(s) that are vital in the dispute.

The case was filed by Tesla in 2020 and the Elon Musk-led company alleged that Rivian hired a batch of former Tesla employees, who in turn passed on to the startup documents comprising "highly sensitive trade secret, confidential, and proprietary engineering information."

Tesla expanded the lawsuit in 2021, claiming that Rivian stole core technology related to its next-gen batteries. Rivian, meanwhile, had denied any wrongdoing.

See Also: Best Electric Vehicle Stocks

What's Next: If the ruling is finalized, Tesla's lawsuit would proceed to a trial, pitting Tesla against Rivian, which is gradually transforming into a potent threat in the electric vehicle arena.

The development comes about two weeks after the two companies announced a partnership, which provides for Rivian to adopt the North American Charging Standard pioneered by Tesla. 

Rivian has pushed ahead from the crowded EV startup field and has been successful with production ramp-up and manufacturing efficiency.

In premarket trading on Thursday, Tesla was trading flat at $254.05 and Rivian fell 0.85% to $25.69, according to Benzinga Pro data.

Read next: Should Tesla Buy This Ride-Sharing Giant To Supercharge Robotaxi Dreams? Analyst Explains Why It Makes Sense

Photo by Tada Images on Shutterstock

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: EquitiesNewsLegalTop StoriesTechMediaelectric vehiclesElon MuskEVsmobility
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!