It’s no secret that Rivian hired former Tesla employees. Those employees are bound by a nondisclosure agreement (NDA) with their former employer. This agreement and the defining parameters have led to Tesla filing a lawsuit against Rivian, claiming the fledgling EV automaker stole trade secrets.
Is this a second Tesla lawsuit against Rivian?
Some might think this is the second time Tesla has taken legal action against Rivian, but it’s actually a continuation of the original suit filed in July 2020. Although that suit began in the summer of 2020, it wasn’t until March 2021 that the California Superior Court denied Rivian’s request for dismissal.
This denial gave Tesla the ammunition required to file an amended complaint in September of 2021 to expand the lawsuit beyond trade secrets to include highly proprietary and confidential battery technology.
Was this added compliant the nail Tesla needed to put Rivian in a coffin?
Although the court allowed the amended complaint, the court agreed that Tesla had failed to offer any supporting facts, bringing plausible reasons for Rivian to deny the complaint. After this, Rivian went on the offensive.
The following month, in October 2021, Rivian turned the tables on this lawsuit with Tesla by filing a motion to identify the trade secrets. It seems the NDAs signed by former Tesla employees are extremely broad, sweeping, and not specific. The Rivian complaint requires Tesla to specify these trade secrets, including the so-called proprietary and confidential battery technology.
Rivian continued to play offense against Tesla in this lawsuit
Although the lawsuit didn’t hit Tesla or Rivian news levels for public consumption for nearly a year, Rivian continued on the offensive by filing a motion in October 2022 requiring Tesla to reveal any information related to the specificity of the complaints Tesla initially filed. It appears Rivian believes Tesla pursued this lawsuit without evidence of stolen trade secrets. The Discovery Referee granted Rivian’s motions.
As covered by Imeri Rogers LLP, Rivian was bolstered by the granting of these motions and filed a Motion for Protective Order against Tesla on December 2, 2022. If this motion is granted and Tesla can’t produce specifics regarding stolen or protected information, Rivian might be done with this lawsuit brought on by Tesla.
Is Rivian a threat to Tesla?
These two electric vehicle automakers have followed similar paths, but Tesla has been the more successful. Rivian focuses on building adventure vehicles, while Tesla is mostly concerned with passenger models. Rivian has a large investment from Amazon to deliver thousands of delivery vans. Additionally, the company recently entered a partnership with Mercedes-Benz to build electric delivery vans in Europe.
Is Rivian in trouble?
This EV startup could be in trouble. However, many of these new companies burn through billions in cash during the first few years of operation. Rivian cut its initial production target of 50,000 EVs for 2022 to 25,000 and still fell short of this number. Rivian and Tesla are direct competitors as American EV automakers. That said, they still must face the legacy names of Ford and General Motors.
If this lawsuit between Tesla and Rivian is put in the rearview mirror, the newest startup could become a successful company with a strong lineup of EVs. That said, Rivian faces more troubles than we see on the surface. Check out the video below to learn more about this startup company’s challenges.