
Tesla sues former employees for allegedly stealing data, Autopilot source code - Element_
https://www.reuters.com/article/us-tesla-lawsuit/tesla-sues-former-employees-for-allegedly-stealing-data-autopilot-source-code-idUSKCN1R21P9
======
gamblor956
Tesla is suing former employees for stealing its logistics (warehousing,
inventory control, etc.) trade secrets.

Tesla has to show that Zoox is using the information the employees allegedly
stole. In a nutshell, Tesla would have to show similarities between its
logistics processes and Zoox's.
([https://www.fenwick.com/FenwickDocuments/Trade_Secrets_Prote...](https://www.fenwick.com/FenwickDocuments/Trade_Secrets_Protection.pdf)
for a good summary)

But given the shitshow that is Tesla's logistics , that's extremely unlikely,
as Tesla's logistics processes simply aren't valuable IP. Tesla has displayed
a chronic inability to manage their own supply chain, especially during the
period the employees were at Tesla. If anything, Zoox used the information
allegedly taken from Tesla as an example of what _not_ to do logistically, and
trade secrets law doesn't let you sue for that.

EDIT: To clarify: there are 2 lawsuits in the article. One is against an
employee for stealing trade secrets, which doesn't require proof that his new
employer is using the secrets. That lawsuit doesn't involve Zoox. The other
lawsuit is against Zoox and former Tesla employees for using Tesla's trade
secrets. I'm only referring to the one against Zoox. It's pretty clear that
the secrets were misappropriated, so the real question is whether those
secrets are actually being used.

~~~
sigmar
>If anything, Zoox used the information allegedly taken from Tesla as an
example of what not to do logistically, and trade secrets law doesn't let you
sue for that.

Any other lawyer want to sound off on if this is right? Because it doesn't
seem right. If I'm using stolen trade secrets to decide what not to do, I'm
still making very good use of that information.

Edit: added "other" to first sentence since original commenter is a lawyer

~~~
elliekelly
Also an attorney and I read the statute differently than parent comment. The
Economic Espionage Act[1] criminalizes the misappropriation of information,
not the use of misappropriated information. In relevant part:

> (a) Whoever, with intent to convert a trade secret, that is related to a
> product or service used in or intended for use in interstate or foreign
> commerce, to the economic benefit of anyone other than the owner thereof,
> and intending or knowing that the offense will, injure any owner of that
> trade secret, knowingly—

>> (1) steals, or without authorization appropriates, takes, carries away, or
conceals, or by fraud, artifice, or deception obtains such information; [or]

>> (2) without authorization copies, duplicates, sketches, draws, photographs,
downloads, uploads, alters, destroys, photocopies, replicates, transmits,
delivers, sends, mails, communicates, or conveys such information;

Edit: Just saw parent comment clarified they were discussing Zoox's liability,
not the former employee. In that case, subsection 3 of the above excerpt would
apply:

>> (3) receives, buys, or possesses such information, knowing the same to have
been stolen or appropriated, obtained, or converted without authorization;

I still read the statute a bit differently from parent. Liability doesn't flow
from whether or not the IP was implemented by Zoox but from whether or not
Zoox knew the information was stolen. Tesla will have to prove Zoox intended
to obtain the proprietary information and knew it was stolen.

[1]
[https://www.law.cornell.edu/uscode/text/18/1832](https://www.law.cornell.edu/uscode/text/18/1832)

~~~
ABCLAW
Also also a lawyer. There's a number of civil and criminal sources of
liability triggered by the fact situation.

I think the OP is referring to the requirements for the sources which trigger
'big dollar' litigation remedies.

The Fenwick memo is pretty helpful - it distinguishes between Wrongful Use and
Wrongful Acquisition. Most of the big remedies require Wrongful Use to be
demonstrated.

------
zaroth
I get that it’s fun to beat up on Tesla. We love nothing more than the little
guy winning and the winning guy brought low. Tis the great cycle of life.

However, Tesla is the largest battery manufacturer in the world, and
manufactures their batteries at significantly lower cost, higher performance,
tighter tolerances, and with greater automation than anyone else in the world.

It’s underestimating the difficulty of the problem by far to point to specific
(relatively minor, if not insignificant) failures of Tesla and generalize that
their logistics IP isn’t worth stealing or couldn’t possibly be beneficial to
a competitor.

The gross margins that Tesla has achieved on the Model 3 I believe speaks for
itself as the worlds best at that price point, and that does not come without
a well run supply chain.

There is no question that Tesla _runs hot_. I’d like to see anyone else try
and come close to what they’ve _shipped_ without a fair share of fuckups along
the way.

~~~
gamblor956
_Tesla is the largest battery manufacturer in the world, and manufactures
their batteries at significantly lower cost, higher performance, tighter
tolerances, and with greater automation than anyone else in the world._

Panasonic manufactures the battery cells for Tesla and most of the market.
Tesla assembles the cells into batteries. It would be accurate to say that
Tesla is the largest manufacturer of car batteries, but they are nowhere close
to being the largest battery manufacturer in the world.

 _The gross margins that Tesla has achieved on the Model 3 I believe speaks
for itself as the worlds best at that price point, and that does not come
without a well run supply chain._

We must be talking about a different Model 3. If Tesla had terrific Model 3
gross margins, it wouldn't have needed to (try to) close all of its stores and
eliminate all customer referral incentives just to make the $35k Model 3
possible...in one color and style...with limited options. It's competitors
could have great margins too if they only sold the car in one color, one
style, and no packages, because their economies of scale would absolutely
dwarf Tesla's.

 _I’d like to see anyone else try and come close to what they’ve shipped
without a fair share of fuckups along the way_

Toyota and VW shipped 10 million cars worldwide last year without any
logistics issues. Hell, most companies are able to ship their products without
any controllable logistics issues. Why does Tesla get a pass for failing to do
something that every other manufacturer gets right?

~~~
zepearl
> _in one color_

Why is "black" and not "white" the standard color?

Asking this because I think that black electric cars need in general more air-
conditioning, therefore more energy, have therefore less range than white cars
- based on the belief that it's easier to heat a car than to cool it => if the
previous statements are correct, why is the high-energy-consumption-colour
less expensive than the low-energy-consumption-colour?

~~~
11thEarlOfMar
I wouldn't put it past Elon to be because of Ford's famous edict when ramping
the Model T: "Any customer can have a car painted any color that he wants so
long as it is black."

[https://en.wikiquote.org/wiki/Henry_Ford](https://en.wikiquote.org/wiki/Henry_Ford)

------
mikekchar
I've often joked that the companies I work for should give their source code
to their competitors. By the time the competitors figure it out, our company
will be _so far ahead_ :-)

It _is_ interesting to speculate on the value of source code, though. For
Tesla autopilot I'm more than willing to accept that there is some "secret
sauce" of trade secrets in there that would help out a competitor, but usually
I find that source code contains the most mundane stuff. Most professionals
could write it nearly as fast as they could learn to work with the legacy
systems if they knew what they were building. Instead it's the _requirements_
that are gold. You figure out exactly _what_ needs to be built in a great
amount of detail, then you are at least as well off as having it big ball of
messy logic.

Take note those that want to "steal" a competitor's project: just buy a copy
of the executable and start figuring out exactly what it does ;-)

BTW, as a (on topic) side note, I once had an ex-colleague tell me that they
copied all of the source code for every company they ever worked for -- just
so they could look stuff up. It is not completely implausible that an ex-
employee would copy the code to help their own performance without any
involvement of their new employer.

------
ddoolin
This might be unpopular here, but I kind of wish this and other similar
systems were more open source, or even just shared between companies. If
companies are going to be putting a system out there on the streets anyway,
and Tesla's is comparatively more quality and perhaps thus safer (I'm not
making a claim, just positing a hypothetical), then it would only be to
everyone's benefit if every company didn't have to (often shoddily) reinvent
this wheel every time.

~~~
nwah1
Open source tends to work great for re-implementing technology that is already
understood. It tends not to work for exploratory research, since that requires
risk and ingenuity, not a designed-by-committee approach.

R&D of this sort is funded best with a strong profit motive, unless the
government is willing to shell out for it.

~~~
Lorkki
I'm not sure how that follows. Most big open-source projects are in practice
owned and controlled by a single company/entity, and the processes don't
differ much from what you'd see in-house. What you're describing sounds more
like how standardisation bodies work than the realities of functioning
software projects.

~~~
nwah1
I guess the corporation, in this case, is acting as a benefactor just as the
government would be in other cases.

In order to work on pie in the sky ideas, you need to hire brilliant people
for long periods of time, with low certainty of success. And this is
expensive, and corporations will not generally do this out of the kindness of
their hearts... the stars align sometimes where the private incentives and
public interests are the same.

Xerox PARC, Google X, Bell Labs, and so forth meet this description just as
much as DARPA.

But the traditional direct profit motive is an important piece of the engine
of progress, and relying only on this other incentive structure would cause
stagnation.

------
penny45
I have a unpopular opinion here but I actually think Tesla is a tech company
and has valuable information worth stealing.

~~~
cma
I know software is a different area.. but such valuable secrets they started
building cars in an open tent where the whole line could be videoed from the
street...

~~~
erulabs
This is sort of the exact opposite of patent trolls yeah? A patent troll sits
on a patent doing next-to-nothing in order to hold on to their "extremely
valuable" rights.

Tesla on the other-hand is executing on its patents so hard it doesn't even
have time to try to protect them.

Perhaps their secret is _just doing stuff_, instead of, you know, _not_.

If thats the case, with my experience at San Francisco startups, there is a
very real chance Zoox hasn't stolen the _valuable_ knowledge :P

~~~
cma
Trade secrets are different than patents, you can use patents in open air and
people can't take them, you have to publish the details to get the patent
anyway (in theory). Trade secrets are lost if you exhibit them publicly.

------
winningcontinue
There's an emerging trend with tech companies to sue former individual
employees for theft. It's a departure from the usual practice of suing other
companies who acquire the employee and work on a competing product. The idea
in silicon valley is to intimidate not the person being sued, but all future
employees within your own company who might be thinking of doing the same
thing. It entirely changes the calculus of moving on to another firm when you
know you'd be dealing with litigation for years afterwords. It's a shame
because Silicon Valley was built on former employees leaving their companies
and starting their own firms to innovate.

------
shoo
i think back to [https://www.bloomberg.com/news/features/2019-03-13/when-
elon...](https://www.bloomberg.com/news/features/2019-03-13/when-elon-musk-
tried-to-destroy-tesla-whistleblower-martin-tripp) (previous HN discussion:
[https://news.ycombinator.com/item?id=19378658](https://news.ycombinator.com/item?id=19378658)
)

> Later that day, Tripp heard from the sheriff’s department in Storey County,
> Nev. Tesla’s security department had passed a tip to police. An anonymous
> caller had contacted the company to say Tripp was planning a mass shooting
> at the Gigafactory.

it sounds like there's a reasonably high probability that some one high up at
Telsa arranged for some bullshit report to be made to police claiming an ex-
employee whistleblower was going to go on a shooting spree at the factory. I'd
like to see this bullshit report investigated and prosecuted as attempted-
murder-(by-cop), this behaviour by any employer to any former employee, let
alone a whistleblower, is completely unacceptable. It makes it a bit hard to
take other claims made by the same company about other former employees
seriously given that in some cases the company is observably acting in a very
toxic and fraudulent manner.

~~~
2cukng498
> prosecuted as attempted-murder-(by-cop), this behaviour by any employer to
> any former employee, let alone a whistleblower, is completely unacceptable.

So the only evidence that we have as to whether this anonymous call did or did
not occur is the statements by Tesla alleging that it did, and you choose to
believe that it didn't. Why? I can understand holding Telsa to a higher burden
of proof, - concluding that we don't have enough evidence - but why jump to
claiming it was all made up? Without some evidence indicating it was
fabricated, that sounds like a rather slanderous accusation to make.

~~~
shoo
> did, and you choose to believe that it didn't. Why?

maybe the call was indeed real, but the call was from someone in management at
Telsa, or someone at arms length that they got to do make the call. i agree
this is speculation, if there is evidence that this is the case then whoever
was involved stuffed up pretty badly. maybe i'm completely off the mark. as I
said, i'd like to see it investigated.

Regardless of whether there was actually a call, or who made it, it's
difficult to understand what other motivation any party other than Telsa
trying to suppress a whistleblower would have to chase after the former
employee. again, this is speculation, but i'd bet on it.

------
duxup
It's hard to know what to think of these things with the past strange comments
about "saboteurs" and Elon's own strange legal choices related to the SEC.

Is this real or more of a sort of blame game strange conspiracy theory thing?

~~~
rcMgD2BwE72F
Strange legal choices wrt to the SEC? Just wait for the judge decision: the
SEC is in a clear overreach here, as all the tweets they cited in their filing
are non material.

They even misquoted the tweet to say "500K" instead of " _about_ 500K" and
anyone can add up the previsouly published numbers to conclude the company
should reach a runrate of 500K at the end of the year (Musk tweeted nothing
new, it was already disclosed in the quarterly report).

You'll see.

~~~
gamblor956
The judge will definitely not rule that the SEC is in "clear overreach" since
the 500k tweet is only one of the many tweets they cite in their filing as
evidence that Elon has violated his settlement agreement. The 500k tweet was
just the final straw.

Also, with respect to the "previously published numbers," Tesla provided a
range of 360k to 500k. A large range, indicating significant uncertainty.
Musk's tweet _narrowed_ that range quite drastically to the upper-high end
(i.e., "about 500k"), indicating substantially less uncertainty about Tesla's
capacity. That is materially _new_ information. Moreover, Musk's comment was
that Tesla would _make_ 500k cars in 2019, not make cars at an annualized rate
of 500k/year at the end of the year. He had to correct that tweet with a
followup, but the followup tweet also contained material information: he
narrowed the 2019 delivery estimate of 400k.

Musk is going to face _some_ penalty for violating the settlement agreement.
No one is sure what that will be. He'll probably still be CEO afterward, but
he'll definitely be a few million poorer...and it's likely that Tesla will
also pay another monetary penalty for its failure to uphold its part of the
settlement agreement.

~~~
dd36
Doubtful. The SEC tried to pad its complaint in its reply. That's not an
indication of strength.

~~~
frosted-flakes
What motivation would they have for doing that? Genuinely curious (I don't
care either way).

~~~
dd36
So the complaint is filed then Tesla can provide an answer and the SEC a reply
to that answer. A reply is usually brief and reiterates points made in the
original complaint. Here, however, the SEC introduced new arguments in its
reply. This usually happens because the defendant's answer was strong.
Therefore, the SEC seemingly believed its original complaint was insufficient.
As such, the SEC is at a higher probability of looking bad here.

~~~
techntoke
I swear people think he is in a wrestling match or beauty contest. Musk was in
clear violation of his settlement and if this was a poor person on probation,
they would be thrown back in jail. The only thing keeping Musk safe is his
brand recognition and money to keep fighting in the courts.

~~~
rcMgD2BwE72F
>Musk was in clear violation of his settlement

You didn't read any of the papers submitted to the judge, did you? You gotta
prove that saying "production of about 500" is a material information, when
you already disclosed that production should reach 150+350.

Sure the SEC say that 500 is new to them, although they were already aware of
150+350.

------
xedeon
The amount of vitriol against Tesla here is insane. Just the fact that
incumbent car manufacturers are now seriously considering electric cars after
decades of ignorance because of Tesla is a great win for humanity.

Virtually all tech companies have missteps and Tesla is no exception. Let's
look at the big picture here in what Tesla is trying to do.

We had Solar panels installed with a Tesla powerwall and did home efficiency
improvements and are now pretty much self sufficient (includes charging our
vehicles). Think about that for a second.

Meanwhile. We have Facebook, Google, Netflix, Amazon and even Apple just cater
to our desires for consumerism and endless distraction with some of them even
trampling user privacy. But hey, let's all trash everything about Tesla
because it's the hip thing to do right?

------
eastendguy
Interesting. I thought Baidu and Alibaba are supposed to be leading AI
companies. If so, why would XiaoPeng not partner with them?

------
hiei
I would be curious to see what kind of enterprise resource planning software
Tesla uses in house. I guess I always just figured they used a setup via
Microsoft Dynamics or Oracle.

------
kirillzubovsky
Is there any enterprise software that looks for this behavior inside corp
systems and alerts the admins/management? If someone just goes ahead and
downloads 300k files, that must not be a very normal way of operations,
regardless of your role. Even if there are jobs where one would need to
download so many files, the systems could be alerted with appropriate flags.
What do the big Cos use for this?

------
elliekelly
For anyone curious, TechCrunch posted both complaints on scribd:

[1] [https://www.scribd.com/document/402668366/Tesla-v-
Zoox](https://www.scribd.com/document/402668366/Tesla-v-Zoox)

[2] [https://www.scribd.com/document/402668404/Tesla-vs-
Guangzhi](https://www.scribd.com/document/402668404/Tesla-vs-Guangzhi)

------
JeffL
Isn't that potentially billions of dollars worth of stolen IP? That's not
cool.

------
peteradio
Better be a legit suit otherwise there goes any legitimate engineering
prospects.

------
mattmg83
Reading Bad Blood at the moment and this post immediately made me think of it.
Obviously Tesla has already released products that work etc. and I have no
clue whether who is in the right here but it's not often we have high profile
tech companies suing employees like this.

------
joering2
I think this "lawsuit" is an April fools joke, as Tesla openly open source
everything they work on:

[https://www.tesla.com/blog/all-our-patent-are-belong-
you](https://www.tesla.com/blog/all-our-patent-are-belong-you)

~~~
castratikron
patent != copyright

~~~
HeWhoLurksLate
To add on that, patents require the disclosure of a method in exchange for a
protection of that method. If Tesla applies for a patent, they have _" opened
the source"_ by that action. If Tesla then goes and _open sources_ their
patents, they've essentially said "we don't need protection anymore, feel free
to build this _right now_ instead of in 20 years."

Trade _secrets_ , like how they get their material, some specific PLC code,
code that isn't specifically disclosed, or change orders for specific
mechanisms have _de jure_ copyright and ownership by Tesla. If Tesla decides
not to publish, publicize, or even _share_ documents, someone who shouldn't
have documents but does, as well as the person who violated the copyright
would be in trouble.

------
vabmit
This tactic has been used against companies friends of mine have started. I've
only seen it used by large 20+ year old 1970s/1980s publicly traded companies,
never someone like Tesla. The way it works is basically that you track where
your ex-employees go after they leave. If they go to a competitor/disruptor
start-up with out deep pockets, sue that competitor over trade secrets. It's
nearly impossible to disprove in court. The competitor start-up exhausts its
VC/Angel money on legal fees and goes bankrupt. Potential new customers are
wary of using their tech because of the lawsuit. It's a lethal combination
that ensures that you don't have to out innovate them. Stealing source code is
one thing. I certainly understand suing over that. But, suing over stealing
ideas about warehousing from a car company? Really? I don't see any
justification for that other than a lack of faith in the ability of your own
company to compete and innovate.

Full disclosure: I am shorting TSLA stock. I have worked on autonomous
vehicles and do not believe Tesla's claims about their technology. I expect
Tesla to go bankrupt sometime in the next few years. I'm even more convinced
of this now that I see them using company-killer lawsuits against other
competing start-ups.

~~~
xedeon
> I am shorting TSLA stock

Then you are financially motivated to spew lies. Short sellers are probably
the scummiest people on the planet, that will do anything to make a quick
buck.

Take this for example: [http://www.cc.com/video-clips/rfag2r/the-daily-show-
with-jon...](http://www.cc.com/video-clips/rfag2r/the-daily-show-with-jon-
stewart-exclusive---jim-cramer-extended-interview-pt--2)

> I expect Tesla to go bankrupt sometime in the next few years.

Short sellers have been saying that since 2008 because it serves their
interest. Yet, here we are a full decade later.

~~~
vabmit
The stock isn't doing to well today or Friday. Maybe, just maybe, shitty
people lie about financials and build shitty worthless companies.

