In March 2019 Tesla motors Inc. sues few of their ex-employees for alleged trade secret theft. Tesla has filed two of such cases against their former employees who went to work at self-driving vehicle start-up ZOOX & Chinese EV automaker Xiapeng motors.
In one of the above two cases Tesla alleges former employee Mr.Cao, who worked on company’s Autopilot driving assistance feature, stole source code before abruptly quitting and taking a job in Xiapeng motors.
Autopilot system is one of the USP of the Tesla vehicles. On Jan 2019, CEO Elon musk told in a tweet that Tesla will roll out “Tesla Sentry Mode” for all their cars with enhanced Auto Pilot System.
Xiapeng motors is a company which is inspired by Tesla motors and they designed their vehicles in and around Tesla’s open source patents and in many instances has imitated Tesla’s design, technology and even its business models. Xiapeng motors features Auto pilot like feature called as X-pilot & employs at least five of Tesla’s former Autopilot employees, including Mr.Cao.
X motors Code named E28 Tesla model 3 rival
Tesla says it has “spent hundreds of millions of dollars” and more than five years developing Autopilot system & claims Cao’s action has put that investment in risk. This is like putting the investors’ money into risk.
Is there a Law in US to trial this Trade secret misappropriation case?
Yes, DTSA – The Defense of Trade Secret Act.
In US, traditionally trade secret litigation was dealt by “Uniform trade secret act (UTSA)” which was in use for more than 30 years. 48 out of 50 states in US have passed some versions of UTSA (barring Newyork and Massachusetts). The Defense of Trade Secret Act of 2016 (“DTSA”) makes a major shift in trade secret litigation.
On May 11, 2016 president Obama signed the DTSA into law. The DTSA is intended to provide a “single national standard for trade secret misappropriation with clear rules and predictability for everyone involved.”
What’s new in DTSA , some complicated trade secret misappropriation case which never involved hacking or sophisticated computer crimes, but rather employees emailing company information to themselves (or others) or downloading information to drives are dealt with.
Earlier Alphabet Inc’s Waymo self-driving vehicle unit sued Uber Technologies after an ex-employee stole thousands of confidential documents and became chief of Uber’s self-driving car project. Uber later paid $245 million to settle the case. One of the biggest trade secret trials ever unexpectedly settled after just four days of an anticipated two-week trial.
“India has no specific trade secrets law, Indian courts have upheld trade secrets protection under various statutes, including contract law, copyright law, the principles of equity and – at times – the common law action of breach of confidence (which in effect amounts to a breach of contractual obligation). Section 72 of the Information Technology Act 2000 also provides certain protection, although this is limited to electronic records”.
Whether inside India or abroad the trade secrets can be the prime importance to prevent business demise. One of the biggest trade secrets in the world is coca cola. Hence companies especially startups must take reasonable precautions in order to protect the trade secret.
References:
[1]https://techcrunch.com/2019/03/21/tesla-sues-former-employees-zoox-for-alleged-trade-secret-theft/
Business Management 