Tesla Sues Supplier For Stealing $1 Billion Battery Secrets

Tesla has initiated a lawsuit against one of its suppliers, Matthews International, for allegedly leaking its valuable battery technology trade secrets. The lawsuit, filed on Friday in California and first reported by Reuters, centers around Tesla’s innovative dry-electrode battery manufacturing process, a technique that significantly reduces cost, energy consumption, and production cycle time.

“This case relates to a technology at the very heart of Tesla’s business, which is its world-leading battery technology,” the lawsuit states. Tesla claims that Matthews International, based in Pittsburgh, shared confidential information about this process with competitors, causing the company “irreparable harm in lost business opportunities” and estimating damages exceeding $1 billion.

“The claims stated in this threadbare complaint are utterly without merit and we intend to vigorously defend the matter,” said Matthews International in response to these accusations. The business claims that none of the specific trade secrets that Tesla claims Matthews was given are included in the complaint.

Furthermore, according to Tesla’s lawsuit, Matthews filed patents for its exclusive technology, which amounted to “unauthorized theft and conversion.” The worry is that Tesla’s private information could be revealed by these patent applications that are available online. Tesla has been making an effort to obstruct or postpone the release of the impacted applications in response.

Tesla asserts that Matthews gained access to the proprietary information through frequent meetings, video calls, and emails. The lawsuit names Matthews’ CTO Gregory Babe as a primary conduit of the information. Tesla claims Babe and other Matthews employees had agreed to maintain confidentiality, but Matthews allegedly betrayed that trust.

Matthews, however, contends that it began developing the disputed technology “over 25 years ago, before Tesla even existed as a company.” Matthews states that this long-standing expertise was the reason Tesla approached them to become a supplier in 2019. Tesla further alleges that Matthews shared the technology with competitors by selling dry-electrode battery manufacturing equipment, which embodied Tesla’s trade secrets, a claim Matthews firmly denies.

The lawsuit, citing the federal Defend Trade Secrets Act, seeks to compel Matthews to hand over its patent applications and pay monetary damages. Matthews counters that Tesla’s legal action is an attempt to “bully Matthews and improperly take Matthews’ valuable intellectual property,” despite continuing to work with Tesla as a supplier.

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