The rise in trade secrets litigation in the electric vehicle (“EV”) sector continues with Tesla filing another lawsuit: this time against its own equipment supplier. On June 14, 2024, Tesla filed a complaint in the Northern District of California against Matthews International Corp. for trade secret misappropriation, along with breach of contract and unfair business practices. The electric vehicle giant alleges that Matthews exploited Tesla’s proprietary dry electrode battery information by incorporating that confidential information into Matthews’ own patent filings and distributing that information to Tesla’s competitors.

Tesla’s complaint highlights the importance of its dry electrode battery development, describing it as “the very heart of Tesla’s business.” In fact, Tesla has manufactured over 50 million battery cells using this proprietary technology, as reported in the complaint.

Tesla and Matthews began their relationship in 2019 when Matthews began supplying equipment that Tesla used in its dry electrode battery manufacturing process. During the course of their relationship, Tesla purportedly gave Matthews access to confidential information regarding that manufacturing process and Matthews “agreed, in writing, that it would hold those secrets in the strictest confidence.” But, according to the complaint, Matthews used that information to pursue its own patent applications, resulting in publication of Tesla’s trade secrets. Additionally, Tesla alleges Matthews sold dry electrode battery equipment—which included proprietary information—to Tesla’s competitors.

Tesla is seeking a preliminary and permanent injunction to prevent Matthews from continuing to use its trade secrets and for a transfer in ownership of all of Matthews’ patent applications pertaining to Tesla’s trade secrets. Tesla also seeks monetary damages in accordance with its claims. 

In a press release issued after the complaint was filed, Matthews denied any wrongdoing and noted that Tesla failed to identify with particularity the trade secrets it alleges Matthews misappropriated.

Tesla’s lawsuit underscores the critical importance of safeguarding intellectual property in the fiercely competitive automotive industry. It demonstrates EV companies’ willingness to legally enforce their trade secrets in this competitive field. Companies like Tesla continue to address intellectual property violations relating to EV manufacturing and development technology. For companies confronting misappropriation of their trade secrets or defending against such claims in the EV or technology sectors, Proskauer’s extensive legal and technical expertise, combined with a multidisciplinary approach, can enhance the likelihood of achieving favorable and effective resolutions to complex trade secret intellectual property disputes.

Posted in EV Trade Secrets Litigation Series, Trade Secrets
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Photo of Baldassare Vinti Baldassare Vinti

Baldassare (“Baldo”) Vinti heads Proskauer’s Intellectual Property Litigation Group.

Baldo’s practice focuses on litigating patent, false advertising, trade secret, life sciences, trademark and contractual matters in federal and state courts and before the International Trade Commission. He is a seasoned trial attorney responsible…

Baldassare (“Baldo”) Vinti heads Proskauer’s Intellectual Property Litigation Group.

Baldo’s practice focuses on litigating patent, false advertising, trade secret, life sciences, trademark and contractual matters in federal and state courts and before the International Trade Commission. He is a seasoned trial attorney responsible for all aspects of litigation, including Markman hearings, appeals before the Federal Circuit, case preparation and strategy, depositions, motion practice, and settlement negotiations. He has represented clients in high-stakes matters involving a broad range of technologies, including medical devices, diagnostics, immunoassays, prosthetics, pharmaceuticals, dental implants, electronic medical records systems, encryption technology, wound dressings, digital video compression, electronic book delivery and security systems, mobile media technologies, navigation and location-based services, bandwidth management, bar code scanning, lasers , and other technologies. Baldo has represented numerous major corporations, including Arkema S.A., British Telecommunications PLC, Church & Dwight Co., Inc., Henry Schein, Inc., Maidenform Brands Inc., Mitsubishi Electric Corp., Ossur North America Inc., Panasonic Corp., Sony Corp., Welch Foods, Inc., and Zenith Electronics LLC.

In addition, Baldo regularly handles transactional work, including intellectual property due diligence, licensing, intellectual property structural transactions, patentability studies, infringement/non-infringement opinions, and client counseling in intellectual property matters.

Baldo is an author and frequent commentator on patent issues pertaining to medical devices and a host of other intellectual property topics, and has been quoted in the National Law Journal, Bloomberg BNA, Law360, Westlaw Journal and Inside Counsel magazine. He is also a regular contributor of articles published in Medical Product Outsourcing magazine that deal with the medical device industry.

Baldo served as a judicial intern for Hon. John E. Sprizzo of the United States District Court for the Southern District of New York and for Hon. Charles A. LaTorella of the New York Supreme Court.

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Photo of Elizabeth Shrieves Elizabeth Shrieves

Elizabeth (Beth) Shrieves is an associate in the Litigation Department and a member of the Intellectual Property and Patent Law groups. Beth has experience litigating in numerous federal district courts across the United States, as well as before the Federal Circuit, U.S. Patent…

Elizabeth (Beth) Shrieves is an associate in the Litigation Department and a member of the Intellectual Property and Patent Law groups. Beth has experience litigating in numerous federal district courts across the United States, as well as before the Federal Circuit, U.S. Patent and Trademark Office, and International Trade Commission. Beth’s experience covers a wide variety of products and technology involving software and applications, medical devices and technology, electrical hardware, telecommunications, supercapacitors, automotive engines, weapon systems, and consumer products. She has counseled clients throughout all stages of litigation, including both plaintiff and defense work, from pre-suit investigation, initial pleadings, discovery, trial, and through appeal.

Beth graduated from George Mason University School of Law where she earned her J.D., Magna Cum Laude. Prior to earning her law degree, she received a bachelor’s degree from Wake Forest University where she also graduated Magna Cum Laude. Beth also previously worked as a paralegal where she gained a deeper understanding of the nuances of commercial litigation.

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