After Emigh joined Zoox, Tesla says he mistakenly sent an email to Cooper’s old Tesla address, with a modified version of a proprietary Tesla document attached. The document was “freshly-emblazoned with the Zoox logo,” Tesla claims, but it still featured hallmarks of the original version, which the automaker says shows “without doubt, that the Defendants are actively using the Tesla information they stole.”

I defer to your legal background, but this seems like extremely poor judgement and that it would make the case harder for Zoox.

[edit: the linked article has changed substantially since I first read it. I quoted the article as it was at the time of my commenting, and it had much more details around the XPeng allegations involving iCloud and similar incidents with Apple/FBI investigations]

The issue though is that Tesla has to show that Zoox is actually using that information in its products or processes. It's possible--even likely--that they'll be able to do so with respect to the Autopilot secrets (I didn't address that in my comment edit: since that was a separate lawsuit from the one against Zoox) but with respect to the logistics secrets there's a snowball's chance in hell that Zoox modeled any of their logistics after Tesla's processes.

So sure, their logistics are a mess in general, but if they had a great idea for, I dunno, shipping-based rolling warehouse allocation or something, and Zoox got caught doing the same thing, it's game over.

But that's not the world we live in. Tesla posted their lawsuit online, and the details are available all over.

From the Verge, on the Zoox lawsuit:

The employees allegedly made off with information related to what Tesla calls its “WARP” system, a proprietary software platform the company built to collectively manage things like manufacturing, warehousing, inventory, distribution, and transportation. “These materials and knowhow were developed by Tesla over many years, and at great expense,” the company’s lawyers write. (WARP was described by multiple former employees to CNBC last year as “seemingly never complete,” which made it hard to keep track of budgets.)

The company claims that Turner, who was a manager at a Tesla distribution center, sent confidential documents containing information about the company’s receiving and inventory procedures, along with “internal schematics and line drawings of the physical layouts of certain Tesla warehouses” to his personal email address with the words “you sly dog you...” Turner allegedly sent another document to his personal email later that same day with a note that said: “Ooooh man... so much time and effort. Loved every second of it though,” according to Tesla.

Zoox hasn't started building anything yet. It's still in the prototype stage. It's possible that Zoox would have used this information if it got to the point of actually building a car (but see Faraday Future for an example of optimistic thinking). But Tesla would need to show that Zoox used a proprietary system for managing inventory, warehousing, etc., instead of the many platforms available on the market, most of which appear to function better than Tesla's in-house system. Tesla would alternatively need to show that Zoox used the layouts of Tesla's warehouses in designing its own.

It's the same issue that Waymo ran into with Uber: whatever the former employee may have done, the new employer isn't liable for anything if they don't actually use that misappropriated information.

Didn't the Waymo-Uber suit end up with Uber settling by paying a quarter billion dollars (in equity, but still)? Doesn't seem like Waymo ran into any fatal liability barriers.

Yep. They did.

In fairness, though, Waymo did run into difficulties during the litigation in respect of tying the misappropriated documentation to Uber itself, though.

I don't think the difficulty was fatal, but I don't think either side was looking forward to a long and protracted discovery fight to prove the point while Cruise et al. were sitting on the sidelines sniping secrets.

Rephrased your argument is:

1. Tesla has to show that Zoox is using or used the information.

2. The above point only likely if Tesla's logistics processes are valuable.

3. We know know that they are not valuable because Tesla has had trouble keeping its supply chain optimized.

I take the most amount of issue with #3, but also with #2. That they have trouble shipping whole cars on time does not prove to me that some sub-process of their manufacturing isn't well run or novel. Quite the opposite, really, since they're much more likely to have found alternate approaches since they were building lines from scratch and, thus, not tied to the old ways of solving things. That they're failing to ship on schedule is normal for operations at that size for the first time.

But even leaving aside #3, I still think #2 presumes a level of understanding at Zoox that I don't necessarily think is fair to assume. It may have taken Zoox time to realize that the Tesla approach was wasteful, but that doesn't excuse them from using stolen IP.

Zoox isn't even to the point of making a product yet--its still in the prototyping stage, and Tesla accused it of stealing logistics IP related to supply chain management and storage. So Tesla can't show them of #1 (using the IP) because Zoox simply isn't in the position of being able to use the IP.

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

> (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

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.

If A and B were pharmaceuticals and I know A secretly wasted 20b on a compound that B is considering to test, maybe this is a trade secret that I should be careful divulging.

My intuition is that there is a line between "taking professional skills with you" and "trade secret".

[1] - https://www.chicagotribune.com/classified/automotive/ct-tesl...

[2] - https://forums.tesla.com/forum/forums/tesla-replacement-part...

What do you mean by this? They seem to be hitting their delivery targets despite incredibly (and unpredictably) high demand.

I think we have different ideas of "hitting their delivery targets" since Tesla has missed nearly every delivery target they've ever set for themselves...not just for the Model 3 but for the S and X as well. For the Model 3, theses misses are despite having a known number of customers years in advance of actually manufacturing the car.

Tesla has also had repeated issues delivering their cars to customers. And getting exported cars out of port (one of the most straightforward logistics functions a manufacturing company can manage). They still can't get replacement parts to many of their existing customers. These are all basic logistics failures that almost every other manufacturing company (carmakers and otherwise) has no problem handling.

Tesla's car designs and brand IP are currently very valuable. They're also not the subject of these lawsuits...

The "shitshow" standard is not the standard a court uses regarding IP theft/misappropriation. I'm in enough IP legal battles to know that dumber stuff has been valid in courts.

Hypothetically, what if their supply chain issues are caused by dogmatically following a flawed and proprietary supply chain algorithm?

If their rival did indeed steal and use the algo, does it matter if it's flawed, for the purposes of a suit?

(Ex: maybe they decided it's easier to prove use of the flawed algo than some of the crown jewels for whatever reason)

My point about the value of Tesla's logistics IP is that it doesn't make sense for anyone to use it because it's not valuable: Tesla has messed up on the basic logistics enough times that its clear they're not very good at logistics.

All the mistakes in the world don't matter if the final outcome is a good one. Elon Musk has already been pretty public about some of the mistakes they made and what they learned from them, is it really inconceivable that they learned from those mistakes and are on their way toward a well working logistics system?

Clearly they aren't the best in the world with this stuff, but to say that they have nothing of value at all seems over the top.

I thought Tesla brought manufacturing in house to simplify their logistics.

Why companies are still using engineers from China to work on trade secrets is beyond me. Even if they start off clean, they can be easily persuaded to steal by the Chinese companies or government.

The reason, of course, is so that the baby can be born in the US and thereby obtain the full rights of US citizenship.

So some of these Chinese engineers you speak of may be American born US citizens, although they’re wholly raised in and possibly completely loyal to China. The sad thing is that considering the culture someone was raised in (which seems possibly fair, though I’m not 100% certain it’s defensible) comes indistinguishably close to considering race (absolutely not fair in any way). The societal dialog exploring this distinction is fraught to the point that I am uncomfortable even making this comment, and I doubt HR departments are prepared to encode policies that are so perilous.

One escape hatch would be the US security clearance system, which is no doubt allowed to take many factors into account. But that wouldn’t apply here.