As readily apparent from our blog posts, we are huge electric car enthusiasts. As patent attorneys and engineers, we are fascinated by the incredible innovation embodied in the electric vehicles. While the traditional automotive industry became predictably dull and boring, Tesla entered the scene as the ultimate disrupter. Tesla’s unwillingness to accept the status quo paid off: in less than a decade after launching its first mass-produced vehicle, Tesla became the most valuable car company in the world. An achievement that is nothing short of remarkable.
Tesla vs. Rivian: the battle for top talent
Success attracts competition. Following Tesla’s astronomic rise to the top, a number of electric vehicle startups emerged. The most viable and interesting Tesla competitor is an electric pickup truck company Rivian.
Rivian has a decent patent portfolio, working prototypes of its electric truck, and has secured funding from Amazon and Ford. The last missing ingredient: talent. Because the electric car segment is relatively new, there is a shortage of experienced professionals in this field. Rivian’s solution to this problem–poach Tesla’s employees. To date, Tesla identified 178 ex-employees now working for Rivian. Needless to say, Tesla is not happy.
Here’s how Tesla characterized the poaching situation: “Rivian is a small startup company seeking to enter the electric vehicle market. Tesla is the world’s leading manufacturer of electric vehicles. Unsurprisingly, Rivian recruits heavily from Tesla’s ranks, which, when done fairly, Tesla respects as legitimate competitive conduct.”
Trade secret theft
Last week, Tesla sued Rivian alleging that Rivian encouraged the poached Tesla’s employees to steal confidential information from Tesla. The following is a direct quote from Tesla’s complaint:
“Rivian is knowingly encouraging the misappropriation of Tesla’s trade secret, confidential, and proprietary information by Tesla employees that Rivian hires. In about the past week, Tesla has discovered a disturbing pattern of employees who are departing for Rivian surreptitiously stealing Tesla trade secret, confidential, and proprietary information–information that is especially useful for a startup electric vehicle company. And Rivian encourages those thefts even though Rivian is well aware of Tesla employee’s confidentiality obligations.”
Interestingly, Tesla’s lawsuit does not concern Tesla’s technological trade secrets. Instead, the lawsuit focuses on the stolen employee recruitment and compensation information, including “base pay rates, target bonuses, new hire equity awards, and incentive-based compensation numbers.” Tesla believes that Rivian intends to use this highly-sensitive information to poach even more Tesla employees. Considering that 13 of Rivian’s talent recruiters previously worked at Tesla, Tesla’s concern appears substantiated.
It is worth noting that Rivian is heavily funded by Amazon, and this is not the first time Elon Musk speaks out against Jeff Bezos’s talent-poaching antics. Tesla and SpaceX CEO previously accused Jeff Bezos’s rocket company Blue Origins of shamelessly stealing SpaceX’s engineers and even publicly called Jeff Bezos a “copycat.” We will be closely monitoring this litigation and will write a follow-up on any interesting developments.