A federal judge in California on Wednesday rejected a request from US electric vehicle giant Tesla Motors to access grand jury materials related to a former Apple employee charged with stealing trade secrets before joining Chinese electric vehicle maker Xpeng Motors.
Why it matters: The ruling is the latest chapter in the legal battle between Tesla and an employee of Xpeng, a Chinese company that has been involved in two protracted legal disputes in the US over trade secrets.
- Tesla in mid-January subpoenaed XMotors, Xpeng’s US business unit, in bid to gather evidence in its civil lawsuit against Cao Guangzhi, a former Autopilot engineer and now Xpeng employee charged with misusing Tesla’s intellectual property for the benefit of his new employer.
- Tesla requested access to a wide array of materials such as the entire repository of Xpeng’s autonomous-driving source code and clones of its senior executives’ hard drives.
- The US EV giant also sought court records related to a criminal charge against former Apple employee Zhang Xiaolang for stealing trade secrets while switching jobs and joining Xpeng in May 2018. Xpeng terminated Zhang’s employment after the criminal charges were filed.
Details: US District Court Judge Vince Chhabria on Wednesday denied Tesla’s request to access grand jury materials related to Zhang and information related to Zhang’s conduct, saying the relevance of those materials to Tesla’s claims against Cao was “speculative and tenuous.”
- “Discovery of this information is not proportional to the needs of this case at this time, especially given the potential for interference with an ongoing criminal prosecution, a concern raised by the US Attorney,” Chhabria wrote.
- Xpeng also does not need to provide images of the work computers of several executives including CEO He Xiaopeng and president Brian Gu since they are employed by its Chinese operation Xiaopeng Motors, rather than by XMotors.
- However, the Chinese EV startup must produce its self-driving source code and related log files as requested by Tesla, which requested those dated from November 2018 through the present. Cao joined XMotors in January 2019 and was placed on leave when the investigation began two months later.
- The two companies will discuss using a neutral third party to review the source code from both companies.
- “The ruling highlights Tesla’s gamesmanship and use of discovery as an improper measure to stop with its competitor from competing successfully in the self-driving industry,” Xpeng said in an announcement.
- Tesla did not respond to request for a comment.
Context: Alibaba and Xiaomi-backed Xpeng is running at full tilt to produce and deliver on time the carmaker’s first electric P7 sedan, a model in direct competition with Tesla’s made-in-China Model 3 with assisted driver functions including highway lane-changing and valet parking.
- The Guangzhou-based EV maker last month was granted a government license to produce cars in a revamped plant which it previously acquired from a local automaker in the southern Guangdong province.
- Delivery of its P7 cars is scheduled for late June but the latest version of its advanced driver assistance system Xpilot will be available in the fourth quarter of this year, the company said.