Tesla sues Matthews International for $1 Billion over alleged trade secret theft in battery technology

Tesla has filed a lawsuit against Matthews International Corporation in the U.S. District Court for the Northern District of California, accusing the Pittsburgh-based supplier of misappropriating trade secrets related to Tesla’s dry electrode battery manufacturing technology.

Tesla is seeking damages exceeding $1 billion, alleging that Matthews improperly shared its proprietary information with its competitors.

In the lawsuit, filed on June 14, 2024 and first reported by Reuters, Tesla claims that Matthews, a supplier since 2019, breached multiple non-disclosure agreements by disclosing confidential details about Tesla’s dry electrode coating technology. This technology is key for Tesla’s 4680 battery cells, designed to reduce the size, cost, and production cycle time of battery plants while increasing energy density and power.

Tesla alleges that Matthews exploited its access to this confidential information, using it to file patent applications and sell related technologies to unnamed competitors. The lawsuit accuses Matthews of claiming Tesla’s innovations as its own and incorporating these trade secrets into their machinery and patent filings without authorization.

Tesla’s complaint also includes multiple counts of trade secret misappropriation under both federal and California state law, breach of contract, and unfair competition. The automaker is not only seeking monetary damages but also a court order to prevent Matthews from further using or disclosing its trade secrets.

In the filed documents, Tesla outlines how Matthews’ Chief Technology Officer, Gregory Babe, and other employees made repeated trips to Tesla’s California facilities. During these visits, they allegedly gained access to Tesla’s most confidential trade secrets, which they later misused.

Tesla claims that this unauthorized use and disclosure have caused and continue to cause significant harm to its competitive position in the EV market.

In a statement released on Monday, Matthews International dismissed the lawsuit as a baseless attempt by Tesla to coerce the company and unlawfully appropriate its intellectual property. Matthews pledged to defend itself against the allegations, saying it has not violated any agreements or misappropriated any trade secrets.

You can read the full lawsuit below.

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