Tesla Doubles since March 18, page-7

MikeCannon-Brookes backed Zoox settles with Tesla after admitting trade secretstheft

A self-driving carstart-up backed by Atlassian co-CEO Mike Cannon-Brookes has settled anintellectual property stand-off with car giant Tesla, with Zoox admitting someof its new employees stole confidential Tesla documents when they came acrossto the company.

The high-stakes battle, which pitted Mr Cannon-Brookes againstfellow technology billionaire and Tesla co-founder and CEO Elon Musk, came asthe red-hot self-driving car industry gathers pace and companies scramble tostay one step ahead of each other.

Zoox, of which Australian tech billionaire Mr Cannon-Brookes isa director and has invested $US100m ($159m) of his own money, admitted onThursday that several of its employees had taken secret documents from Tesla totheir new jobs at Zoox.

Tesla lawyers filed alawsuit in March last year in the Northern California Federal District Courtagainst four former employees and Zoox, alleging the employees stole proprietaryinformation and trade secrets for developing warehousing, logistics andinventory control operations. The suit was settled this week for an undisclosedsum.

“Zoox acknowledges that certain of its new hires from Tesla werein possession of Tesla documents pertaining to shipping, receiving, andwarehouse procedures when they joined Zoox’s logistics team,” a statement fromstart-up said.

Zoox said it “regrets the actions of those employees,” and thatit will also “conduct enhanced confidentiality training to ensure that all Zooxemployees are aware of and respect their confidentiality obligations”.

The settlement also required Zoox to undertake an audit toensure none of its employees had retained or were using Tesla’s confidentialinformation.

Mr Cannon-Brookes declined to comment.

Several companies are racing to develop the technology requiredto make cars drive on their own and lawsuits against former employees arecommon as firms strive to keep proprietary information in-house.

Google’s self-driving arm Waymo settled a similar dispute withridesharing giant Uber in 2018, after Uber employees were accused of stealingGoogle’s self-driving technology. Last month former Google executive AnthonyLevandowski, who later joined Uber, pleaded guilty to stealing trade secretsand faces 30 months in prison.

According to documents seen by The Australian, the Zooxemployees allegedly took information relating to Tesla's proprietary “WARP”system, which handled manufacturing, warehousing, inventory, distribution, andtransportation of its products.

The documents said one warehouse supervisor allegedly emailedfour confidential documents from his company account to his personal addresswith the subject “Good Stuff”, while another sent documents in an email withthe text “you sly dog you …”.

Tesla’s statement ofclaim alleged one defendant “attached a modified version of a Tesla proprietarydocument, freshly-emblazoned with the Zoox logo, yet still bearing the layout,design, and other vestiges of the Tesla version – showing, without doubt, thatthe defendants are actively using the Tesla information they stole.”

Zoox, which was founded in 2014 and is headquartered inCalifornia, last year named veteran Intel executive Aicha Evans its new CEO,replacing ousted Australian founder Tim Kentley-Klay who wasremoved from the post in August 2018.

Mr Cannon-Brookes told The Australian at the time that removing MrKentley-Klay was a tough call.

“Tim did an amazing job for four years,” he said. “He’s done agreat job, and worked thoroughly to get the company to where it is. The boardmade a decision to go a different way with a CEO. Obviously, I’m the newestboard member there. And those board level decisions are always hard.”

Mr Cannon-Brookes put in $US100m of his own money into Zoox in afundraising round through his Grok Ventures vehicle, adding to a string ofstart-ups he holds investments in.

In December he said he expects Zoox's “robot cars” to be on theroad within two years.

At the time of his ousting, Mr Kentley-Klay said in a statementthat the board abruptly fired him and “chose a path of fear, optimising for alittle money in hand at the expense of profound progress for the universe”.

Mr Kentley-Klay, an Australian designer, co-founded the companyin 2014 with Jesse Levinson, who had made a name for himself in self-drivingcar development at Stanford University.

Zoox has built up a war chest of investment worth about $US1bn,but last week said it would lay off about 100 workers — 10 per cent of itsworkforce — as the effects of COVID-19 weigh on its revenue.

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