Bloomberg reports that Tesla Inc. is currently facing a massive lawsuit – worth $2 billion – by a hydrogen-powered truck startup called Nikola Corp. The startup claims that Elon Musk’s company had intentionally utilized its patented tractor-trailer designed features.
The lawsuit, which was filed in Arizona, sought the aforementioned money in damages in return. According to a Tesla spokesperson, there is no merit whatsoever from the lawsuit. Nikola Corp., on the other hand, did not further comment, as “the lawsuit speaks for itself.”
Nikola Corp. was founded sometime in 2014. Since then, the company has managed to reveal its first two products. These are the electric four-wheel offroad vehicle and the hydrogen-electric semi-truck, both of which arrived on the market in May 2016. Another semi-truck was eventually added to the lineup, along with an all-electric personal watercraft.
The lawsuit filed by the startup business lays out a plethora of claims that, when viewed together, prove Tesla indeed used the company’s patents. According to the lawsuit, there are similarities in the aerodynamic fuselage, front fenders, mid-entry doors, and wraparound shields, among others. The startup also claims that a Tesla recruiter by the name of Aaron Hoyos tried to convince the chief engineer of the company to join Elon Musk’s team a few months after the hydrogen semi-truck was unveiled. This also suggests that Tesla, contrary to what it is commenting, had a general idea of Nikola’s distinctive design features.
Nikola Corp. said that it could identify how Tesla’s truck has infringed on its design, and this is through spy shots which have found their way on the Internet. Apparently, these shots surfaced in the very weeks leading to the Elon Musk-led company’s reveal in mid-November last year.
The startup has already forwarded a cease and desist letter last November 7th, and it states that Tesla should delay its then announcement until the ongoing issue was fixed. However, Tesla never responded and went for the big reveal.
Nikola Corp. explains that this led to confusion in the market, with the infringement harming the startup’s ability to attract new and potential investors or partners.
Interestingly, Nikola Corp. has already sparred with Tesla before, with one being the name of their companies which alludes to the great inventor Nikola Tesla. In April, the former claimed that while there were $8 billion preorders for the various semi-truck versions, each of these reservations would be refunded 100 percent. It also means that the company would never use the consumer’s money just so it can operate. It is safe to say that these statements were direct barbs at Elon Musk’s company.
Design patents are basically granted solely for aesthetic inventions, not entirely for the ones with a specific function. They could last for at least 15 years starting from the date of issuance and are even considered easier cases to prove than ones over functions and/or technical parts.
Rob Katz of Banner & Witcoff in Washington, whose specialty is in design patents, said that the courts will have to consider all earlier known designs and the patented design’s overall look. Katz added that it is actually rare for two automakers to sue each other due to designs, as most suits are there to work as an effort in curbing the market for replacement parts. It could also serve as an allegation that Chinese manufacturers are creating copies of well-known brands in order to sell in their home market.
Katz also said that for the two companies to differentiate themselves in a very established market, they must need unique designs. Amidst the ongoing lawsuit, Tesla shares still jumped to 0.2 percent to $300.45.