Tesla sues ex-staff member for stealing proprietary software code

Tesla reportedly sued one of its former employees for stealing company information and breaching a contract, CNBC Reports.

According to a trial filed Friday, Tesla claims software engineer Alex Khatilov quietly siphoned off software code and files from Tesla’s internal Warp Drive system while working on the company quality ainsurance team. The complaint says he started working for the company in December, and within days he started uploading “thousands of highly confidential software files” to his personal Dropbox account.

Tesla’s Warp Drive software is a back-end system developed in-house to automate many of its business processes related to the production and sale of cars. The company says the stolen hardware could potentially reveal to competitors “which systems Tesla believes are important and valuable to automate and how to automate them – providing a roadmap for copying Tesla’s innovation,” according to the lawsuit. The code in question took “200 man-years of work” to develop, says Tesla.

When confronted with Tesla investigators on January 6, Khatilov claimed he simply “forgot” that he had transferred the files to his personal Dropbox. He further elaborated in a New York Post interview that it was all a misunderstanding.

Khatilov said he was instructed to download the files to his computer as he would be working with them as part of his job with Tesla’s QA team, which involved helping automate tasks related to systems in the environment, health and safety of the company. While trying to make a backup copy of a folder containing the internal document cache, he “unintentionally” moved it to his Dropbox by mistake.

“I didn’t know there were 26,000 files there,” he told the media. He didn’t even know Tesla had taken legal action against him until the Post contacted him.

It’s honestly not hard to believe. Tesla fiercely protects his proprietary data and has a habit of launching lawsuits whenever he smells the slightest whiff that his secret sauce may be in danger. Tesla accused another former employee, Guangzhi cao, for stealing source code related to its autopilot system in 2018, and this lawsuit is still being settled in court. Tesla also sued the standalone startup Zoox in 2019 and the electric manufacturer Rivian in 2020 on allegedly running away with trade secrets. Last April, Zoox settled with Tesla for an undisclosed sum and admitted that “some of his new Tesla hires” were in possession of internal Tesla documents.