Faraday Future showed a flashy prototype at the 2016 CES in Las Vegas (Photo: Bongard)

The autonomous vehicle space is seeing its first wave of litigation as players in a crowded field fight over technology, money and, above all, talent. In each case, a senior employee who has led a company’s push into autonomous vehicles left to set up his own business or joined a competitor and stands accused of taking critical technical details with him.

Industry watchers say the cases to date are more about companies trying to keep key employees from jumping ship in a hot market than about protecting intellectual property that has yet to be commercialized. “This is the early wave of lawsuits, before patents are settled and revenues generated,” said Monty Agarwal, a San Francisco based lawyer specializing in commercial litigation and intellectual property matters. “But, I do think these lawsuits make employees a lot more cautious about leaving.” In the latest case, Los Angeles based electric car company Faraday Future filed a lawsuit on January 29 against Evelozcity, an El Segundo-based start-up founded by Faraday’s former chief financial officer, Stefan Krause, for allegedly stealing trade secrets. Faraday Future, run by China’s Jia Yueting, founder of financially-troubled Chinese conglomerate LeEco, also accused Krause and former CTO Ulrich Kranz of luring away at least 20 former employees, according to a complaint filed in California federal court.


Evelozcity declined to comment on the litigation, or its number of current employees. When the lawsuit was filed it issued a statement saying, “We do not have, nor do we need, any technology from Faraday Future. This complaint continues Faraday’s pattern of hurling false and inflammatory accusations against us.” Evelozcity’s business plan is still in development, according to people close to the company. As such, it’s not clear how much IP of value Krause and Kranz may have taken with them or put into use. The more immediate motive for the

Screen-Shot-2018-03-12-at-10.06.16-AM-274x300. Stefan Krause is co-founder of Evelozcity. He previously was a senior executive at Faraday Future, Deutsche Bank and BMW (Photo: Evelozcity)

lawsuit may be the fight for investment dollars. Krause, a former Deutsche Bank executive and chief financial officer of BMW, was responsible for corporate finance, investor relations and capital management at Faraday Future. According to Chinese media reports, Krause proposed several fundraising plans for the carmaker, including selling part of its technology to Indian automotive manufacturer Mahindra & Mahindra, which was rejected by Jia. Krause resigned from Faraday in October, and started Evelozcity shortly thereafter. “To me it looks like they are trying to shut down a competitor who competes for investment dollars,” said Sam Abuelsamid, a senior automotive industry analyst at Navigant Research in Detroit. One person close to both Evelozcity and Faraday suggested that the lawsuit was brought to drum up publicity for Faraday, which has been suffering from cash shortages and product launch delays.

Money, and controlling market space may also be driving Chinese tech giant Baidu in its suit against Wang Jing, the former head of Baidu’s autonomous driving unit, and founder of self-driving tech start-up JingChi Inc. In a lawsuit filed in November in Beijing, Baidu accuses Wang Jing of violating non-competition rules by recruiting Baidu employees and registering a new company while still working for Baidu. He also is accused of stealing trade secrets, allegedly by refusing to return his work computer. Headquartered in Silicon Valley and Beijing, JingChi specializes in developing autonomous cars, and has completed test drives in California, and China. Shortly before the lawsuit was initiated, JingChi raised 82 million dollars from leading venture capital firms, including Nvidia GPU Ventures. Initially, JingChi strenuously denied the claims and vowed to fight. In a statement, the company said: “Baidu’s lawsuit is completely without facts. Our lawyers will respond factually and legally. Our headquarters will be moved back to China, and we will demonstrate our technology capability.” Then in a surprise move, JingChi announced in March that Wang Jin had stepped down as CEO, replaced by former chief technology officer Han Xu. The company also agreed to join Baidu’s Apollo open self-driving platform as a partner. Baidu subsequently dropped the suit against the JingChi, while continuing its litigation against Wang.

The Google-Waymo case

The biggest case, and the only one to settle so far, is the lawsuit of US autonomous driving firm Waymo, a spinoff from Google, against Uber Technologies for stealing trade secrets and intellectual property. In the lawsuit, Waymo said that former lead engineer Anthony Levandowski downloaded 14,000 files containing the company’s autonomous driving technology to an external storage device shortly before quitting to join Uber in 2016. Google (Waymo’s owner) does not have a track record of being a litigious company. But, in the words of Abuelsamid at Navigant, “They saw this case as so egregious, with so many documents taken that they felt they had to do something. They wanted to make example to tell employees that if you want to go, ok, but don’t take trade secrets.”

The view among industry insiders and legal experts is that the rise in litigation is being driven by the fact that there are so many players in the AV industry with lots of money but only a limited supply of IT talent. According to Navigant, there are 37 major companies currently engaged in the design and production of autonomous vehicles, along with a myriad of smaller firms. The growth of these companies is being funded by a tidal wave of venture capital investment. According to a recent study by the Brookings Institute, roughly 80 billion dollars has been invested in the sector to date. Most of this funding has occurred in the last two years, with the pace accelerating through 2017.

Talent shortage

With so many companies entering the autonomous vehicle space, the demand for talent with autonomous vehicle-related skills like machine learning and computer vision has become intense. Self-driving car engineers makes an average of 238,000 dollars a year, according to Paysa, a Silicon Valley based firm tracking employment and salary trends. In San Francisco, that figure jumps to 295,000 dollars a year. And with so much money being thrown at the industry, top talent is quick to attract job offers from rival companies. That trend is exacerbated by the fact that California, where many AV companies are based, does not recognize non-compete agreements, unlike most other US states. But as Waymo’s quick settlement with Uber implies, litigation only goes so far. And going all the way to the jury may not be the safest option given the early stage technology. “The technology is not really commercialized yet, so damage is hard to prove,” said the lawyer Monty Agarwal. “The industry is so amorphous right now. In time there will be a shakeout, maybe a few acquisitions, and then it will become more about IP.”

By Jason Booth

(Editor's note: This is an updated version of a story that runs in the March issue of automotiveIT International magazine. For a complimentary subscription, please go to: