Nikola Motor claims Tesla infringed its truck patents, seeks $2B in damages

The race for supremacy among trucking startups has taken a dramatic turn this week as Nikola Motor Co. has filed a $2 billion lawsuit in U.S. District Court for the District of Arizona against Tesla for patent infringements on its Nikola One hydrogen-electric truck.

In the suit, Nikola alleges that Tesla not only tried to lure away the truck’s chief engineer, but it then violated three of the six patents Nikola holds on its model. Nikola said Tesla violated the following patents: fuselage patent, wrap windshield, and side door.

Nikola says that after unveiling its vehicle, it received $2 billion in orders and now has over $6.3 billion in reservations. “Nikola’s success is evident in receiving tens of millions in investments from dozens of investors, partnering with large trucking companies like U.S. Xpress and Ryder, and receiving order for over 7,000 trucks,” the suit says.

Tesla, the suit alleges, has over 1,200 orders for its Tesla Semi at a full value of over $200 million, based on analyst accounts. The suit goes on to claim that “Tesla’s infringement has harmed Nikola’s plans by causing confusion in the market.”

“The confusion has diverted sales from Nikola to Tesla,” the suit further alleges. “Further, any problems with the Tesla Semi will be attributed to the Nikola One, causing harm to the Nikola brand. For example, Tesla has had problems with its batteries starting fires and its autonomous features causing fatal accidents. Should these problems arise with the Tesla Semi, the market will attribute these problems to Nikola because of the similarities between the two vehicles.”

The suit says continuation of diverted sales will “increase the cost of building the hydrogen fueling stations throughout the United States.”

Nikola is also concerned by the range limitations of the Tesla Semi – Tesla claims a range up to 500 miles running on electric only power – will “make Nikola’s product less appealing to customers.”

In an emailed statement to FreightWaves, a Tesla spokesperson said, “it’s patently obvious there is no merit to this lawsuit.”

When reached for comment, a Nikola Motor spokesperson simply referred to the lawsuit.

The Nikola One is a hydrogen-electric truck with initial fleet testing scheduled for 2019 and full production in 2021. The company recently announced it would refund all deposits, taking a swipe at Tesla in a tweet by saying “we don’t use your money to operate our business.”

Nikola and Nel Hydrogen signed a $5.5 million purchase order to build hydrogen stations in early April. “One of the most respected brands in America just signed an order with Nikola to convert 100% of their fleet over to Nikola trucks. This will require an additional 28 more stations to go up to support those efforts on top of the existing Nel purchase order. Nel has been a great partner to work with and we are excited to begin replacing diesels in America with zero emission trucks. The future for zero emission trucks has never been brighter,” said Trevor Milton, CEO of Nikola, said in a release at the time.

Tesla unveiled its Semi late in 2017 to much fanfare. Unlike the Nikola One, the Tesla Semi is purely electric and has range limitations. In the suit, Nikola claims that as of June 13, 2016, Tesla had not announced that it was considering building a heavy-duty semi truck. But, Nikola claims, on July 20, 2016, Tesla’s 2016 Mast Plan Part Deux announced it was “in the early stages of development at Tesla and should be ready for unveiling next year.”

On September 22, 2016, Tesla contacted Kevin Lynk, Nikola’s Chief Engineer,” the suit alleges. “Tesla told Lynk that ‘Tesla is building a new team to focus on development of heavy trucks.’ Tesla said that ‘based on [Lynk’s] background at Nikola, it seems like your background would be a great fit.’ Tesla then asked if Lynk ‘would be open to a quick call to hear what we’re up to?’”

After a photo alleged to be the Tesla Semi appeared on Reddit on Oct. 2, 2017, Nikola Motor sent a letter to Tesla to notify it of “Nikola’s pending patent applications, [and] Nikola’s belief that Tesla’s Semi will infringe on the patents, and demanded that Tesla refrain from unveiling its Semi.

Tesla unveiled the Semi on Nov. 16, 2017, at an official event in California.

The suit lists the three patents Nikola alleges Tesla violated and includes pictures of those patents as well as images of both the Nikola One and Tesla Semi.

“The Nikola One embodies the Asserted Patents, which include the fuselage, a wrap windshield, and a mid-entry door,” the suit claims. “The Tesla Semi is substantially similar to Nikola’s unique designs. A side-by-side comparison between the two reveals that Tesla has infringed Nikola’s patented truck designs.”

Nikola Motor is seeking “an order and judgment permanently enjoining Tesla and its officers, directors, agents, servants, employees, affiliates, attorneys, and all others acting in privity or in concert with them, and their parents, subsidiaries, divisions, successors and assigns, from further acts of infringement of Nikola’s asserted patents.”

Further, the suit seeks “a judgment awarding Nikola all damages adequate to compensate for Tesla’s infringement of Nikola’s asserted patents, and in no event less than a reasonable royalty for Tesla’s acts of infringement, including all pre-judgment and post-judgment interest at the maximum rate permitted by law, estimated to be in excess of $2 billion.”

The suit also is asking for a “judgment awarding Nikola all damages including treble damages, based on   any infringement found to be willful, pursuant to 35 U.S.C. § 284, together with prejudgment interest; a judgment awarding Nikola its costs pursuant to 35 U.S.C. § 284; a judgment finding that this case is exceptional and awarding Nikola its attorney fees in accordance with 35 U.S.C. § 285; a judgment awarding Nikola Tesla’s total profits pursuant to 35 U.S.C. § 289; and any other remedy to which Nikola may be entitled to or the Court deems just and proper.”

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