Proactive Investors - Tesla Inc (NASDAQ:TSLA) has filed a lawsuit against its former supplier, Matthews International, accusing the company of breaching their confidentiality agreement selling Tesla's trade secrets and attempting to patent confidential information related to electric-vehicle batteries.
Tesla claims that Matthews incorporated its trade secrets into patent filings and sold Tesla's equipment for dry-electrode manufacturing to rival companies without authorization, resulting in its competition gaining access to its technology.
The company is seeking at least $1 billion in damages due to Matthews' alleged misconduct.
In response, Matthews stated that Tesla's lawsuit is "utterly without merit" and that it plans to "vigorously defend the matter," calling it a new tactic in Tesla's ongoing efforts to bully Matthews and improperly take its valuable intellectual property.
A statement from the company claims that Tesla's lawsuit is a tactic to bully Matthews and improperly take its valuable intellectual property related to dry battery electrode (DBE) technology.
The firm contends that Tesla's complaint aims to restrict it from providing innovative DBE solutions to other clients, thereby hindering the market's potential benefits from the cost savings associated with Matthews' technology.
Matthews believes that Tesla's lawsuit is an attempt to interfere with its ability to realize the value of its intellectual property.
Shares of Matthews closed 7.1% lower in New York on Monday.