Judge closes $2 billion patent lawsuit by Nikola against Tesla

A judge has administratively closed a $2 billion patent lawsuit that Nikola had filed against Tesla. The lawsuit was filed by the hydrogen trucking startup against the Elon Musk-led Electric Vehicle (EV) giant back in 2018, and has finally been shelved by the federal judge at the Northern District Court of California. The reason? Both the plaintiff and the defendent stopped responding to court mandates. The case will be dismissed if Nikola fails to show cause on why it should be continued, by October 6th.

Languishing Without Explanation

Judge James Donato wrote to Nikola an order to show cause, saying that the case is “languishing without explanation or apparent good cause. It has been asserted that neither Nikola, nor Tesla have been responding to some of the court’s requests during the past few months.

One such incident which has been cited is July 7th, 2021, when the Court had asked both the parties to “schedule a new tutorial,” and also claim construction hearing dates, but neither of the sides responded. Thus was followed by the Court vacating all further proceedings on claim construction on September 2nd, 2021, owing to the lack of response.

Even at the time of issuing the order, no party had approached the Court to propose a new hearing date. Tesla attorney Michael Rhodes declined to issue a comment.

Allegations and Counter-Allegations

This comes even as Nikola has been doing the rounds on the news, thanks to founder and former CEO Trevor Milton being accused of committing fraud by short-selling research company Hindenburg Research. Prior to that, the firm had gone public in 2020, followed by General Motors announcing its plans to take up a minority stake in the startup.

While Nikola had carried out its own probe into the matter, the Securities and Exchange Commission as well as the Department of Justice, had also done their part, eventually accusing Milton of multiple counts of fraud.

In its original complaint, Nikola had accused Tesla of copyright infringement, claiming that it had infringed on the patent that the Milton-led firm had filed for its hydrogen-powered truck. The case alleged that Tesla’s Semi was making use of the same mid-entry doors, wrap-around windshield, and aerodynamic fuselage.

The plaintiff had also accused Tesla of stealing its designs, and causing “confusion in the market” that could potentially cost Nikola over $2 billion in sales. Elon Musk’s company had dismissed the claims as having no merit.

The companies have often argued over which specific patents to be presented during the trial, with Tesla counter-accusing Nikola of stealing its design. Then, in April last year, Tesla lost a bid to invalidate some of the patents, with the US Patent and Trademark Office.