Tesla Accuses Former Software Engineer of Stealing Trade Secrets

Tesla has accused a software engineer named Alex Khatilov of illegally transferring sensitive company documents to personal storage within days of his hiring on December 28. Khatilov has now been fired from his position as a senior software engineer.

According to court filings, Khatilov has allegedly transferred as many as 26,000 documents to a personal DropBox account, many of which had little to do with his job duties, within the first week of his employment at Tesla. Many of these files are scripts used to automate some company functions like the ordering of parts and delivery of vehicles. Tesla is suing for breach of contract and theft of confidential information and trade secrets.

The paperwork associated with the court case says the scripts “would inform competitors of which systems Tesla believes are important and valuable to automate and how to automate them — providing a roadmap to copy Tesla’s innovation.”

Previous issues with alleged theft of Tesla’s internal documents include court battles with former employees like Martin Tripp, who distributed sensitive company information to third parties in 2018. A Nevada district court found Tripp liable for violations of the Nevada Computer Crimes Law, which bans unauthorized use of data, and ordered him to pay $400,000 in restitution. Tripp refused to admit wrongdoing, saying that his actions were justified due to allegations of safety issues at the Gigafactory that he had worked at.

Tesla has also fended off cyberattacks such as an attempt by Russian nationals to bribe employees to inject malware into its computers that would have allowed them to access sensitive documents. The documents could have been held for ransom. At least one of the Russian nationals involved in the plot had been arrested on a charge of conspiracy to intentionally cause damage to a protected computer while attempting to leave the United States after the incident was reported.

In the most recent case, Tesla employees detected Khatilov’s downloading of the files on January 6. Only about 40 members of his team had access to the documents. He initially told company investigators about his downloads that it was only a few administrative files. Inspection of the DropBox account showed otherwise.

Despite the evidence against him, Khatilov denies the allegation that his intention was to do harm to Tesla or deliver the documents to other parties. He now says that the transfer of documents to his DropBox was something he did accidentally while attempting to back up the files. Tesla has not said whether they have established any other motive for the transfer of files to the DropBox account.

“I’ve been working for, like, 20 years in this industry, and I know what sensitive documents are about, and I never, ever tried to access any of those, or steal it,” he told the New York Post.

He claims that he deleted the files from his DropBox and removed the DropBox software from Tesla’s computer system at Tesla’s request when confronted about it. However, in a rare public statement following the incident, Tesla says that they cannot establish that Khatilov did not first transfer them to a device controlled by him, such as a USB flash drive or mobile device. Due to COVID-19 restrictions, Tesla said that it has not been able to “ensure complete deletion” of the files.

The company will seek a jury trial in the case. It is seeking attorney fees and unspecified damages.

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