By: Sofia Bennett, Staff Writer
Photo courtesy of Unsplash
In business you often hear the adage, “the customer is always right.” But what happens when the customer wants to steal the business’ intellectual property rights? Such is the case currently between a local Pittsburgh company, Matthews International (Matthews), and its largest customer, Tesla.
Matthews, one of Pittsburgh’s oldest companies, has been in business for 175 years.[1] What began as a print shop is now a global provider of industrial technologies and memorialization products. Matthews focuses on designing, manufacturing, servicing and distributing high-tech custom energy storage solutions, product identification, and warehouse automation as part of its industrial technologies division.[2] This includes order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products. It also specializes in coating and converting lines for the packaging, pharma, foil, décor and tissue industries.[3] The other aspect of Matthews’ business is its Memorialization segment. The segment began with a patent for a flat bronze grave marker, as seen at Arlington National Cemetery. It has expanded to include memorials, caskets, and cremation and incineration equipment.[4]
On Friday, June 14, 2024, Tesla filed a lawsuit against Matthews in the U.S. District Court of Northern California, for trade secret misappropriation, breach of contract, and unfair business practices related to Tesla’s battery technology.[5] Tesla claimed Matthews owed it damages for which it “conservatively estimated in excess of $1 Billion.”[6] Tesla’s relationship with Matthews began in 2019 when Matthews started supplying equipment for dry battery electrode (DBE) production.[7] DBE streamlines the production of lithium-ion batteries which are the basis for Tesla’s 4680 cells, which it intends to mass produce.[8] Tesla claims it shared confidential trade secrets with its equipment supplier, Matthews, which Matthews used for impermissible purposes, such as incorporating that information into its own patent filing.[9] The patent in question is U.S. Patent No. 12,136,727 filed by Matthews on June 3, 2024.[10]
After evaluating Tesla’s claim, U.S. District Court Judge Edward Davila denied Tesla’s request for a temporary restraining order against Matthews.[11] Judge Davila’s ruling is based on Matthews’ claim that its DBE technology predates Tesla’s existence. “It is Matthews’ extensive research and development in this area that led to the U.S. Patent No. 12,136,727–not Tesla’s,” argued Matthews.[12] Matthews has been producing DBE technology for the past twenty-five years, prior to the existence of Tesla as a company.[13]
This major win means that Matthews can now sell to international customers. Matthews stated it intends to begin marketing and selling immediately. In a statement by Matthews CEO, Joseph C. Bartolacci, “[t]his ruling confirms our rights in this groundbreaking technology and re-establishes what we have been saying for years–that we have valuable solutions to support the advancement of dry battery electrode technology.”[14]
[1] https://www.matw.com/investors/news-events/press-releases/detail/249/matthews-international-refutes-tesla-allegations
[2] Id.
[3] Id.
[4] Id.
[5] https://natlawreview.com/article/ev-trade-secret-litigation-continues-boom-tesla-suing-it-supplier-over-ev-battery
[6] https://www.teslarati.com/tesla-vs-matthews-dry-battery-electrode-technology/
[7] https://natlawreview.com/article/ev-trade-secret-litigation-continues-boom-tesla-suing-it-supplier-over-ev-battery
[8] Id.
[9] https://www.courtlistener.com/docket/68859047/1/tesla-inc-v-matthews-international-corporation/
[10] https://patents.google.com/patent/US12136727B2/en
[11] https://www.teslarati.com/tesla-vs-matthews-dry-battery-electrode-technology/
[12] Id.
[13] https://www.matw.com/investors/news-events/press-releases/detail/249/matthews-international-refutes-tesla-allegations
[14] Id.