After two years of allegations, mostly made by Tesla CEO Elon Musk via Twitter, that Xpeng Motors was using stolen Tesla source code obtained by a former Tesla employee, it appears that wasn't the case at all

It took many months, but the neutral 3rd party appointed to compare Tesla's source code with that used in Xpeng's vehicles concluded that Xpeng didn't have any Tesla tech in its ADAS. Once that was established, Tesla moved to settle the case with its former employee.

The employee at the center of the issue, Dr. Guangzhi Cao, had admitted from the start that he uploaded Tesla’s Autopilot source code to his personal cloud-based storage account, before going to work for Xpeng's US subsidiary, XMotors. 

However, Cao has always maintained that he never provided any Tesla tech to XMotors, and that XMotors never asked for any such information. While it wasn't illegal for Cao to upload Tesla's IP while he was working for them, it was a breach of Tesla's code of conduct. 

Once Tesla realized that Cao did this and then went to work for XMotors, some in the company, including Elon Musk, assumed that meant he passed it along to XMotors to incorporate into its ADAS. The problem is, now we know that didn't happen. 

Xpeng P5
The recently introduced Xpeng P5 will incorporate LIDAR into its ADAS

InsideEVs has received statements from Dr. Guangzhi Cao and XMotors on the issue. Both appear to be very pleased with the outcome and eager to put this issue behind them. 

Statement on Behalf of Guangzhi Cao on the Settlement of  Tesla, Inc. v. Cao, No. 19-cv-01463-VC (N.D. Cal.)  

Dr. Guangzhi Cao is pleased with today’s resolution. Throughout this case, Dr. Cao has provided cooperation and transparency to Tesla in its investigation. He is glad that today’s settlement, at last, dispels the cloud of suspicion that Tesla cast over him when it filed this lawsuit.  

Dr. Cao believes that two years of litigation have now established what he knew from the beginning: he never accessed any Tesla data after he left Tesla, he never provided Tesla information to XMotors or anyone else, and nobody at XMotors or anywhere else ever asked him to do so. Dr. Cao is gratified that Tesla has finally dismissed its claims and stopped its search for evidence that does not exist.  

Dr. Cao regrets and apologizes for the unnecessary harm that Tesla’s lawsuit caused to  XMotors. He is grateful to his colleagues at XMotors who supported him during this litigation.  

Dr. Cao is among the most talented engineers in the world and has been fortunate to have helped build two of the best autonomous driving teams. He is eager to move on to new chapters in his personal and professional life, and he thanks his family and friends for their support. 

After keeping quiet for most of the first year the lawsuit against Cao was ongoing, Xpeng began to grow weary of Tesla's repeated claims that the company was using Tesla IP in its autonomous driving systems and began to respond to the "baseless" allegations.

It's important to note that Tesla never made XMotors or Xpeng a party to the lawsuit against Cao. However, if the forensic analysis proved that XMotors did incorporate Tesla IP into its ADAS, then we're certain that would have happened. What would Tesla really stand to gain from suing Cao?

The ultimate goal was to prove he provided XMotors with the source code he uploaded, and then find it in Xpeng's system. They would then have sufficient grounds to go after XMotors and Xpeng seeking substantial monetary compensation, and they would have been right to do so.  

Since that didn't happen, they settled the case with Cao admitting he was wrong to upload Tesla's IP, and agreeing to pay a minimal fine for breaching Tesla's employee code of conduct. 

XMotors Media Statement, April 16, 2021

Tesla never made XMotors a party to the lawsuit, even as it determinedly sought to show that Dr. Cao had provided information to XMotors. 

After over two years of extensive discovery, including against XMotors, Tesla has failed to find any substantive evidence that supports its allegations and innuendos against XMotors. Tesla has failed to show any credible evidence that XMotors ever possessed, let alone used, any Tesla information from Dr. Cao.

Tesla has finally dismissed its claims and stopped its search for evidence that does not exist.

Technology innovation is at the core of our foundation and strategy. In our pursuit of popularizing smart EVs, we respect any competition; however, we will not tolerate any bullying behavior or attempt to disrupt competitors. XMotors fully respects intellectual property rights, and bases its own competitive edge on its in-house-developed proprietary R&D and intellectual property.   

XMotors is pleased that, after two years of litigation, Tesla and Dr. Guangzhi Cao, Xmotors’ former employee, have finally resolved their disputes. 

XMotors is particularly pleased that the resolution allows Dr. Cao to move forward with his career.

IP theft is a huge problem - when it actually occurs

The theft of intellectual property is a serious issue and according to some reports costs the United States $225 to $600 billion per year. However, we can't allow ourselves to assume it's happening without some form of proof. We're supposed to be assumed innocent until proven guilty in the US, but unfortunately, that's not always the case. 

Even though the case has been dismissed with prejudice, and it was proven that Xpeng didn't use Tesla technology, there will most likely still be some that will continue to believe (wrongfully) that Xpeng "stole" Tesla IP - the damage has been done.  

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