IP Law Daily, TRADE SECRETS NEWS—N.D. Cal.: Tesla sues former employee and his robotics start-up for trade secret theft, (Jun 17, 2025)

By Deirdre Kennedy, J.D.

The former employee allegedly improperly acquired, and then further misappropriated Tesla’s trade secrets related to its Optimus project.

Tesla has filed a lawsuit against Proception, Inc. and its founder Zhongjie “Jay” Li in the U.S. District Court for the Northern District of California, alleging federal and state counts of trade secret misappropriation and tortious interference with contract. According to the complaint, Proception, through Li, improperly acquired, and then further misappropriated Tesla’s trade secrets related to its Optimus autonomous humanoid robot project (Tesla, Inc. v. Proception, Inc., No. 5:25-cv-04963 (N.D. Cal. filed June 11, 2025)).

Tesla is a global leader in robotics, artificial intelligence, and innovation. At the center of its mission is Optimus, Tesla’s autonomous humanoid robot which it claims embodies its broader vision for the future. This action arose from the alleged unlawful acquisition and use of Tesla’s Optimus-related trade secrets by Li and Proception. While employed at Tesla, Li worked on key components of Tesla’s Optimus—including advanced robotic hand sensors—and was entrusted with some of the most sensitive technical data in the program. In the final weeks before his departure, Li is alleged to have downloaded Optimus-related files onto two personal smartphones. Less than a week after he left Tesla, Proception was incorporated. And within just five months, Proception publicly claimed to have “successfully built” advanced humanoid robotic hands, which Tesla claims bear a striking resemblance to the designs Li worked on at Tesla.

The trade secrets at issue, according to the complaint, include highly sensitive (1) engineering specifications, schematics, and blueprints, including measurements, grips, tensions, ranges of motion, and degrees of freedom; (2) tests, their results, and technical analyses; (3) models; (4) product roadmaps; (5) close-range video profiles of prototypes; (6) strategy documents; (7) vendor research; and (8) source code related to Optimus’s hand motion and actuators—all of which are highly valuable and confidential information regarding the Optimus project that collectively represent the crown jewels of Tesla’s robotics efforts.

Tesla trade secret safeguards. To safeguard its confidential, proprietary, and trade secret information, Tesla claims to have a security system in place consisting of contractual, digital, and physical controls, along with associated practices, protocols, and training.

As a condition of employment, all Tesla employees sign a Tesla, Inc. Employee Non-Disclosure and Inventions Assignment Agreement (NDA), among several other onboarding agreements. Through the NDA, Tesla employees pledge, among other things, to not disclose Tesla’s “Proprietary Information,” defined to include “all information, in whatever form and format, to which [they] have access by virtue of and in the course of my employment,” and encompassing “technical data, trade secrets, know-how, research and development, products, features, concepts, ideas, plans, designs, formulas, methods, processes, discoveries, improvements, source and object codes, data, programs, lists of or information related to, suppliers, and customers, financial information and other business information, Inventions, and works of authorship.”

As a condition of employment, Tesla employees also agree to be bound by Tesla’s Code of Business Ethics, which requires employees to protect Tesla’s confidential and/or proprietary information and Tesla’s trade secrets. Further, Tesla’s Social Media Guidelines specifically prohibits disclosure of “Tesla’s trade secrets, products or Tesla Business Data or of any manufacturing process.”

In addition, Tesla’s network and servers are password-protected, firewall-protected, and accessible only to current Tesla employees with proper and, in some cases, restricted credentials. Tesla restricts access to proprietary and confidential information so that it is accessible only to those with a demonstrated need. After an employee resigns or is terminated, Tesla promptly deactivates that user’s permissions.

Allegations of misappropriation. Li was employed by Tesla from August 22, 2022, to September 13, 2024, and was initially assigned to the Optimus sensor team and entrusted with highly confidential and proprietary work product related to the project. The Optimus sensor team’s work included development of the Optimus hands. On July 1, 2024, Li was reassigned to the Optimus AP chest computer team.

As a condition of his employment, Li entered into the Tesla NDA agreement. In addition to the safeguarding of information described above, the NDA contains an Assignment of Inventions provision which, among other things, assigns to Tesla “all [Li’s] right, title and interest in and to any and all Inventions that (i) are developed using equipment, supplies, facilities, trade secrets, or Proprietary Information of the Company.”

Following Li’s reassignment from the hand sensor team to the chest computer team on July 1, 2024 and up to his date of departure from Tesla on September 13, 2024, Li is alleged to have accessed highly sensitive and confidential Optimus hand-related files he no longer had a business need to access, including highly sensitive and confidential Tesla files and source code related to Optimus’s hand motion and actuators and confidential tactile sensing information.

During this two-month period leading up to his departure, Li also allegedly conducted voluminous online searches from his Tesla desktop computer related to humanoid robotic hands, as well as searches related to venture capital (VC) funding and startup resources. Searches as early as July 15, 2024, seem to show that Li was seeking funding for his future venture. Proception was incorporated on September 19, 2024—just six days after Li left Tesla.

The complaint points out that only five months after its founding, Proception touted that it had “successfully built” “advanced humanoid robotic hands” and also claimed that “in the coming 9 months” it would make it “first shipments to research customers.” Tesla asserts that absent specific know-how, this is an improbably fast development cycle.

In addition to damages, Tesla seeks preliminary and permanent injunctive relief pursuant to 18 U.S.C. 1836(b)(3)(A) against Proception’s and Li’s further misappropriation in order to protect Tesla’s confidential and proprietary information, including its trade secrets, its goodwill and standing in the competitive marketplace, and its business interests.

The Case is No. 5:25-cv-04963.

Judge: Keulen, S.

Attorneys: Angelique Kaounis (Gibson, Dunn & Crutcher LLP) for Tesla, Inc.

Companies: Tesla, Inc.; Proception, Inc.

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