How Tesla discovered Dyson's electrifying secret
Nov. 10, 2017  Kaye Wiggins, Bloomberg

James Dyson has predicted that within a few years cars would be the largest
source of revenue for the Dyson company.  (ANDREW TESTA / THE NEW YORK TIMES
file photo)  

LONDON—When Dyson Ltd. began developing an electric car — a radical
departure for a company known for vacuums and hand dryers — executives knew
it would be tough to keep the plan under wraps. But what they didn’t know
was that an engineer who they had picked for a small and highly secretive
group to work on it already had a job offer from Tesla Inc.

Court documents dating back to 2015, and published for the first time
Monday, reveal the story of how a 30-year-old engineer, Pierre Pellerey,
told Tesla about Dyson’s electric car more than two years before it was made
public, kicking off months of legal battles.

It is one of many legal disputes to reveal the high stakes when tech workers
move to new jobs. In a courtroom thousands of miles away in San Francisco,
Waymo LLC, the self-driving car unit of Alphabet Inc., is suing Uber
Technologies Inc. over claims that the ride-hailing company is basing the
future of its business on technology that was stolen by a former employee.

Pellerey, whose role was so secret that company founder and chair James
Dyson had told him not even to discuss it with colleagues, forwarded an
email to Tesla’s lawyer that barely disguised Dyson’s plan. The lawyer said
he didn’t share it with anyone else at Tesla. But the court case that
followed, in which Dyson won an injunction preventing Pellerey from working
for Tesla for nine months, meant that Tesla would have known of Dyson’s
plans two years before they were made public in September 2017.

The law firm that represented Pellerey, who now works at Tesla, declined to
immediately comment. Representatives of both Dyson and Tesla also declined
to immediately comment. The court case was publicly disclosed after Dyson
announced its car plans in September.

The race to dominate the electric cars market is increasingly competitive,
with manufacturers from Volkswagen AG and Daimler AG to Toyota Motor Corp.,
as well as Tesla and now Dyson, investing in the technology. Dyson said in
September that it was spending £1 billion ($1.67 billion Canadian) to
develop the car and the same sum to create solid-state batteries to power
it. James Dyson predicted that within a few years cars would be the largest
source of revenue for the company. Pellerey would have known that Dyson’s
plan was to use a solid-state battery in its electric car, rather than the
lithium ion batteries used in most electric cars, according to an October
2015 court ruling on the dispute.

Pellerey, a French national and a senior engineer earning £51,000 a year at
Dyson’s headquarters in Wiltshire, U.K., accepted a job from Tesla in March
2015, but didn’t immediately tell Dyson because the offer was conditional on
getting a visa to work in the U.S., according to the court ruling released
this week. 

In May, with the visa still not approved, he was called into a secret
meeting with two colleagues and told that James Dyson wanted the company to
develop an electric car. They would be drafted to work on the confidential
project, known only as “Project E.” The three were told to take their
laptops and move to a secure area within the research department.

“I felt a little uncomfortable about being involved in that project, as I
knew I would be involved with electric vehicles at Tesla,” Pellerey later
told the court in a closed hearing, recounted in the court ruling.

But, he said, he was torn. If he’d come clean, he feared that “it would have
compromised my future prospects at Dyson should Tesla have not confirmed an
unconditional job offer with me.” And he said the work he was involved in at
Dyson was different from the work he was going to do at Tesla. So, he kept

In June, however, Tesla offered him a job in Europe, which avoided the visa
difficulties, and he told Dyson he was leaving. When he did that, Dyson’s
lawyers told him in a letter that he couldn’t work for Tesla for 12 months
because “your proposed new employer is engaged in the same type of business
as the business comprised in Project E.” Dyson’s electric car project was
described as “highly sensitive and confidential.”

But Pellerey told Tesla’s associate general counsel Yusuf Mohamed about the
letter. When Mohamed asked to see the document, Pellerey said he wasn’t sure
he could share it because it was marked confidential. 

“Yes, just don’t put it on Twitter,” Mohamed replied, according to the court
judgment. Mohamed said he needed it “to carry out our indemnity obligations”
because Tesla was agreeing to cover Pellerey’s costs in a legal battle with

Pellerey later told the court that he thought Mohamed would handle it
confidentially because he was a lawyer — an explanation that a judge
accepted while saying it “seems obviously inaccurate to a lawyer.”

“The disclosure of that letter to Mr. Mohamed told him, a member of the
outside world, that DTL (Dyson) was working on an electric car,” Judge Keith
Lindblom ruled in February 2016. “That was just the type of disclosure that
the Project E team had had impressed upon it that it must not make.”

Mohamed said in a letter to Pellerey’s solicitors in September 2015 he had
not shared the letter with anyone at Tesla. But, another London judge,
Richard Snowden, said in his October 2015 ruling that “Tesla must by now
have deduced that Dyson is working on an electric car project.”

“It does not require a great deal of imagination to come to the conclusion
that DTL would not be going to such trouble if the only confidential
information he possessed related to vacuum cleaners and hand dryers,” Judge
Snowden said in the October 2015 ruling.

Dyson won the injunction preventing Pellerey from working at Tesla for nine
months, but lost a bid for a second one stopping him from using its
confidential information. Judge Snowden ruled in October 2015 that there was
“no basis” for the second injunction because the engineer would not
immediately be working on electric cars, though he said a court might have
to look at that again if Pellerey started working for a car manufacturer.
Pellerey “does not intend deliberately to disclose details of Project E to
any third party,” the judge ruled. 

Court hearings in the case were held in secret in 2015, so that the media
couldn’t find out that Dyson was planning an electric car — a move that the
company made public in September. Pellerey started working at Tesla in June
2016 and still works there now, according to his LinkedIn profile.
[© Toronto Star Newspapers 2017]
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