The opinions expressed here are those of the author, a columnist for Reuters.
By Jenna Greene
September 2 (Reuters) - First came the theft, then the epic PowerPoint fail: A software engineer stole confidential source codes, jumped ship to chipmaking giant Nvidia, and then accidentally shared the documents on a video call with his former colleagues.
The theft and blunder led the man's prior employer, global automotive tech supplier Valeo, to file a trade-secrets lawsuit against Nvidia. Now a federal judge in San Jose, California, has greenlit the case for trial in November, ruling that a jury must decide whether the chipmaker benefitted from the pilfered information.
Trade secrets have been called the lifeblood of Silicon Valley, and the case raises a thorny intellectual property question: Can Nvidia, which claims it didn’t want or use any of the stolen information, still be held liable for the rogue employee’s misappropriation?
In a complaint filed in 2023, Valeo sued Santa Clara, California-based Nvidia, the world’s most valuable company, alleging the engineer downloaded tens of thousands of Valeo’s confidential source code files related to advanced parking and driver assistance systems for automobiles before quitting and decamping to Nvidia in 2021.
The chipmaker had recently beat out Valeo for a contract to supply Mercedes-Benz with software for a new parking assistance system. Such systems can aid drivers in finding spots and maneuvering their vehicles into them.
As a result, Nvidia “saved millions, perhaps hundreds of millions, of dollars in development costs, and generated profits that it did not properly earn” by making use of Valeo’s proprietary information, Valeo lawyers from Kirkland & Ellis assert.
Nvidia in court papers counters that there’s no evidence it intended for engineer Mohammad Moniruzzaman to take any information from Valeo – it fired him after the deception came to light – nor has it used any of Valeo’s trade secrets in its products, defense counsel from Quinn Emanuel Urquhart & Sullivan wrote.
Moniruzzaman, who worked for a Nvidia subsidiary in Germany and is not a defendant in the case, was convicted there in 2023 of unlawful acquisition, use and disclosure of Valeo’s trade secrets. He could not be reached for comment.
Valeo’s first move was to sue Nvidia in Germany over the breach. The attempt failed when the German court found no proof that Nvidia possessed any of Valeo’s trade secrets and ordered Valeo to pay Nvidia’s costs.
“We have no reason to believe the outcome in California will be any different,” a Nvidia spokesperson told me.
Valeo did not respond to requests for comment.
The California suit amounts to a second bite of the apple for Valeo.
In court papers, the Paris-headquartered company, which employs 100,000 people worldwide, stresses its 100-year history as an automotive technology pioneer. For example, it introduced the reverse beeper parking assistance system in 1991 (it pings faster and louder when you’re about to hit something) as well as the first automated parking assistance system in 2011.
But as cars have become increasingly computerized, Valeo has found itself competing head-on with Nvidia, which launched its “Drive” platform in 2015. In a news release at the time, Nvidia said it would put “the visual computing capabilities of supercomputers at the service of each driver."
Valeo in court papers said it previously supplied Mercedes with parking-related technology but was demoted to providing sensor hardware only after Nvidia won the software contract in 2020. A Mercedes spokesperson did not respond to a request for comment.
Moniruzzaman, who’d worked for Valeo for six years on parking and driving assistance programs, jumped to Nvidia in 2021, where he landed a more senior position working on the Mercedes project, Valeo said. However, he still needed to coordinate with former colleagues on the hardware. When he inadvertently revealed stolen source code after minimizing his Power Point presentation, a Valeo employee recognized it immediately and took a screen shot as proof.
The key question for the court: Did Nvidia use any of the misappropriated information?
In a 15-page ruling rejecting the bulk of Nvidia’s motion for summary judgment, U.S. District Judge Noel Wise on August 28 said Valeo offered “a number of circumstantial facts that give rise to the interference" that Nvidia may have relied on the tainted work.
For example, she said, the engineer had confidential Valeo documentation and hardware pinned to the walls of his workspace and Valeo source code on his laptop.
“These facts support the reasonable inference that Moniruzzaman incorporated Valeo trade secrets into the code he created” for Nvidia, she wrote. “Whether he actually did is a question for the jury.”
As for Nvidia’s claims that it "rolled back" all of Moniruzzaman’s additions to its code base, removing any compromised contributions, the judge found that too was a question for jurors to decide.
Nor was she swayed by Nvidia’s argument that the case should be dismissed because the company didn’t sanction Moniruzzaman’s conduct, and he was not acting within the scope of his employment.
Such claims “skirt the issue,” Wise wrote. Even though both sides agree Nvidia took immediate action against Moniruzzaman when his misdeeds were exposed, that's not enough to get the company off the hook now. Instead, it will be up to jurors this fall to decide if Nvidia owes Valeo royalty damages for the engineer's theft.
(Reporting by Jenna Greene)
((jenna.greene@thomsonreuters.com;))