TSLA stock alert: Tesla sues battery supplier Matthews International

Tesla (NASDAQ:TSL) shares are in the news on Tuesday after the electric vehicle (EV) company announced a lawsuit against the battery supplier Matthews International (NASDAQ:MATW).

Matthews International was formerly a supplier of EV batteries for Tesla’s vehicles. Tesla’s lawsuit alleges that MATW stole trade secrets and shared them with other companies.

Specifically, the lawsuit alleges that Matthews International is sharing trade secrets about Tesla’s electrode battery manufacturing technology. Matthews International argues against this, claiming that this is an intimidation tactic by Tesla to seize its intellectual property.

In the lawsuit, Tesla is demanding damages from Matthews International. The company conservatively estimates the damages at over a billion dollars. The company also wants to prevent the company from misusing its trade secrets and at the same time demands MATW’s patent applications.

TSLA shares: Details on the Tesla lawsuit

Here is part of what Tesla says in its lawsuit against Matthews International, compiled by Electrek.

“First, Matthews improperly included Tesla’s confidential trade secrets in patent applications. In doing so, Matthews clearly attempted to claim both ownership and inventorship of Tesla’s confidential trade secrets.

Second, Matthews disclosed confidential Tesla trade secrets to other companies, including Tesla competitors. This included Matthews attempting to sell, and in some cases doing so, equipment for manufacturing dry electrode batteries to Tesla competitors, where that equipment contained confidential Tesla trade secrets.”

TSLA stock is down 1.4%, while MATW stock is down 2% since Tuesday morning.

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At the time of publication, William White had no position (either directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com Publishing guidelines.