Karma sues EV startup Lordstown, claims it stole infotainment tech
Karma Automotive is suing Lordstown Motors, alleging the Ohio-based electric-truck firm stole trade secrets and poached employees involved in the development of infotainment tech.
First reported by The Business Journal of Youngstown, Ohio, the lawsuit was filed by Irvine, California,-based Karma in the United States District Court Central District of California October 30.
In the lawsuit, Karma asked for a temporary, and then permanent, injunction to prevent Lordstown from using its intellectual property, as well as damages. The temporary injunction was denied.
2020 Karma Revero GT
“We were extremely disappointed to learn about the circumstances surrounding this case involving our former employees and their secretive dealings with Lordstown Motors and their management. Throughout the development process we worked in good faith and believed we had a strong deal put together to provide our next generation connected car and infotainment system but we were surprised and dismayed to find out about the events and how they unfolded without our knowledge," Stefan Gudmundsson, Karma chief innovation officer, said in an emailed statement to Green Car Reports.
Lordstown also provided a response, calling Karma's story "a fantasy," and said: "We have no need or use for Karma’s purported trade secrets, and we are confident that our dealings with Karma complied with all relevant laws."
Karma alleges that Lordstown approached it about using a Karma-developed infotainment system in the Lordstown Endurance pickup truck, which is scheduled to start production in 2021. The deal was supposed to net Karma more than $3 billion in revenue by 2024, based on Lordstown production forecasts, court documents said.
2020 Karma Revero GT with available Sport package
According to the lawsuit, the two companies signed a non-disclosure agreement in February 2020, giving Lordstown access to Karma's trade secrets for five months to evaluate the infotainment system. The lawsuit states that Karma and Lordstown signed a letter of intent June 11, detailing the partnership, and that Lordstown informed Karma July 9 that it planned to move ahead, and make an initial payment to Karma.
"The courtship was a ruse; the check never arrived," the lawsuit said. Instead, Karma alleges that Lordstown poached employees and stole trade secrets related to the California firm's infotainment system.
The lawsuit names two former Karma employees now working at Lordstown—Roger "Joe" Durre, and Hong Xin "George" Huan—as defendants. Durre is the former director of Karma infotainment development, while Huan worked for Karma as a software architect.
Trade-secret lawsuits are nothing new in the tech-infused world of electric automakers. Earlier this year, Tesla sued Rivian, alleging the company stole trade secrets related to charging infrastructure and manufacturing.
Karma is currently planning an all-electric relaunch of the Fisker Karma–based Revero, called the GSe-6, as the first of several models under development.