SolarCity, SunPower Legal Fight Expands With Claims Over Secrets

  • Lawsuit follows claim by SunPower on shingled-cell technology
  • Ex-SolarCity worker allegedy brought customer data to SunPower

SolarCity Corp.’s fight with SunPower Corp. is heating up, as the biggest U.S. rooftop solar company filed a lawsuit claiming the second-biggest panel producer in the country stole customer information and trade secrets.

SolarCity’s filing comes after another suit brought Monday against it, by a SunPower unit and the venture capitalist Vinod Khosla, also alleging theft of trade secrets.

SolarCity alleged in a complaint Tuesday that a former project development manager “downloaded hundreds of commercial customer records” before leaving the company and joining SunPower earlier this year. The records were connected to sales of solar and energy-storage systems for large commercial customers, according to the filing.

SolarCity, based in San Mateo, California, is seeking a court order barring use of its records and unspecified damages. Natalie Wymer, a spokeswoman for San Jose, California-based SunPower, declined to comment on the pending litigation in an e-mail Wednesday.

New Technologies

The cases target two key technologies. As demand slows for rooftop power systems, SolarCity and its rivals are focusing on driving down costs to make their systems more attractive to customers.

One of the main ways to do that is to make individual panels more efficient. SunPower alleges in its suit that SolarCity misappropriated its technology for developing shingled-cell solar modules -- a design that layers solar cells atop each other to fit more of them into a standard sized panel. SunPower acquired in 2015 a company called Cogenra that had been working on the technology. Khosla Ventures III LP had owned about 80 percent of the company. SolarCity spokesman Jonathan Bass on Monday said the suit was “legally baseless.”

The other emerging technology is storage. SolarCity and SunPower both offer rooftop solar systems that incorporate batteries that retain electricity for use later. It’s an important part of billionaire Elon Musk’s vision for combining SolarCity with his Tesla Motors Inc. He’s the chairman and biggest shareholder in both companies, and SolarCity’s board agreed in August to be acquired by Tesla.

Storage Systems

While still relatively new, the idea has been gaining traction, especially for large commercial installations. SolarCity alleges that its former employee downloaded data related to “sales of solar photovoltaic systems and energy storage systems to large commercial entities, including manufacturers, national retail chains, and Fortune 1000 companies,” shortly before jumping ship to SunPower, according to the filing.

The suit mirrors another dispute dating to 2012, when SunPower sued SolarCity claiming that five former employees hired by the rooftop solar company had copied “tens of thousands of files” that were taken and moved to SolarCity computers. That case was settled confidentially, according to Kady Cooper, a SolarCity spokeswoman.

The case is SolarCity Corp. v. SunPower Corp., 16-cv-05509, U.S. District Court, Northern District of California (San Jose).

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