Graphics Processor Giant Nvidia Faces Lawsuit Over Stolen Trade Secrets
After a record-breaking year, tech giant Nvidia is making headlines yet again. However, this go-around has nothing to do with its booming stock price and everything to do with allegations that Nvidia stole trade secrets as alleged in a recently filed lawsuit.
Automotive tech company Valeo Schalter und Sensoren filed a lawsuit against Nvidia in a San Jose U.S. District Court last week accusing the chip company of stealing trade secrets.
The accusations come after Nvidia hired former Valeo employee Mohammad Moniruzzaman in 2021. The lawsuit says that before leaving his position with Valeo, Moniruzzaman copied large batches of files, some of which included source code for a new application that dealt with AI-assisted parking. Moniruzzaman was also accused of stealing other confidential documentation.
The two companies were on a collaboration call after being hired by an unnamed major automotive company. During the video chat with Nvidia and Valeo employees, Moniruzzaman shared his screen to conduct a presentation while others followed along. After he finished the presentation, Moniruzzaman minimized the presentation window and likely unintentionally revealed another window with the label “ValeoDocs.” The window contains source code belonging to Valeo’s software.
Valeo employees who were on the conference call recognized the source code and took screenshots as evidence. The incident prompted an investigation into Moniruzzaman by his former employer Valeo, which revealed that he had copied over the confidential data along with thousands of other files before he left the company.
A separate investigation launched by the German company revealed that Moniruzzaman had transferred the stolen source code along with other confidential documents onto his Nvidia-issued computer. Moniruzzaman was eventually charged in September for stealing the trade secrets.
The lawsuit against Nvidia accuses, "As part of the German criminal investigation, Mr. Moniruzzaman's Nvidia computers were seized, and law enforcement confirmed the presence of the stolen source code files and also discovered the teaching and training documentation discussed above."
Valeo maintains that its proprietary data was "shared with other Nvidia software engineers who have access to and are using Valeo's trade secrets." Among these trade secrets were “shortcuts in the development of its first parking-assistance software.” These illegally obtained trade secrets “saved Nvidia millions, perhaps hundreds of millions, of dollars in development costs." The lawsuit continues, "In using these stolen trade secrets to develop a competing product, Nvidia has diminished the value of Valeo's trade secrets to Valeo."
Valeo, a 100-year-old automotive tech company, argues it is an experienced and established company in the industry and that Nvidia, a graphics card company, is "a recent entrant to the automotive industry" with a "total lack of experience" in developing parking-assistance technology.
Valeo says in its lawsuit that the compromised files included "decades of dedicated work, comprising billions of dollars’ worth of research and development that has allowed Valeo to become a market leader in parking and driving assistance systems and autonomous vehicle technology for motor vehicle manufacturers."
After the claims of the stolen trade secrets, Nvidia responded to Valeo in a 2022 letter explaining it had "no interest in Valeo's code" and that it had "cooperated fully” in the investigations. Nvidia has yet to respond to the lawsuit.
As part of the lawsuit, Valeo is seeking to have a court ban Nvidia from using Valeo’s trade secrets plus unspecified damages. Valeo is also seeking a share of Nvidia’s profits, plus millions to match the alleged savings that Nvida reaped by skipping over the development costs of the products created by the stolen trade secrets. Valeo is seeking a trial by jury.