Tesla Sues Ex-Engineer for Allegedly Stealing Robotics Trade Secrets

Tesla has filed a federal lawsuit in Northern California against its former engineer, Zhongjie “Jay” Li, and his startup Proception Inc., accusing them of misappropriating trade secrets from Tesla’s Optimus humanoid robotics programme.

Allegations & Legal Framework

According to the complaint, Li worked on Optimus sensor development from 2022 to 2024, including sensitive robotic hand movement research. Before resigning in 2024, he allegedly downloaded confidential files related to hand actuation onto personal devices. 

Li founded Proception six days after resigning, and within five months, the company had reportedly created robotic hands with “striking similarities” to Tesla’s, suggesting it leveraged Tesla’s proprietary technology.

Tesla contends that Li’s actions allowed Proception to shortcut an extensive R&D process that took Tesla years and cost billions of dollars, raising serious concerns under the Uniform Trade Secrets Act and federal regulations protecting company IP.

Also Read: Safeguard Your Business: Common IP Mistakes and How to Prevent Them

Legal Claims & Remedies Sought

Tesla is pursuing:

• Monetary damages, both actual and punitive;

• An injunction preventing Proception and Li from using or disclosing the alleged trade secrets;

• A jury trial to adjudicate the dispute

Represented by Gibson Dunn & Crutcher, Tesla’s legal team has opened formal proceedings in the U.S. District Court for the Northern District of California.

As of now, neither Jay Li nor Proception are publicly represented in court filings, and they have not yet offered a response to the lawsuit.

Broader Implications

This case underscores the legal and economic tensions surrounding innovation-driven sectors like AI and robotics. Tesla alleges that billions invested in Optimus, intended for factory automation and broader industrial use, are at risk if employees can transfer core technology via portable devices.

The dispute highlights challenges faced by tech firms in:

• Protecting high-value trade secrets when employees switch to competitors;

• Securing and monitoring internal digital access, especially for sensitive R&D;

• Utilising the judicial system to deter and seek redress for IP theft.

Legal Precedents & Industry Context

Tesla has repeatedly pursued IP theft cases, including lawsuits over Autopilot source code and battery technology. Similar high-stakes actions have become part of major tech companies’ IP defence strategies, ensuring that proprietary advancements—even intangible, software-driven ones—remain protected under law.

Expert Commentary

Sunil Ambalavelil, Chairman of Kaden Boriss and a seasoned expert in technology IP law, shared:

“Tesla’s lawsuit illustrates a critical tension in the digital age: how companies protect R&D when employees, empowered by mobile devices and global teams, move rapidly.”

“Courts now face decisions that balance employee agility against corporate innovation rights. Robust internal policies, confidentiality safeguards, and IP litigation strategies are becoming indispensable in sectors like AI and robotics.”

Key Takeaways

• Tesla alleges former engineer Jay Li stole sensitive Optimus robotic hand designs.

• Li’s startup, Proception, developed similar hands within five months, allegedly using Tesla’s secrets.

• Lawsuit seeks damages and a court order to prevent further use of proprietary technology.

• Filed under the Uniform Trade Secrets Act in Northern California federal court.

• The case highlights risks of trade secret theft in high-tech firms and emerging legal defences.

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