BREAKING: Martin Eberhard sues Elon Musk and Tesla for libel, slander and breach of contract
by Sam Abuelsamid on Jun 10th 2009 at 10:50PM 
The only thing surprising about Martin Eberhard's latest move is that it took so long to happen. Eberhard was co-founder of Tesla Motors along with Mark Tarpenning, and he was ousted from the company in November 2007 by then-chairman Elon Musk. Musk has never been one to hide his feelings about other people (or much of anything) – and comments he has made about Eberhard and his role in the company have clearly not gone over well.
To nobody's surprise, Eberhard has filed a lawsuit in California Superior Court in San Mateo against Musk and Tesla Motors. In the suit, Eberhard accuses Musk of slander and libel, along with breaching the contracts that he and the company had with Eberhard. At 146 pages, we haven't yet had time to digest the entire complaint (though we do find it interesting that our coverage is mentioned in the lawsuit), but we have a sneaking suspicion this one is going to get ugly. You can read the filing in PDF form by clicking here.
ABG reached out to Tesla for comment, and spokeswoman Rachel Konrad provided the following statement:
"This lawsuit is a fictionalized, inaccurate account of Tesla's early years -- it's twisted and wrong, and we welcome the opportunity to set the record straight. Incidentally, Tesla will also be filing counterclaims and in the process present an accurate account of the company's history."More as it happens...
[Source: San Mateo California Superior Court]
Reader Comments (Page 1 of 1)
Organic 11:59PM (6/10/2009)
Who killed Tesla? Tune in next week.
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jharlan 12:16AM (6/11/2009)
No illusions here about Elon's ethics. Didn't he try to chisel more
money out of the early depositors?
Eberhard waited until there was enough substance in Tesla to have a chance of collecting damages. I have no idea about the substance of the case, but it will be interesting and ugly!
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Lad 1:05AM (6/11/2009)
Appears we have a battle of egos here; neither really needs more money. However, these things take a lot of money and with continuances can take years to work through the American court system, if ever. The guy with the most money usually outlasts the other(s).
And, It makes little difference because Daimler will purchase Tesla anyway...that's what Musk does...builds a company and then sell it! Perhaps Eberhard knows this and is making a move against the company to collect damages before it's sold. Lets see how this all plays out. And buy the way (pun intended), Daimler knows how to mass produce luxo automobiles...Musk doesn't!
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Andy 1:16AM (6/11/2009)
Musk walked into a libel suit with his very public comments.
Eberhard is teaching him a life lesson. Doubt he is emotional about it, just a reward vs risk calculation.
The lawyers will make it look uglier than it really is.
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Scatter 4:19AM (6/11/2009)
This is all very unedifying. Not impressed at all.
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solution 9:06AM (6/11/2009)
Wondering if Martin will write a book.
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mister nomer 1:09PM (6/11/2009)
I'd buy it.
Tim 9:08AM (6/11/2009)
Whiney baby!
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jharlan 9:48AM (6/11/2009)
This will have some entertainment value. The timing is interesting. With the lawsuit hanging over Tesla, will they press to settle to clear the way for the sale or IPO of the company? This could be a brilliant strategic move.
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Gerald Cherry 10:07AM (6/11/2009)
To know Elon Musk is to despise Elon Musk. End of story.
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jzj 1:09PM (6/11/2009)
And, do you know Elon Musk? If not, your comment is simply useless gossip-mongering.
meanderingthemaze 4:15PM (6/12/2009)
Elon takes credit for Tesla and has never given credit to Eberhard. That says a lot about someone's character even without knowing him.
I'm glad to hear Eberhard is suing. Hopefully, he wins.
Chris H. 2:45PM (6/11/2009)
Some interesting claims are included in the complaint:
- Musk was never enrolled in a PhD program in physics at Stanford, as he often claims.
- Musk does not have a B.Sc. in physics from the University of Pennsylvania, as he also often claims.
- Musk was granted an undergraduate degree in economics from U of Penn in 1997, not 1995. This change in dates was necessary to fit with his Stanford story. Musk founded Zip2 in 1995, so it looks like he completed his economics degree after starting Zip2.
This info is from pages 18-19 of the complaint.
If this is true, it means that Musk has been deceiving a lot of people for a long time, which speaks to his character.
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stevejust 9:20PM (6/11/2009)
I found that interesting as well. I read the complaint, and usually there are two schools of thought with a complaint: the first is to write out the whole story, and at 33 pages and 203 paragraphs, this comes close. The second is to keep it short, just pleading straight facts without a lot of embellishment and just enough to give the other party the notice required to sustain any demurrers. In a case like this, clearly the first approach is probably the right one to take.
This complaint almost tells the whole story, perhaps including the otherwise gratuitous stuff about Musk allegedly lying about his education (though perhaps relevant because if Musk doesn't know the science -- then he really only brought money to the table and probably isn't in a position to critique the technical job Eberhard did). What this complaint doesn't do is present Eberhard's version of the transmission debacle. If I were writing this complaint, I would have alleged very specific factual allegations with respect to what exactly happened with the transmission -- especially when one the counts of relief requested is for the upgraded drive train.
As it stands, we are going to see Tesla file a counterclaim, blaming Eberhard for the transmission problems and claiming his lack of leadership caused them. Why, oh why, didn't this get dealt with in the complaint in the first place?!?!
It is going to be fascinating to see what happens if a jury -- particularly in San Mateo -- ever gets a hold of this.
Does anyone know how many patents Tesla holds? How many are a result of Eberhard’s work? How many are a result of Musk’s work?
When I saw how long this was I was hoping for a lot of answers it just doesn’t have.
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Sam Abuelsamid 9:21PM (6/11/2009)
According to the US patent and trademark office Tesla has been awarded 3 patents
http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=%2Fnetahtml%2FPTO%2Fsearch-bool.html&r=0&f=S&l=50&TERM1=tesla+motors&FIELD1=&co1=AND&TERM2=&FIELD2=&d=PTXT
stevejust 1:27AM (6/12/2009)
Yeah, Sam.... I did the same search. You might also want to look at the 8 pending patents, to see Martin's name among the inventors:
http://appft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=%2Fnetahtml%2FPTO%2Fsearch-bool.html&r=0&f=S&l=50&TERM1=%22Tesla+Motors%22&FIELD1=AS&co1=AND&TERM2=&FIELD2=&d=PG01
Electricnick 4:47PM (6/12/2009)
That's all we need now in the world of EVs!
Hopefully it won't interfere with the release of their mutual products... at least too much.
The Electricnick.com team.
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ug 5:20PM (6/15/2009)
I guess Martin's gotta eat.
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