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SolarCity Accused of Taking Shingling Technology Secrets

Sept. 27, 2016
SolarCity denied the accusation, claiming that it had independently developed its technology for layering solar cells like shingles to increase the efficiency of panels.

SolarCity Corp., the rooftop solar developer controlled by Elon Musk, was accused of misappropriating trade secrets and other intellectual property in a lawsuit over the development of shingled-cell solar modules.

SolarCity got a head start in developing the modules after SunPower Corp.’s Cogenra Solar unit shared its shingling technology for manufacturing solar panels, according to a lawsuit filed Monday in San Francisco federal court. Cogenra said in the complaint that it shared confidential information with Silevo Inc., which was later acquired by SolarCity.

"It was only by misappropriating Cogenra’s proprietary technology, including its trade secrets and other intellectual property, that SolarCity and Silevo were later able to announce a claim that they set a new world record for solar panel energy efficiency," Cogenra said in the complaint.

SolarCity fired back, alleging in a statement that it had independently developed its technology for layering solar cells like shingles to increase the efficiency of panels. It also said that SunPower had failed to respond to its claim of trade-secret theft.

Shortly after June 2014, when SolarCity announced its plan to acquire Silevo, the merged company began filing patent applications that included misappropriated proprietary technology, Cogenra said in its lawsuit. Many further details of the timing and reasons for the sharing of the information are blacked out in the complaint.

Before it was acquired by SunPower in 2015, Cogenra had sought investments from larger solar-power companies and several had expressed an interest in acquiring it, according to the complaint. SolarCity was one of those potential buyers and obtained confidential information as part of the due diligence process, said two people familiar with the matter who didn’t want to be identified because it wasn’t public.

Jonathan Bass, a SolarCity spokesman, said in an e-mailed statement that the company was “confident the court ultimately will reject Cogenra’s claims, which are factually and legally baseless.”

Last week, SolarCity discovered that one of its former employees had downloaded confidential information without authorization and then joined SunPower as a senior sales manager, Bass said.

‘Meritless Lawsuit’

“Instead of taking responsibility and ensuring the return of our misappropriated trade secrets, SunPower subsidiary Cogenra raced to court to divert attention from its conduct by filing a meritless lawsuit,” Bass said.

Khosla Ventures III LP, which owned about 80% of Cogenra from 2009 to 2015, is also a plaintiff in the case.

“Solar City’s statement is false,” Khosla and SunPower said in a statement. “We have filed a complaint and look forward to the legal process taking its course.”

In April, 2014, Cogenra said it submitted its shingled-cell technology to the Department of Energy’s SunShot Initiative grant contest, intended to spur solar power manufacturing. The information wasn’t widely known to competitors, Cogenra claims, disclosed on a “need-to-know basis” and under a non-disclosure agreement.

Cogenra seeks a court order barring SolarCity from using its technology, plus compensation for its rival’s profits from the use of it.

By Olivia Zaleski and Joel Rosenblatt

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