$2B Nikola v Tesla patent suit suspended due to no-shows

A federal judge has suspended a $2 billion patent lawsuit brought by Nikola, an electric vehicle company, against Tesla after both sides stopped responding to requests to schedule hearings.

U.S. District Judge James Donato on Wednesday ruled that the case is administratively closed. "Plaintiff Nikola Corp. bears the burden of prosecuting this case and moving it to a resolution," he wrote. "It has dropped the ball, and this 2018 action is languishing without explanation or apparent good cause."

Nikola has until Oct. 6 to answer why the case shouldn't be entirely dismissed for failure to prosecute.

Nikola and attorneys representing the company at Beus Gilbert McGroder PLLC and Steyer Lowenthal Boodrookas Alvarez & Smith LLP did not respond to requests for comment.

Tesla attorney Michael Rhodes, a partner at Cooley LLP, declined to comment.

In patent cases, judges hold claim construction hearings to determine the protected portions of the disputed patents and meaning of relevant terms.

Donato in July vacated claim construction hearings scheduled for September in San Francisco and ordered both sides to select new dates in November or December. They failed to respond.

There's been no movement in the case for nearly three months since Tesla and Nikola filed claim construction documents.

The patent dispute relates to Tesla's all-electric semi-truck and Nikola's hydrogen-powered semi-truck. Nikola claimed Tesla infringed on design and utility elements, including cab shape, wraparound windshield and mid-entry side door. It seeks more than $2 billion, arguing the introduction of a similar vehicle by a direct rival hurt its ability to attract investors.

Donato has refused to dismiss the lawsuit. He found that a side-by-side comparison of the challenged features of the vehicles "leave no doubt" that Tesla may have infringed on Nikola's patents. Nikola Corp. v. Tesla, Inc., CV18-07460 (N.D. Cal., filed Sept. 23, 2020).

Nikola has been busy on multiple litigation and business fronts.

After going public in 2020 and General Motors acquiring a minority stake in the company, Nikola founder Trevor Milton was charged by the Department of Justice with securities fraud for allegedly lying about "nearly all aspects" of the company's business. He was accused of making false and misleading statements that Nikola successfully created a fully functioning prototype of its hydrogen-powered semi-truck when he knew it was inoperable.

Milton has resigned as chairman of the company. He's maintained that he was wrongfully charged following a faulty and incomplete investigation.