03:52 PM EDT, 06/17/2024 (MT Newswires) -- (Updates with Matthews' response eight paragraph onwards.)

Tesla (TSLA) on Friday sued Matthews International ( MATW ) for allegedly stealing confidential trade secrets related to the automaker's dry-electrode battery manufacturing technology and disclosing them to Tesla competitors.

Matthews became one of Tesla's suppliers for the company's dry-electrode battery manufacturing equipment in 2019.

Tesla said it shared confidential designs of industrial machinery necessary for the manufacturing process after Matthews signed a nondisclosure agreement. "However, Matthews betrayed that trust," Tesla said in a lawsuit filed with the US District Court for the Northern District of California.

Tesla "conservatively estimates" monetary damages to exceed $1 billion, according to the lawsuit.

The company alleged that Matthews attempted to claim both ownership and inventorship of its trade secrets by filing for their patents without its knowledge or permission, resulting in the publication of confidential information regarding the dry-electrode manufacturing process, according to the court filing.

Tesla further alleged that Matthews tried to sell to its competitors equipment for dry-electrode battery manufacturing that "embodied Tesla's confidential trade secrets," the court filing showed.

The company is seeking to stop Matthews from the sale of this equipment and to transfer ownership of all patent applications related to the manufacturing technology.

Matthews on Monday refuted the claims and said Tesla's legal complaint was "utterly without merit" and that it intended to defend the matter.

Matthews said the lawsuit was a new tactic to "bully" the company and "improperly take [its] valuable intellectual property." It said the complaint failed "to identify even one trade secret that Tesla purportedly disclosed to Matthews."

Matthews added that its engineers had been developing the technology that served the basis of dry battery electrode solutions well before the formation of Tesla as a company.

"Five years ago, Tesla came to Matthews seeking engineering solutions and access to our valuable intellectual property, trade secrets and our global engineering talent," Matthews said in the statement.

Tesla shares were up nearly 6% in recent Monday trading, while Matthews fell 7%.

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