Karma Automotive filed a federal lawsuit against Lordstown Motors Inc., charging the Ohio company with theft of intellectual property, breach of contract and poaching employees involved in the development of an infotainment system that originated with Karma.
Jeff Holland, Karma’s director of communications, in an email to The Detroit Bureau confirmed that Karma, which is developing a luxury electric vehicle, filed suit in the U.S. District Court for the Central District of California. In the suit, it asked for a temporary and then a permanent injunction to prevent Lordstown Motors from using any of Karma’s intellectual property as well as damages. The temporary injunction was denied.
The lawsuit also charges a former Karma employee, who defected to Lordstown Motors last summer, with sabotage of a computer system. Lordstown officials denied the charges, claiming the system is incompatible with its pickup.
“We were extremely disappointed to learn about the circumstances surrounding this case involving our former employees and their secretive dealings with Lordstown Motors and their management,” Stefan Gudmundsson, chief innovation officer, Karma Automotive, said in a statement e-mailed to The Detroit Bureau.
“Throughout the development process we worked in good faith and believed we had a strong deal put together to provide our next generation connected car and infotainment system, but we were surprised and dismayed to find out about the events and how they unfolded without our knowledge.”
Lordstown Motors, which has seen its market value climb as it races to build a battery-electric pickup truck in a factory that once belonged to General Motors, denied Karma’s charges, labeling them a “fantasy.”
According to Vindy.com, a northeast Ohio news website, Lordstown Motors said could not use Karma’s infotainment system for the Endurance because of hardware differences and the Karma system had proven to be too expensive. In addition, Lordstown claims the employees it hired left of their own because the Karma was moving to reduce staff.
In the lawsuit, Karma claims that Lordstown contacted its offices in Irvine, California at the beginning of February 2020 about the possibility of adapting an infotainment system Karma had under development.
Holland said Karma was developing the system for its own vehicles that are scheduled to debut in 2021. Lordstown spent several weeks evaluating the system to determine whether it could work on the Endurance, the company’s battery-electric pickup, and in June notified Karma that they wanted to move ahead with the project, according to court papers.
Lordstown then signed agreement specifying that it planned to use the system developed by Karma in the Endurance.
However, in early August Lordstown canceled the project. Subsequently, Karma learned, according to court records, that its director of infotainment had defected to Lordstown and was looking for office space in Irvine. “They hired the whole team, all six people,” said Holland, adding Karma then began the investigation, including a forensic reconstruction of computer and email records, that led to the lawsuit.
Holland said Karma is moving ahead with its own plans for the release of a luxury electric vehicle, the Revero GT next year and has other models in development, including the GS6, which also is scheduled to debut in 2021.