SunPower unit hits SolarCity with trades secrets case in US court

A trades secrets dispute between two of the biggest names in the global PV industry is brewing in the US after a unit of SunPower accused SolarCity of taking its intellectual property (IP) – just as the latter enters a crucial phase in its planned $2.6bn acquisition by Tesla.

An action against SolarCity has been filed in a federal court in California by Cogenra Solar, a subsidiary of SunPower, multiple financial news outlets reported today.

According to Bloomberg, the dispute focuses on Cogenra's 'shingling' technology, which the SunPower unit claimed it had previously shared on a confidential basis with Silevo – a high-efficiency module specialist that SolarCity bought in 2014.

Cogenra argues that SolarCity misappropriated the trade secrets once it had acquired Silevo and used them in its own product development programme, it is reported.

SolarCity, the largest US rooftop PV group, is quoted dismissing the claims as “baseless” and flagging up its own allegations relating to a former employee who it says took confidential information to SunPower.

Investment group Khosla Ventures, which previously owned a majority of Cogenra, is also a party in the action against SolarCity.

The dispute comes at a highly sensitive time for SolarCity, which is in the throes of its proposed acquisition by Tesla, the electric vehicles and storage pioneer run by technology entrepreneur Elon Musk – who is the largest shareholder in both companies.

The companies are this month due to give further details of their grand vision of a ‘solar roof’ product that unites their various specialisms – seen as vital to justifying a deal that has already come under critical scrutiny from investors.

Tesla last week was slapped with four lawsuits by shareholders attempting to stop the SolarCity deal, actions which the company said had no merit but admitted could delay the acquisition if the legal process drags on.

SolarCity's shares were unruffled by news of the latest lawsuit, holding steady at around $20 in pre-market trading in New York, a level still well down on a 52-week high of almost $59.

Tesla and SolarCity hope to have the deal wrapped up by the end of the year.

SunPower – itself majority owned by French oil giant Total – and SolarCity, which are both based in California, were not immediately available for comment on the reports.