Nikola allowed to proceed with $2 billion patent lawsuit against Tesla

Hydrogen trucking startup Nikola is being allowed to continue its three-year-old $2 billion patent lawsuit against Tesla. A federal judge shelved the suit earlier this month after the two companies stopped responding to the court’s orders.

The case against Tesla will still remain “administratively closed” but won’t be dismissed, Judge James Donato said in a new order on Tuesday. He assigned Nikola two new January deadlines: one to walk the court through the technologies in question and one for a hearing about the scope of the patents Nikola claims were infringed.

Donato closed the case on October 1st after neither Nikola nor Tesla responded to orders in July and September to prep and schedule these meetings. He gave Nikola an October 6th deadline to argue why the case should be continued, which the startup met — though not totally convincingly, apparently.

“Nikola’s ostensible reasons for not responding to the Court’s orders are not particularly compelling,” the judge said in Tuesday’s order. “The case will not be dismissed at this time for failure to prosecute, but that may change if Nikola does not move this case forward to resolution in an efficient and timely manner.”

Nikola first filed the lawsuit in 2018. The startup alleges that Tesla’s own semi-truck infringes on a number of Nikola’s design patents. Nikola said in its original complaint that Tesla stealing its designs would rob the startup of $2 billion in market share.

Tesla has said since the start that there is “no merit” to the claims. The Silicon Valley automaker lost a bid with the US Patent and Trademark Office to invalidate some of the patents in question in April 2020, though, prompting Nikola founder and former CEO Trevor Milton to tweet: “Two billion dollar lawsuit moving forward. We will defend our company’s IP no matter who it is.”

But Nikola has run into a lot of trouble in the time since it filed the lawsuit. After going public — and just as the startup was about to secure an investment from General Motors — Milton was accused of lying to investors. He eventually stepped down from running the company and, this year, was arrested and indicted on multiple counts of fraud.