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SolarCity faces another legal hurdle as competitor sues over trade secrets

SolarCity, the solar energy systems installer whose acquisition by Tesla Motors is being delayed by shareholder lawsuits, is facing another legal challenge from a competitor that accuses it of stealing trade secrets for the production of high-efficiency solar panels.

The lawsuit, filed Monday by Cogenra Sola and its longtime majority shareholder Khosla Ventures, alleges that SolarCity and its solar panel manufacturing business, Silevo, stole trade secrets related to Cogenra’s development of shingled solar panels, featuring overlapping solar cells as a way to operate at a higher efficiency and produce 10 to 15 percent more power than conventional modules.

The lawsuit alleges that Cogenra executives met with Silevo officials beginning in 2010, first to discuss a manufacturing relationship with Silevo and then in 2014, when Cogenra was seeking new investors at about the same time SolarCity said it planned to acquire Silevo. SolarCity is planning to open the biggest solar panel factory in the Western Hemisphere at RiverBend in South Buffalo as part of the state’s Buffalo Billion economic-development initiative.

Cogenra’s “shingling” technology produces solar panels that are all black, with the wiring hidden in the modules. Conventional solar panels have the wiring on the surface, running along the border of each individual module within the panel. The lawsuit alleges that SolarCity plans to sell “products incorporating an all-black design based on shingled-sells, touting the product’s desirable aesthetics.”

SolarCity, in a statement, said it was “confident the court ultimately will reject Cogenra’s claims, which are factually and legally baseless.” The company also said it discovered last week that one of its former employees had improperly downloaded confidential data before leaving the company to take an executive position with SunPower, which acquired Cogenra last year.

SolarCity said Wednesday that it has filed its own suit against SunPower and its former employee, alleging that they stole “highly valuable trade secrets.”

“Instead of taking responsibility and ensuring the return of our misappropriated trade secrets, SunPower subsidiary Cogenra raced to court to divert attention from its conduct by filing a meritless lawsuit,” SolarCity said. “Although SolarCity requested assurance from SunPower that it would not retain, use, or disclose the information, SunPower has not provided it.”


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