The $2 billion patent infringement lawsuit filed by Nikola Corporation against Tesla Inc. has officially been dropped.
Nikola originally launched the lawsuit in 2018, accusing Tesla of copying several of its patented designs for a U-shaped windshield, fuselage, and side doors for a new, eco-friendly semi-truck, which shared striking parallels to the Nikola One hydrogen-fuelled truck.
Tesla was quick to respond by denying the claims and launching a countersuit. The Elon Musk-founded company argued that their designs weren’t guilty of copying Nikola’s truck, since they were based on earlier designs that were 'intentionally concealed' from the U.S. Patent and Trademark Office, Reuters explains.
However, San Francisco court documents have since revealed that both companies have withdrawn their claim and counterclaim earlier this month.
The two companies agreed to voluntarily dismiss the case without prejudice, meaning the claim and counterclaim can be re-filed in the court at a later date. So far, both Tesla and Nikola representatives have declined to comment on the news.
The reason for the withdraw is likely to do with Nikola founder Trevor Milton’s ongoing legal troubles; he’s currently facing a criminal indictment on fraud charges after being accused of misleading the company’s investors.
But it’s not only Milton that’s taken a hit – the accusations have significantly affected the company. In December, Nikola agreed to pay $125 million to acquiesce U.S. Securities and Exchange Commission charges relating to accusations that it misled investors about the prospects of the company and its designs.
Nikola was offered substantial warning that its lawsuit against Tesla was in jeopardy, which likely motivated the company to withdraw the claim.
Last October, it was reported that the lawsuit was close to being dismissed. At the time, Bloomberg reported that a judge told Nikola they had one last chance after the company 'dropped the ball' on the litigation amidst the founder’s criminal charges.
Court documents reveal that the judge argued Nikola had offered no 'compelling’ reason or failing to respond to the court’s orders to proceed with the lawsuit. They emphasized the case was at risk of being dismissed for “failure to prosecute.”
Tesla appears to be moving ahead with their semi-truck despite the controversy. They first announced plans for the truck in 2017, and at the time, said production would begin in 2019. However, it’s since been revealed the company has postponed production until 2022, so it’s expected to begin sometime later this year.