Tesla, Inc. v. Proception, Inc., et al.

Background

The court considered administrative motions to seal filed in connection with Tesla’s motion for a preliminary injunction and later briefing. The motions concerned portions of declarations, briefs, exhibits, access logs, and discovery materials. The motions were generally unopposed, except that Defendants partially opposed Tesla’s sealing request at Docket 81. Tesla later proposed narrower redactions, which Defendants did not oppose.

Legal standard

The court explained that judicial records are generally presumed to be available to the public. Because the materials supported a motion for a preliminary injunction related to Tesla’s misappropriation claims, the requests concerned matters more than tangentially related to the merits. The court therefore required “compelling reasons” to justify sealing, rather than the lower “good cause” standard used for records only tangentially related to the merits.

Reasons for sealing

The court found compelling reasons to seal information including file names, file paths, names of employees who had not submitted declarations, team-structure information, and third-party vendor details. It found that this information had limited public value and that disclosure could create security vulnerabilities for Tesla’s Optimus network or reveal personally identifying information about employees.

The court also generally found compelling reasons to seal specific, nonpublic Optimus project details because disclosure could endanger Tesla’s trade secrets and cause competitive harm. The court noted that it did not rely on the sealed information in its accompanying order, further limiting its public value.

Rulings

The court granted in part the parties’ motions to seal. It granted Defendants’ motion to seal the specified portions of the declaration of Zhongjie “Jay” Li. It granted in part and denied in part Tesla’s motion to seal that declaration, allowing some redactions but denying protection for certain team-structure and Optimus-project information that was sufficiently high-level, unlikely to cause competitive harm, or highly relevant to the court’s order and therefore potentially important to the public.

The court also granted in part the request concerning Exhibit B to the declaration of Angelique Kaounis. It granted sealing for the listed employee names, team-structure information, project details, vendor name, and filename excerpt, but denied sealing for portions at transcript pages 204:24–205:5, 217:8, and 252:16–18. The court stated that the information in those portions was sufficiently high-level that competitive or other harm was unlikely.

For Exhibit F to the declaration of Jaideep Venkatesan, the court granted in part Tesla’s proposed redactions but denied sealing for several listed terms because they were sufficiently high-level, had otherwise been made public, or were highly relevant to the accompanying order and therefore of significant public interest. The court denied sealing for Exhibits P and Q because they were published research articles, were not confidential, and Tesla did not seek to maintain them under seal in its supporting statement.

The court stated that the declaration of Sean McDermott was stricken and therefore had not been considered. It allowed that document to remain under seal. The court also allowed certain discovery documents to remain sealed because it had not considered or cited them and they had little, if any, public value at that time.

Order

The Clerk was ordered to maintain the listed docket materials under seal. Tesla was ordered to file more narrowly redacted public versions of Docket 65-6, Docket 70-3, Docket 71-2, Docket 71-9, and Docket 71-18 no later than December 1, 2025. The Clerk was ordered to unseal Dockets 71-16 and 71-17 in their entirety. The order was signed by Susan Van Keulen, United States Magistrate Judge.