Woodinville-based battery tech company Group14 Technologies has lost a legal battle against British competitor Nexeon.
Group14 first filed its lawsuit against Nexeon in U.S. District Court for the Western District of Washington in 2022, alleging misappropriation of trade secrets, unjust enrichment and breach of contract. Judge Thomas Zilly on Sep. 18 dismissed the claims with prejudice on the grounds that Group14 had ample time to outline its case but failed to do so.
"The court has devoted significant time, energy, and resources to this matter, having previously issued a 27-page order, roughly half of which addressed the parties’ discovery disputes centered around Group14’s duty to identify its trade secrets ... and a 25-page order devoted solely to the subject of whether Group14 had described its trade secrets with the 'reasonable specificity' necessary for Nexeon to mount a defense," Zilly wrote. "The court now enters this even lengthier order, being fully satisfied that Group14 has had ample opportunity to reveal its cards, but it has failed to do so either because it wishes to continue hiding them or because the cards have no showdown value. In moving for summary judgment, Nexeon has called Group14’s apparent bluff."
A Group14 spokesperson said the company disagrees with the court's opinion and is considering next options, including a plan to appeal.
Nexeon, meanwhile, in November filed counterclaims of tortious interference, alleging Group14 interfered with Nexeon's business by dissuading potential customers from working with Nexeon due to the original lawsuit. Those claims are still pending.
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Group14 was founded in 2015 as a spinout of energy storage company EnerG2. The company makes a silicon-based anode powder to replace the traditional graphite powder found in most batteries today, with the goal of making batteries cheaper, smaller and longer lasting. Group14 has started with consumer electronics but has larger ambitions around electric vehicles.
Group14 alleged in its original complaint that Nexeon looked to acquire Group14 in 2017, but the deal fell through because Group14 felt the offer was short of its long-term value. Although Nexeon called off the acquisition in 2018, the company then tried to reach a licensing agreement with Group14, but Group14 declined.
The complaint accused Nexeon of deciding in 2018 to file patent applications using Group14's trade secrets, which Group14 found out about after the patents were published in September 2019. Nexeon's motion to dismiss, meanwhile, noted Group14 waited three years in between discovering the alleged trade theft and filing a complaint, making it hard to believe Group14 felt truly wronged.
Nexeon has offices in Oxfordshire, England, as well as Yokohama, Japan and Seoul, South Korea. The company is also using silicon to improve batteries, focusing on industries like electric vehicles and consumer electronics.
Group14 on Friday secured up to $200 million from the U.S. Department of Energy to build a factory in Moses Lake that produces silane, a key gas for silicon-based battery technology. Group14, which raised a $614 million Series C plus $100 million from the DOE in 2022, is already building a 1 million-square-foot factory campus in Moses Lake that is set to start production later this year.
Cheap electrical power and a strong industrial labor pool are a big draw for battery tech companies in Moses Lake. Alameda, California-based Sila plans to finish its Moses Lake factory in the first quarter of 2025. Palo Alto, California-based OneD Battery Sciences in August opened two 12,500-square-foot facilities in Moses Lake.
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