Lawsuit accuses Cummins of stealing trade secrets

A California-based tech firm that is suing Cummins Inc. accuses the Columbus, Indiana-based engine manufacturer of “brazen misappropriations of trade secrets and breach of contract.”

The plaintiff in the case is C3.ai, a publicly traded Redwood City, California-based company that develops artificial-intelligence-powered applications for clients. The complaint does not specify how much is being sought by C3 in damages, but the company said it estimates the amount will be between $500 million and $1 billion.

C3’s lawsuit is pending in Delaware Superior Court. C3 filed its complaint in November, but the case was under seal until last week, when the court denied Cummins’ motion to dismiss the case and released a redacted version of the complaint.

Cummins spokeswoman Natalie Guzman told IBJ via email that “we take all legal matters seriously and are committed to conducting our business with the utmost integrity and respect for the law. We are confident in our position and are vigorously defending these claims.”

C3 says Cummins hired it in 2020 to develop an application that would reduce the fuel consumption of Cummins diesel truck engines. The parties agreed that the C3 application and the project work would be hosted on Cummins servers, which meant Cummins had access to the application’s source code, the complaint alleges.

“Cummins loved C3.ai’s fuel economy optimization application. Cummins acknowledged that the application would reduce pollution and save customers hundreds of millions of dollars and valued the application at tens of millions [of dollars] annually,” the complaint says.

Under the terms of the contract, C3 alleges, Cummins agreed to pay licensing fees to use the C3 app, while C3 would retain its ownership of the intellectual property. The agreement also specified that the product and the work was to be kept confidential, and that reverse engineering of the product was prohibited.

But Cummins violated the contract by secretly hiring an AI team in India to build a replica version of the C3 technology, then terminating the C3 contract in April 2023 once that replica was built, the lawsuit alleges.

According to the lawsuit, C3 learned what was happening when Cummins accidentally copied C3 on an internal Cummins email. C3 asked Cummins to meet to discuss the situation, but Cummins refused to meet, the complaint alleges.

The legal dispute comes as Cummins, a pioneer in diesel engines, is working toward ambitious climate goals. In recent years, the company has touted its efforts to reach carbon emissions in its products and operations—efforts that include the development of hydrogen and battery-electric products. Through an effort it calls Destination Zero, Cummins aims to reach zero emissions by 2050, including shorter-term goals by 2030.

But those efforts have also hit some road bumps. In December, Cummins agreed to pay $2.04 billion in a settlement with the federal and California governments. Officials alleged that Cummins had unlawfully altered nearly a million of its RAM pickup truck engines between 2013 and 2023 to bypass emissions tests in violation of the Clean Air Act.

Cummins did not admit wrongdoing in that case.