Daily Archives: September 27, 2022

WILMINGTON, Del., Sept 26 (Reuters) - Billionaire Elon Musk's tendency to dish out insults while being questioned under oath will be tested anew this week, when lawyers for Twitter Inc (TWTR.N)are expected to interview the Tesla Inc (TSLA.O) CEO about his abrupt decision in July to ditch his $44 billion deal for the social media company.

Testifying in past legal battles, the world's richest person has called opposing attorneys "reprehensible," questioned their happiness and accused them of "extortion." He asked one attorney if he was working on a contingency because the lawyer's client was allegedly behind on child support payments.

"So probably you're on a contingency or you're taking that kid's money. Which is it?" Musk asked a lawyer for a whistleblower in a case against Tesla, according to a transcript of the 2020 deposition.

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The high-stakes Twitter interview is closed to the public. A court filing last week said the Musk deposition was scheduled to begin on Monday and run into Wednesday, if needed. Sources with knowledge of the deposition said Musk was not questioned on Monday and they did not know what day it would begin nor did they give a reason for the delay.

Musk's lawyers will want to keep him focused on answering questions, but that can be a challenge with such a smart and opinionated witness, said James Morsch, a corporate litigator who is not involved in the court battle.

"I would compare it to trying to hold a tiger by his tail," Morsch said.

In a 2019 deposition in litigation over Tesla's takeover of solar-panel maker SolarCity, Musk refused five times to answer one of the initial questions because of the way it was worded, the transcript shows.

"We can stare at each other until you rephrase it," Musk told opposing attorney Randall Baron, according to a transcript.

"I'll guess we'll just cancel this deposition," Baron responded. Baron suggested that he would seek an order from the judge directing Musk to answer questions, which seemed to get things moving.

Twitter declined to comment and Musk's legal team did not immediately respond to a request for comment.

Twitter's attorneys are expected to use the interview to try to show that Musk abandoned the deal due to falling financial markets and not because the company misled him about the real number of users or hid security flaws, as he alleged.

Musk wants a judge to allow him to walk away without penalty, while Twitter wants an order forcing him to buy the company for $54.20 per share. Twitter's stock ended up 0.4% at $41.58 on Friday.

A five-day trial is scheduled to begin on Oct. 17 in Wilmington, Delaware.

Dozens of depositions are scheduled in the case, including of Twitter CEO Parag Agrawal, as each side questions witnesses and gathers evidence to make its case.

Agrawal was scheduled to answer questions from Musks lawyers at a law firm in San Francisco starting at 9 a.m. local time on Monday, according to a court filing, although sources said that deposition was also postponed and did not give a reason.

Twitter co-founder and former Twitter CEO Jack Dorsey was scheduled to be deposed last week.

Musk at times has shown in his depositions the charm and wit he deploys on Twitter, where he has built a cult-like following.

The Twitter deposition atmosphere could be especially fraught. Its legal team includes the firm of Wachtell, Lipton, Rosen & Katz, and the main lawyer on the case, Bill Savitt, initially represented Musk and Tesla in the SolarCity deal, although not during discovery and depositions in the litigation.

Savitt did not respond to a request for comment.

Twitter is also represented by Wilson Sonsini Goodrich & Rosati.

A constant in the three depositions reviewed by Reuters is Musk's dislike of attorneys representing the opposing side, who he accuses of "trickery" and pursuing him merely for money.

"I heard yesterday that 3% of the U.S. economy is legal services. That's one of the saddest facts I've heard in a long time," Musk said to Baron, the lawyer in the SolarCity deposition.

The deposition in the litigation with the Tesla whistleblower, Martin Tripp, who accused the company of wasting raw materials, began with Musk being asked if he understood the oath he took to testify truthfully.

"This sounds like some sort of legalese, semantic argument. The -- what is the whole truth of something?" asked Musk, according to the transcript. "You say, 'Is that a tree? What kind of tree is it? Is it a tree with lots of leaves?' Or is -- if you're saying something is a tree is the whole truth? No, of course not."

Tripp's attorney reminded Musk that the judge warned he would oversee the deposition in person if questions weren't answered properly.

"Do you intend to comply with the judge's admonition there?" asked attorney William Fishbach.

"Of course," Musk said.

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Reporting by Tom Hals in Wilmington, Delaware; Additional reporting by Hyunjoo Jin in San Francisco; Editing by Amy Stevens and David Gregorio

Our Standards: The Thomson Reuters Trust Principles.

Thomson Reuters

Award-winning reporter with more than two decades of experience in international news, focusing on high-stakes legal battles over everything from government policy to corporate dealmaking.

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Twitter to interview Elon Musk, known for combative testimony - Reuters

Patents are for the weak retorted Elon Musk to veteran broadcaster Jay Leno while giving him a tour of SpaceX. Leno, during the latest episode of Garage, had asked Musk if he had patented his engines, which the worlds richest person described as the most advanced ever made.

Musk went further still on intellectual property, adding patents dont actually help advance things, they just stop others from following you. Theres a touch of hypocrisy here given the patent portfolios Musk has amassed for Hyperloop and Tesla.

Hes also wrong.

Its easy for Musk to dismiss the value of patents. The man and his money have established a dominant position in the space engineering sector, faced with little competition, where exclusion from the market is the absence of funding rather than patent thickets.

However, if youre a founder of a tech startup looking for funding, its a fundamentally different story and it isnt what you believe in its what others believe in that counts.

Think about it this way. IP protection and patents should be considered from the well-established maxim that the customer is always right. Often, founders will determine what technology customers need, develop it, make it, and then sell the technology to those customers.

This same logic applies to seeking investment: investors will want certainty around the protection enjoyed by innovation that theyre committing to. A successful exit is likely to turn on having IP. If youre a founder that approaches an investor without a sensible IP strategy in place, this restricts your ability to play the long game to reach a successful exit and limits your potential pool of investors along that path. Patents may well be the answer and that is not a sign of weakness.

After all, if an investor is pouring millions into your company, it only makes sense that theyd expect the innovation to be protected. Its not just a game either. Many economists believe that between 80% and 90% of a companys value lies in its IP from this figure alone, its already obvious that patents arent for the weak theyre for the investment-savvy.

Funding a startup tends to begin with founders asking friends and family for money until they eventually have to approach professional investors, who will most likely employ an IP lawyer to conduct IP due diligence.

Most tech investors insist on having a cohesive IP strategy, to provide a degree of exclusivity, and to support valuation on exit. They dont want to fund R&D just for the sake of it there is no money in that!

Some founders see patents to be an expensive internal distraction and a game that has to be played out to some extent to appease their investors. However, this is a total fallacy. In many cases patents are ultimately where your value as a company lies, or at least thats what the investor or any potential acquirer will believe. The time spent investing in a robust patent strategy from the beginning will see a return on that investment later.

Filing a patent application isnt always straightforward. Often, founders run the risk of filing too early to satisfy due diligence demands, despite certain ideas and innovations not being fully developed.

Theres also the case for trade secrets when it comes to developing a robust IP position. This is why its vital for founders to keep their powder dry, and their options open, until theyre ready to file a patent application and only file if it is the right thing to do. The use of trade secret protection instead of a patent isnt a weakness either.

Timing is everything, and for a patent to present a true competitive advantage, founders must consider three questions: whats the innovation? Whats the best way to protect it? When should we act? These questions are becoming increasingly important in the increasingly competitive funding environment where investors are doing more focused due diligence and becoming pickier.

These issues dont concern Musk; he has his huge pool of privately funded investment on tap. However, more traditional startup founders must come armed with their competitive advantage, which more often than not lies in a protected idea and commerical IP strategy.

Peter Finnie is partner and patent attorney at IP law firm Potter Clarkson.

Image credit: Daniel Oberhaus (2018) via Flickr.

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Elon Musk is wrong about patents. Here's why IP isn't 'for the weak' - UKTN (UK Technology News

Tesla Chief Executive Elon Musk stands on the podium as he attends a forum on startups in Hong Kong, China.

Bobby Yip | Reuters

Elon Musk has run two ambitious tech companies at the same time ever since he became chair and later CEO of electric vehicle maker Tesla while also leading SpaceX, his reusable rocket and satellite internet business.

He went on to launch a computer-brain interface startup, Neuralink, and a drilling business called Boring Co. in 2017, and is in the midst of a contentious lawsuit with Twitter over a buyout gone awry.

With his attention divided, Musk relies on a large team of deputies more than 20 people today to keep business rolling at Tesla. His cast of direct reports shifts often with strategic or organizational changes, occasional "spot firings" by the mercurial CEO, and resignations.

Here are the direct reports we know about as of September 2022. The data was gathered from interviews with current and recent Tesla employees, LinkedIn profiles, internal and public records from Tesla, and may not include all of the people who report to him.

Headcount numbers are approximate and refer to the number of people each of Musk's direct reports was managing as of early September.

About 22% of the CEO's direct reports are now based in Texas, around half are still based in California, and more than 90% are men.

Musk will need to lean on these deputies as Tesla works to bring its new factories in Gruenheide, Germany, and Austin, Texas, to full production, and to demonstrate progress on his many other goals.

Musk has told shareholders and fans that Tesla will "solve Full Self-Driving" this year, improve vehicle service and repairs, and start deliveries of the experimental Cybertruck pickup by midyear 2023. He also said that Tesla would shore up its battery-manufacturing capabilities to be able to produce 100 gigawatt-hours worth of 4680 batteries on its own this year, enough to power more than 1 million of its cars.

Musk's direct reports have also recently needed to navigate through headcount reductions amid uncertain economic times.

The CEO abruptly announced a steep cut to the Tesla workforce at the end of May during a challenging second quarter that was marked by Russia's invasion of Ukraine and Covid-19 outbreaks in China.

In June, Tesla closed an entire Autopilot office in San Mateo, California, and dismissed at least some employees who were previously authorized for remote work but who did not agree to an order by Musk to work at a Tesla office at least 40 hours per week. The CEO cited a"super bad feeling"about the economy in an e-mail to Tesla staff in June.

Tesla's former senior director of artificial intelligence, Andrej Karpathy, was not among those who Musk laid off or fired, however he announced his resignation from the company formally in July. Autopilot leader Ashok Elluswamy is reporting directly to Musk for the time being.

Other Musk direct reports who parted ways with Tesla in 2022 have included former Nevada Gigafactory VP Chris Lister, as CNBC previously reported, and Jean Frazier, who was Tesla's senior director of employee relations, according to internal documents viewed by CNBC.

David Searle, who previously headed up Tesla's legal department, is still employed there, records indicate. Insiders said they expect Searle to leave in coming months as he previously managed more than a dozen employees, and now has only one direct report listed on internal organization charts.

According to public and internal records, Senior Director of Legal Dinna Eskin is now acting as the manager of Tesla's legal department and is effectively the company's general counsel. Tesla hasn't employed a person with the title of general counsel officially since late 2019.

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Elon Musk has more than 20 direct reports at Tesla here are the ones we know about - CNBC

Billionaire Elon Musk backed a prominent Wharton economist who accused the Federal Reserve and its chairman Jerome Powell of completely botching their response to the current economic slump.

Musk reacted to a fiery rant from Wharton professor Jeremy Siegel, who told CNBCs Halftime Report on Friday that the Feds current policy path is way too tight and makes absolutely no sense to me whatsoever.

Siegel, who admitted he was very upset about the Feds handling of the situation, accused Powell and his colleagues of waiting far too long to hike interest rates. Now, Siegel argued, the Fed is tanking the economy by being too aggressive with rate hikes despite signs inflation is already easing.

Its like a pendulum. They were way too easy, as Ive told you and many others, through 2020, 2021, Siegel said. And now, Oh my God, were going to be real tough guys until we crush the economy. Poor monetary policy would be an understatement.

Siegel is obviously correct, Musk tweeted on Saturday in response to a clip of Siegels rant.

Siegel accused Powell of ignoring several economic indicators, including falling commodities prices, a slowdown in the US housing market and declines in money supply.

Musk is among many business leaders who have held a pessimistic view on the state of the US economy in recent months. In June, Musk teed up layoffs at Tesla while warning he had a super bad feeling about the economic outlook.

Earlier this month, Musk joined others in warning that the Fed risked causing deflation, or a damaging collapse in prices, by hiking rates too aggressively despite a slowing economy.

The stock market has plummeted deeper into bear territory since last week, when the Fed implemented a super-size interest rate hike for the third straight month. Central bank officials indicated that further sizable increases are likely in the months ahead a sign the Fed is maintaining a hawkish course to combat decades-high inflation.

Thats despite warnings from Siegel, Musk and others that the Fed could steer the economy into a lengthy downturn. US GDP has already declined for two consecutive quarters the widely held definition of a recession.

Last week, Powell reiterated that the Fed planned to raise its benchmark to a restrictive level and keep it there for some time until meaningful signs that inflation had receded.

Powell admitted the stance would likely result in job losses and a major correction in the US housing market.

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Elon Musk says it's 'obviously correct' that Fed is tanking US economy - New York Post

Tesla Inc. TSLA and SpaceX CEO Elon Musk on Sunday posted a picture of himself with former girlfriend Grimes, in costumes they donned for a Saturday Night Live episode in May 2021.

What Happened: Musk is seen in the costume of Mario arch-rival Wario while Canadian singer Grimes is portraying Princess Peach.

The worlds richest person contrasted the picture with one of animated Mario and Princess Peach sitting at the edge of a Castle's roof. "Of course, there's no way to prove we're living in a simulation," the accompanying text reads.

Why It's Important: This isnt the first time that Musk has teased the possibility of us living inside a simulation.During an episode of the Joe Rogan Experience podcast in 2018, Musk said were most likely in a simulation, the NBC News reported at the time.

If you assume any rate of improvement at all, games will eventually be indistinguishable from reality, Musk reportedly said before concluding.

Musk again teased the idea in a tweet in November last year based on the 1972 video game Pong. 49 years later, games are photo-realistic 3D worlds. What does that trend continuing imply about our reality?, the billionaire quipped.

The simulation hypothesis has other prominent proponents, including astrophysicistNeil deGrasse Tyson.

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Elon Musk Shares Photo Of Himself And Grimes: 'No Way To Prove We're Living In A Simulation' - Tesla (NAS - Benzinga