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Karma Sues DeLorean Over Alleged Stolen Intellectual Property

A car company that barely sells any cars is suing a car company that doesn't sell any cars.

The newly rebooted DeLorean Motor Company has only been known to the public for about six months and it’s already facing a lawsuit. The only car DeLorean currently plans to build, called the Alpha 5, isn’t even in production and yet there’s already controversy surrounding its legitimacy. The new DeLorean Alpha 5 shares its company name with John DeLorean’s infamous mid-engine sports car but it might actually have more in common with another troubled sports car company—Karma Automotive. According to the San Antonio Press, Karma is suing the new DMC over allegedly stolen intellectual property.

Four of the top executives at this new DeLorean reboot—CEO Joost de Vries, chief operating officer Alan Yuan, chief marketing officer Troy Beetz, and VP of brand and creatives Neilo Harris—previously worked for Karma Automotive. Karma claims that those four executives took intellectual property from their time at Karma to start their own company. It’s worth noting that only a few months after de Vries left Karma, he allegedly had both the funding and engineering work done for the DeLorean Alpha 5, while the rest of the aforementioned executives were still working at Karma.

Before we discuss the lawsuit, we have to rewind to the 1990s, when England-born mechanic Stephen Wynne bought the rights to what remained of the original DeLorean Motor Company. Wynne set up shop in Texas and planned to service and restore old DMC-12s. Fast forward to 2020, Karma was proposing a “Project 88” to Wynne to build all-electric resto-mods of the original DMC-12, using DeLorean bodies with Karma electric powertrains. It was during that time that de Vries met Wynne, while the former was still at Karma working on Project 88.

Karma’s lawsuit alleges that it was during their work on Project 88 that de Vries and his team were beginning their plans to start their new venture. However, de Vries claims that the deal between Karma and Wynne fell through due to Karma’s inability to deliver. Now, though, Wynne sits on the board at de Vries’ new DMC.

“The potential Karma/DMC project died due to Karma’s inability to fund or produce deliverables necessary to even move forward talks with DMC,” de Vries said in a recent statement, according to the San Antonio Express. “DeLorean Motors Reimagined is a completely new entity with a completely new fully electric vehicle unrelated to the low volume replica project.”

These allegations come months after DeLorean announced it would be setting up shop in San Antonio. The city of San Antonio also granted DeLorean $500,000 if it can reach certain hiring goals, as well as an additional $500,000 in tax breaks over the next ten years. However, the current lawsuit doesn’t impact the deal made between the city and DeLorean. A city spokesperson told the San Antonio Express: “At this point, the lawsuit does not impact our agreement with DeLorean, as no city funds have been paid to DeLorean and none will be paid until performance milestones have been reached.”

The timeframe of de Vries and company’s departure from Karma, and the reveal of DeLorean, is certainly a bit tight. Especially considering Wynne’s involvement with Karma’s original Project 88 proposal and de Vries’ new DeLorean brand. However, there’s currently no concrete evidence that any intellectual property theft occurred. So it will be interesting to see how this lawsuit plays out.