intellectual property

Trade secret theft in tech: Waymo vs. Uber

Waymo v Uber

The background to this case is that Alphabet, the holding company formed by Google to contain companies like Waymo (short for ‘a new way forward in mobility’ and which was initially a division within Google dedicated to automated cars) employed Anthony Levandowski as one of the main engineers in charge of Waymo’s self-driving-car efforts. Levandowski, left the company in early 2016 to start his own company, Otto, to focus on automating long-haul trucks. Otto was later acquired by Uber for $680 million. After Levandowski leaving, Waymo conducted an investigation shortly after and found out that Levandowski had downloaded thousands of documents to a personal hard drive from its servers and attempted to cover his tracks by reinstalling his operating system.

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In December 2016, a vendor sent an email to Waymo meant for Uber who thought the designs for Uber’s self-driving car’s LiDAR (short for Light Detection and Ranging) equipment looked suspiciously similar to what Waymo (and Levandowski) had been working on. In February 2017, Waymo filed a case against Uber. The full details of the case aren’t known, as the relevant orders are sealed. However previous hearings show that Google has strong evidence that Levandowski illegally downloaded 14,000 files while he was employed at Waymo. Uber didn’t deny the downloads occurred, and Levandowski asserted his Fifth Amendment rights rather than answer questions.

A further blow came in 11 May 2017, in which a court ruled that Uber wouldn’t be allowed to move Waymo’s trade secrets lawsuit into arbitration as prayed by Uber based on Levandowski’s employment agreements with Waymo. This is because, while Levandowski was an employee of Waymo and having signed employment agreements in 2009 and 2012 to the effect that disputes would be referred to arbitration, the judge held that Uber and Otto were not signatories to that agreement and therefore the arbitration clause could not be triggered to Uber’s favor. This shatters Uber’s hopes of trying to resolve it quickly and quietly making it ripe for media attention. Further, Uber’s automated car business has been put on hold with a preliminary injunction and Levandowski could face possible jail time for theft of trade secrets if found guilty.

There’s still a lot of uncertainty around all of this — both Uber and Waymo have fair amount of legal options still available to them including, of course, Uber settling out of court, though that seems wildly unlikely at this point. The author will be on the look out for developments in this case.

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