Uber will undergo an investigation related to the accusations of trade secret theft, a U.S. judge ordered on Thursday. Alphabet’s Waymo has accused the ride-sharing company of stealing secrets related to its self-driving car programs.
Nothing going in Uber’s favor
Alphabet also succeeded in getting a partial injunction against Uber’s self-driving efforts. Further, Judge William Alsup rejected Uber’s argument that Waymo’s trade secret accusations should be taken ahead in private arbitration, reports Reuters. Uber previously asserted that there should be an arbitrator and not a jury to decide whether there is some strength in Waymo’s accusation of a key engineer stealing trade secrets and giving them to Uber.
Alsup noted that since Anthony Levandowski was not a defendant in the case, Uber cannot use his arbitration agreement with Waymo to discuss the trade secrets claims in the private forum. Another thing that has worked against the ride-sharing company is Levandowski’s refusal to testify. He invoked his constitutional right against self-incrimination.
Michael Mauboussin Tips From Great Investors [Pt.2]
This is the second part of a short series on Michael J. Mauboussin's research document reflecting on 30 years of Wall Street analysis published in 2016. Q3 2020 hedge fund letters, conferences and more The document outlined Mauboussin's observations of successful investors throughout his three decades on the Street. This article starts at point six. Read More
“Even though he is not a defendant here, moreover, Levandowski’s assertion of his Fifth Amendment privilege has obstructed and continues to obstruct both discovery and defendants’ ability to construct a complete narrative as to the fate of Waymo’s purloined files,” the judge noted.
Further, the judge ordered that the case should be referred to the United States attorney for investigation of the alleged theft of the trade secrets. Although the judge did not clarify whether the criminal charges are warranted, during the hearing last week, he did make it clear that Waymo has a very strong case against Levandowski, who has been accused of downloading as many as 14,000 technical documents from an internal Google server six weeks before he left the company, notes Forbes.
During the May 3 hearing, Alsup said there is no doubt that the downloading was done, adding, “You [Waymo] have one of the strongest records I’ve seen in a long time of anyone doing something that’s bad. Good for you.”
Waymo vs. Uber: what’s the lawsuit about?
Immediately after the ruling, Waymo said in a statement, “This was a desperate bid by Uber to avoid the court’s jurisdiction. We welcome the court’s decision today, and we look forward to holding Uber responsible in court for its misconduct.”
The lawsuit filed by Google spin-off Waymo mainly accuses Levandowski, a veteran of self-driving technology, of stealing trade secrets from Google. After leaving Google, Levandowski started his own autonomous-vehicle start-up. Waymo accuses Uber and Levandowski of being partners in crime and stealing the files after the ride-sharing company purchased the start-up for $680 million.
Waymo has filed a separate arbitration against Levandowski and his partner Lior Ron, accusing the two former Google employees of using confidential salary information to break out employees into their self-driving start-up Otto.
There are reports that Uber’s software engineers are already hunting for jobs elsewhere, as they fear the lawsuit could go against the company. All these engineers are usually working in Uber’s self-driving technology division, according to Recode.