- On Monday, Uber and Waymo will go to court over allegations Uber stole “trade secrets” relating to self-driving-car tech.
- The case hinges on Anthony Levandowski, a rockstar engineer who is accused of taking huge troves of information when he left Google and later joined Uber.
- Google is seeking damages from Uber, as well as a permanent injunction blocking it from using the tech.
- The case could have broader implications for hiring in Silicon Valley.
- Whatever happens, this isn’t the end for Uber — but it could be a major setback.
Uber and Waymo are finally about to have their day in court — and sparks are sure to fly.
On Monday, in what promises to be one of Silicon Valley’s biggest legal battles in years, the trial officially begins to determine whether Uber stole trade secrets from Waymo, a self-driving car unit owned by Google’s parent company.
The build-up over the last year has produced explosive headlines about Uber’s alleged bad behavior, and sparked debate about the appropriateness of the “move-fast-and-break-things” Silicon Valley ethos epitomized (though not coined) by the ride-hailing firm.
The Hollywood-perfect storyline pitting two tech behemoths against each other and the drama and revelations leading up to the trial, have created such a stir that Judge William Alsup, the federal judge in San Francisco overseeing the case, has had to reiterate that this is still, at its heart, a dispute over intellectual property.
“The central issues in this case remains whether or not Uber misappropriated Uber’s trade secrets, not whether Uber is an evil corporation,” he said.
Whatever the ultimate outcome, it seems unlikely to prove fatal for Uber, or even its self-driving vehicle ambitions. But when it comes to its reputation, the damage may have been already done.
And beyond the bitter conflict between Uber and Waymo, the case could have broader consequences for hiring in the tech industry’s ultra-competitive and never-ending battle for talent.
Anthony Levandowski: The big hire that caused a big headache
At the heart of the case is Anthony Levandowski, a rockstar engineer who worked on Google’s self-driving car efforts (the project that would later become Waymo) before jumping ship to start a self-driving truck startup called Otto that was subsequently acquired by Uber.
He is accused of taking huge troves of confidential Google documents with him when he left — and these trade secrets were allegedly used while he was at Uber as the company raced to develop its own “Lidar” technology, a kind of sensor used in self-driving vehicles.
A law firm Uber retained to conduct due diligence before hiring Levandowski found that the engineer had been in possession of a large stash of Google documents. But he said he destroyed them, and Uber insists they never made their way to the company’s servers.
Over the last year, the case has surfaced multiple details that paint Uber as a company in an unflattering light — most notably the bombshell “Jacobs letter” written by the lawyer of a former Uber employee. It alleged that a special team within Uber hacked into competitors’ computer systems, stole data from rivals, recorded the private conversations of competitors at a hotel, and used self-destructing messaging services.
The color and lurid details have sometimes obscured the substance of the dispute — prompting Alsup’s “evil corporation” reminder. “Waymo’s decision to devote so much time and effort to pursuing matters with so little connection to the merits [of the case] raises the possibility that Waymo is unwilling or unable to prove up a solid case … and instead seeks to inflame the jury against Uber with a litany of supposed bad facts,” he said.
Levandowski was fired from Uber in 2017 after refusing to cooperate with Uber’s legal team. He is not a defendant in the case, but will likely be called as a witness, and is expected to plead the fifth rather than answer questions.
The case could have ramifications for talent jumping from company to company
Much in this case rests on exactly how a “trade secret” is defined. Broadly speaking, it is information with economic value that isn’t known to the public or others who might obtain value from knowing it. This doesn’t, however, extended to professional skills and abilities — and it can be tricky to draw the line.
“When [engineers] move to new jobs with new employers, they cannot be expected to erase such natural on-the-job practical lessons from memory and will remain free under law to use them,” Alsup wrote in a draft of the instructions for jurors. “Engineers cannot, however, go further in new jobs with new employers to use or disclose to others specific engineering solutions or information developed by their prior employers.”
Waymo argues that Levandowski purloined trade secrets and used them to advance Uber’s lidar-building efforts — while Uber counters that it independently and properly developed all of its tech, and that Waymo’s “trade secrets” shouldn’t even be considered trade secrets in the first place.
California has historically been relaxed about the flow of talent between companies — refusing to enforce non-compete clauses in employment contracts that are intended to prevent people from working for competitors in the future. A particularly zealous approach in this case could leave engineers feeling limited in what they bring with them to new jobs, and potentially open the door to future trade secrets litigation around hiring.
“Any time you have a high profile case like this … involving contested trade secrets and the plaintiff wins I think it probably does ultimately have an impact,” Elizabeth Rowe, a professor at the University of Florida Levin College of Law, told Business Insider. “I suspect if they win that yeah, it could ultimately cause people to pause and think twice.”
Alsup has so far attempted to balance the competing demands of intellectual property and employee freedom, asking at a pre-trial hearing in November 2017: “Is an engineer supposed to get a frontal lobotomy before they go on to the next job? The answer’s got to be no, but say they know the recipe for Coca-Cola. They have to forget that before their next job.”
This isn’t a death knell for Uber, whatever happens
Waymo is seeking two things: Damages, and a permanent injunction preventing Uber from using its alleged trade secrets. If it can convince the jury that its “trade secrets” are in fact trade secrets, it will be up to the jury to determine damages, but it will be Judge Alsup who makes the decision on an injunction.
Former CEO Travis Kalanick has said that Uber’s future depends on self-driving technology — but an injunction, while embarrassing, would not be catastrophic to the company. The autonomous vehicles it currently has in the field don’t use the disputed technology, but instead rely on off-the-shelf tech from a third-party company, Velodyne.
The real cost to Uber — whatever the legal consequences — may be the massive reputational damage. Over the last year, Uber has been rocked by scandal after scandal, from allegations of workplace sex discrimination to appalling executive bad behavior, culminating in the ousting of Kalanick. Losing its fight with Waymo would be viewed by many as karmic retribution — a capstone to its sordid history.
“Uber has been playing defense throughout the litigation, both inside and outside the courtroom. While it’s made some progress cutting back Waymo’s case, Uber hasn’t yet shaken Waymo’s core allegations, nor has Uber been able to quell the nagging suspicion that Uber did something wrong here — which would be consistent with its string of high-profile gaffes in other aspects of its business,” Eric Goldman, professor at the Santa Clara University School of Law, said in an email.
“Plus, the litigation helped force Uber’s key expert on self-driving vehicles, Levandowski, out of the company, making Uber’s acquisition of his business very, very costly. “