Judge refers theft allegations against Uber to US Attorney

Posted May 13, 2017

Judge Alsup said in his order Thursday that the evidence thus far led him to refer the case to federal prosecutors.

In March, Waymo pushed for a preliminary injunction to stop Uber and Otto from using the trade secrets and infringing its patents. The scope of Alsup's ruling remains unclear, though; his full decision on the injunction remains under seal because it contains confidential information.

Waymo's suit alleges that a former employee, Anthony Levandowski, stole 14,000 files full of self-driving auto trade secrets when he moved on to found his own self-driving vehicle company, Otto, which Uber later acquired for $680 million.

The judge's squeamishness about Uber's litigation gamesmanship is nowhere near the top of the company's long list of legal problems, which already includes a criminal investigation of its alleged use of software to help drivers evade transportation regulators as well as this case and class actions by drivers and passengers.

After leaving Google previous year, Levandowski's self-driving truck start-up, Otto, was soon acquired by Uber - which, Waymo alleged in court proceedings, was a ruse to help Uber get its hands on Google's self-driving secrets. Uber later purchased Otto for $680 million. The former Waymo employee has invoked his right against self-incrimination and, therefore, can not testify on Uber's behalf.

Uber declined to comment.

Uber's argument hinged on a clause in the contract between Levandowski and the company, which said that any future cases between Uber and the engineer's former employer should be settled in arbitration. According to Alsup, Uber's claims that Waymo used all sorts of tricks to avoid arbitration by not listing Levandowski as a defendant were groundless. "You don't have any smoking gun", he said. That's a major setback for Uber, as private arbitrations are normally cheaper and quicker, don't become public record, and don't occur before a jury. "They're going to hear about the downloads".

Waymo is represented by Charles Verhoeven with Quinn Emanuel Urquhart & Sullivan; Uber by Arturo Gonzalez with Morrison & Foerster, both in San Francisco. Some critics have said the move is just about "optics".

Uber has been battered by negative publicity this year.

People outside the Uber offices in Queens, New York, U.S., February 2, 2017. While outrage toward Uber over the taxi strike was misguided, the #deleteUber hashtag it spawned lives on.

"Neither proceeding has anything to do with Waymo's claims of trade secret misappropriation against defendants here", writes Alsup.

Experts say prosecutors are likely to follow up on Alsup's order and launch an investigation.

Uber called the denial of arbitration unfortunate, saying in a statement: "We remain confident in our case and welcome the chance to talk about our independently developed technology in any forum". The referral of the case to the US Attorney would seem to raise the stakes on that issue.

Waymo, unsurprisingly, was more optimistic.

Waymo's lawsuit accusing Uber of stealing trade secrets will play out in public court after all.

Uber said in a statement to AFP that it would not comment on the injunction, adding that "the order is now under seal so we can't speculate about what it says".