Dramatic evidence says Uber stole data
Angry judge postpones trial amid revelations
Explosive evidence alleging that a covert Uber unit stole trade secrets and hid internal communications emerged in federal court on Tuesday in the bitter intellectual-property dispute between Waymo and Uber. U.S. District Judge William Alsup postponed the high-profile case’s trial, which had been set for next week, saying Waymo needs time to review the new evidence.
Alsup, visibly angry during Tuesday’s hearing, accused Uber’s lawyers of withholding evidence. Waymo, the self-driving car unit of Alphabet, filed suit in February alleging that the San Francisco ride-hailing company stole crucial self-driving trade secrets.
Tuesday’s courtroom fireworks came three months after Uber chose a new CEO, Dara Khosrowshahi, whose appointment was seen as giving it a fresh start after months of controversy. Instead, Khosrowshahi is confronting lingering issues from the tenure of his predecessor, Uber co-founder Travis Kalanick, who was ousted in June.
Last week, Khosrowshahi disclosed that hackers stole personal data on 57 million Uber passengers and drivers a year ago, but the company — and Kalanick, who was aware of it — failed to report the theft to authorities and affected individuals. Several states and countries are now investigating the issue. While Khosrowshahi initially was praised for coming clean, the Wall Street Journal reported that he knew about the hack two months before going public. Uber said the lag time was used to investigate how many people were affected.
Khosrowshahi is trying to navigate a $10 billion investment in Uber by Japanese conglomerate SoftBank, which would give a vote of confidence to the beleaguered company. SoftBank this week offered to buy Uber shares based on valuing the company at $48 billion, a 30 percent discount from its previous $69 billion valuation. If too few investors and employees want to sell at that price, SoftBank could walk away or raise its offer.
Kalanick’s shadow hangs heavy over the Waymo vs. Uber lawsuit. He was mentioned several times during Tuesday’s hearing and is on the witness list for the trial.
Waymo and Uber have already engaged in months of discovery and depositions. But last week, the U.S. Attorney’s office in the Northern District of California sent additional evidence to Alsup, who had previously referred the case there for possible criminal investigation. That evidence, a heavily redacted letter from lawyers for Uber’s former manager of global intelligence, Richard Jacobs, took center stage during Tuesday’s hearing.
“We’re going to have to put the trial off,” Alsup said. “If even half of what’s in that letter is true, it would be a huge injustice to force Waymo to go to trial and not be able to prove the things said in that letter.”
Jacobs, who worked on a team called Marketplace Analytics, took the stand and disavowed some of the letter’s most damning statements, while confirming others. Much of his testimony was later refuted by another witness, Ed Russo, Uber’s senior risk and threat analyst.
“Jacobs is aware Uber used the (Marketplace Analytics) team to steal trade secrets at least from Waymo in the United States,” the letter stated as read aloud by Waymo lawyer Charles Verhoeven to a packed courtroom.
“I don’t stand by that statement,” said Jacobs, who’d previously confirmed that he reviewed the 37-page document before his lawyer sent it to Angela Padilla, Uber deputy general counsel. He said he was rushed and didn’t see that statement before signing off on the letter.
The letter also stated that Uber’s Marketplace Analytics “exists expressly for the purpose of acquiring trade secrets, code-based and competitive intelligence,” Verhoeven said, quoting from the letter.
“I believe that’s a hyperbolic way to state that,” said Jacobs, but concurred that the unit’s basic purpose was competitive intelligence. It acquired code from competitors via GitHub, dug up information on drivers and researched global competitors, he said. While he didn’t believe that work was illegal, “I had questions about the ethics of it,” Jacobs testified.
Jacobs confirmed the letter’s claim that Uber offered training on how to “impede, obstruct or influence” ongoing legal investigations. Tactics included misuse of attorneyclient privilege on written documents, and encrypted, ephemeral communications — messages designed, like Snapchat, to self-destruct after a certain period of time.
The point, he said, was “to protect sensitive information and ensure we didn’t create a paper trail that would come back to haunt the company in any potential criminal or civil litigation.” Uber also used “non-attributable devices,” whose Internet connections couldn’t be traced to the company, to communicate with third parties providing on-theground intelligence about threats to Uber, and to research Uber protesters, he testified.
Jacobs said Uber abruptly demoted him after a performance review dinged him for not protecting more Uber information from discovery. He resigned, feeling he was being penalized for refusing “to buy into a culture of illegal conduct,” he said.
Uber’s lawyers characterized the Jacobs letter as a way for him to demand money. Jacobs testified that Uber is paying him $4.5 million in a severance agreement. He is still a consultant for Uber, assisting in its investigations related to lawsuits and government probes, he said.
Jacobs’ former colleague Russo, who is still at Uber, took the stand and denied the letter’s bombshell allegations. Russo said he never tried to dig up confidential information on competitors, instead relying on public materials and market research. “It was never my role to engage in theft of trade secrets,” he said.
Russo also denied the Jacobs letter’s discussion of an Uber team instructing engineers at its self-driving unit in Pittsburgh on how to cover their tracks by using self-destroying emails, falsely labeling documents as protected by attorney-client privilege, and other secretive measures.
Alsup instructed Uber’s lawyers to produce all documents related to ephemeral communications, non-attributable devices and false use of attorney-client privilege.
While no new trial date has been set, Alsup will hold another evidentiary hearing on Wednesday and said there may be additional ones next week. Uber’s Padilla, the recipient of the explosive Jacobs letter, is expected to testify Wednesday.