Uber lawyers rebuked as trade-secrets trial delayed
ALETTER that detailed a secretive effort at Uber to gather intelligence on competitors and cover its tracks has the ride-hailing company on the defensive in a legal fight that has gripped Silicon Valley since February.
On Tuesday, the discovery of the letter caused a federal judge to delay a trade-secrets trial – a day before jury selection was set to begin – between Uber and Waymo, the self-driving car unit of Google’s parent company, Alphabet.
Judge William Alsup of US District Court in San Francisco was alerted to the letter’s existence by the US attorney’s office in Northern California. The judge accused Uber’s lawyers of withholding evidence, forcing him to delay the trial until Waymo’s lawyers could gather more information.
“I can no longer trust the words of the lawyers for Uber in this case,” Alsup said. “If even half of what is in that letter is true, it would be an injustice for Waymo to go to trial.”
Waymo sued Uber in February, claiming that a former engineer, Anthony Levandowski, conspired with Uber to steal trade secrets from Waymo. On Tuesday, Alsup repeatedly rebuked Uber’s lawyers for not sharing the document with the court. “You should have come clean with this long ago,” he said.
The letter was written in May or June by a lawyer for Richard Jacobs, a former Uber employee, to Angela Padilla, deputy general counsel at Uber. Uber hired Jacobs in March 2016 as its manager of global intelligence and fired him in April of this year, Jacobs testified in court on Tuesday. He is now a paid security consultant for Uber, after receiving a $4.5 million settlement following his dismissal.
In discussions with other Uber em- ployees, Jacobs testified, he learned of an internal organisation that gathered trade secrets, code and other information about its competitors. It was called the “marketplace analytics team”. according to the letter, redacted by Uber. The group frequented the code-sharing site GitHub, searching for private material that may have been accidentally revealed by competitors.
This Uber team also led efforts “to evade, impede, obstruct, influence several ongoing lawsuits against Uber”. The team also tried to find out what other companies were doing. And in 2016, Uber hired a man named Ed Russo to help recruit employees of competitors.
This group relied on “anonymous” servers separate from the rest of the Uber network, and some employees were expected to rely on devices that encrypted or automatically deleted messages after a certain amount of time, Jacobs testified.
This system, Jacobs said in his testimony, “was to ensure there was no paper trail that would come back to haunt the company”.
Jacobs said this effort focused solely on overseas competitors and that he was not aware of the unit obtaining trade secrets from Waymo or other competitors in the US. That contradicted an assertion in his letter, which said he was aware this team had at least stolen trade secrets from Waymo.
Waymo claims in its suit that Levandowski downloaded more than 14,000 confidential files from company servers before leaving the Alphabet unit and eventually joining the autonomous vehicle project at Uber.
The involvement of the US attorney’s office is a peculiar twist, because federal prosecutors do not usually get involved in civil trials. The inclusion of the letter suggests that federal authorities discovered it during their own investigation into Uber’s business practices.
What the US attorney’s office is investigating is unclear.
“The evidence brought to light over the weekend by the US attorney’s office and revealed, in part, today in court is significant and troubling,” said Johnny Luu, a Waymo spokesman. “The continuance we were granted gives us the opportunity to fully investigate this new, highly relevant information.”
This is not the first time the US attorney’s office has been involved in the case. Earlier in the year, Alsup, citing what he said was compelling evidence against Levandowski connected to the theft of trade secrets, referred the matter to federal authorities.
In May, Uber fired Levandowski after he failed to turn over evidence related to the suit, citing his Fifth Amendment right not to incriminate himself.
An Uber spokeswoman said nothing that Jacobs said on Tuesday impacted the merits of the case against the company. “Jacobs himself said on the stand today that he was not aware of any Waymo trade secrets being stolen,” said Chelsea Kohler, the company spokeswoman.
The systems Jacobs described seemed to mirror those uncovered by reporters over the past year. In April, it was revealed that Uber used an elaborate system to track and sabotage Lyft, a top competitor in the ridehailing business.
The program, known inside Uber as Hell, helped the company locate drivers who also drove for Lyft, allowing it to offer financial incentives to get drivers to work for Uber instead.
The letter from Jacobs’ lawyer, parts of which were read in court, also said three Uber employees had gone to Pittsburgh to instruct the company’s autonomous vehicle group, which is testing self-driving cars in the city. The research group was told to use the special communication practices with the Uber security group to prevent sensitive information from emerging in potential legal disputes.
Jacobs said in testimony on Tuesday that an outside company had supplied Uber with devices for hiding communications. The company also ran a separate effort to hide communications via Wickr, a service that deletes communications after a given amount of time, he said.
Alsup asked Uber’s lawyers to supply an unredacted copy of the letter from Jacobs’s lawyer and a list of all Uber employees who used the Wickr service, including employees with the autonomous vehicle group in Pittsburgh. The judge also said he was considering making the entire letter public.
Russo, who works on Uber’s security team, provided an alternative version to the events Jacobs described. In testimony on Tuesday, Russo said the team did not gather information from people at competitors and did not steal trade secrets. Russo acknowledged he had worked with some of the security companies that Jacobs mentioned during his testimony.
Jacobs testified that Uber demoted and later fired him after he refused to embrace the company’s security techniques. Two people familiar with his employment at Uber, however, said he was discovered downloading files that he was not authorised to access on Uber’s network, an offence the company considered cause for dismissal.
Jacobs said he later reached the $4.5 million settlement with Uber that stipulated he would not discuss the company’s practices with the media, but he believed that this did not prevent him from discussing the situation as a part of a criminal investigation. Jacobs travelled by plane from Seattle for the hearing, and he testified that Uber paid his way.