A legal fracas that could test Silicon Valley’s spirit
Uber and Google’s Waymo can voice their thoughts on what constitutes trade secrets
fter nearly a year of legal wrangling, dramatic lastminute delays and uncooperative witnesses, a jury will soon hear arguments in Waymo’s high-profile lawsuit accusing Uber of stealing driverless car technology.
The trial, which started with jury selection in the US District Court, Northern District of California, pits Waymo, a spin-off of Google and one of the most successful companies from the dot-com boom, against Uber, the ride-hailing giant and today’s most valuable start-up. At stake is a leading role in the intense competition among tech and auto companies to create autonomous vehicles.
The dispute hinges on the actions of a former star engineer at Google who started his own company and then sold it to Uber within a year. Did he steal thousands of Google computer files as he headed out the door and bring those files with him to Uber? The courtroom fight will most likely prompt a philosophical discussion over the entrepreneurial — some would say outlaw — spirit that has long made Silicon Valley tick.
Should an engineer be free to leave a company and build on the knowledge and skills he gained at the old job? Are the tech industry’s giants too eager to use lawyers to cudgel competition? And are start-ups like Uber too willing to cut corners as they scramble to turn a profit?
The case is a “perfect storm” because it involves two high-profile companies competing in a hotlycontested but nascent field, said Jeanne Fromer, a law professor at New York University who specialises in intellectual property. There aren’t many people with the expertise that self-driving cars demand, so the line between an engineer’s knowledge and a company’s trade secret is thinner than usual.
“Figuring out what’s on one side of the line and what’s on other side is incredibly complicated,” she said.
Waymo has accused Uber of colluding with Anthony Levandowski — an early engineer on Google’s self-driving car team who left the company in January 2016 — to steal information about the project. Waymo’s legal argument relies on a lesstravelled area of intellectual property law: trade secrets.
Valuable information
Unlike publicly filed patents, trade secrets are, well, secret. They are defined as valuable information that is not generally known and is protected by the company from getting out, like the recipe for Coca-Cola. But because trade secrets can be hard to define, they raise questions about the line between an employee’s skill or knowledge versus intellectual property belonging to an employer.
Waymo, which started under the Google banner before being spun off as a separate entity, spent years and more than $1 billion on research and development of driverless cars. The technology was so new when Waymo entered the field in 2009 that it had to devise everything from the ground up, including what sensors to use, how to move sensor data into software and how to test it all.
It was a long and tedious process requiring much experimentation to see what worked and what didn’t. Some of those lessons are still considered valuable and closely guarded secrets at Waymo — secrets the company says Uber would have to tap into to meet the ambitious financial targets it has set for Levandowski.
Waymo has said Uber misappropriated eight of its trade secrets, most of them having to do with LIDAR — an abbreviation for “light detection and ranging” — devices that measure distances using lasers. Such sensors The case is a “perfect storm” because it involves two high-profile companies competing in a hotly-contested but nascent field. are critical in the operation of autonomous vehicles. One of the eight secrets was a “negative trade secret” — a term for a valuable lesson about what does and doesn’t work that was learnt through time-consuming trial and error.
Uber says that what Waymo claims are trade secrets actually aren’t. Uber is expected to argue that it developed all its autonomous vehicle technology and know-how independently and that the information Waymo claims are trade secrets are generally known or ascertainable by Uber’s own experts.
It is a position that the start-up spirit of is fitting with Silicon Valley, where engineers move freely from company to company, taking what they know with them. A free flow of ideas and personnel can open the door to claims of theft or copying, but technologists often look down on companies that resort to legal action to kneecap a competitor.
In a pretrial proceeding with lawyers for Uber and Waymo, Judge William Alsup, who will preside over the trial in federal court, pressed them on how to protect the rights of engineers to advance their careers elsewhere if their former employers designate “everything in the universe” as a trade secret. He cited a hypothetical example of an engineer who learnt the best way of doing something through trial and error.
When that engineer moves to another company and is assigned that same task, will that person need to “reinvent the wheel” and go through all the experiments again to make sure they are not using a former employer’s trade secrets? “Is an engineer really supposed to get a frontal lobotomy before they go to the next job? I think the answer has to be no,” Alsup said.
Uber’s lawyers are expected to argue that even if the knowledge amounted to trade secrets, it was not misappropriated, because — among other reasons — Waymo didn’t do enough to keep its secrets secret. Besides, Uber can point out that it didn’t benefit from any potential trade secrets because autonomous vehicles are still in development.
Uber will do its best to distance itself from Levandowski, who was in charge of the ride-hailing company’s autonomous vehicle team when he was fired in May 2017 for refusing to cooperate with its legal defence. Uber has said it repeatedly told Levandowski not to bring along any Google intellectual property after it bought Ottomotto, the company he started after leaving Google. Uber insists any computer files Levandowski may have possessed from his time at Google never reached its computer servers.
For all the philosophical arguments about trade secrets and the role they may play in Silicon Valley’s labour mobility, this case might boil down to the actions of Levandowski. His willingness to bend the rules seems extreme even by Silicon Valley’s standards.
Waymo claims — and Uber does not dispute — that Levandowski downloaded 14,000 files before leaving Google and received a $120 million bonus from his former employer. At the time, he was already meeting regularly with Uber and Travis Kalanick, the company’s then-chief executive, and had not officially founded his own firm, Ottomotto. Levandowski is not a defendant in the suit.
In a deposition in July, Larry Page, chief executive of Alphabet, the parent company of Google and Waymo, was asked about the decision to pay Levandowski a massive bonus. Page acknowledged that Levandowski had played “a significant role” in the history of the project, but was a headache for management by the time he left.
When Uber announced the acquisition of Ottomotto for a reported $680 million, Levandowski had already been consulting with Uber for months. Even during his nine-month stint with the ride-hailing company, Levandowski demonstrated a willingness to push the envelope when he defied state regulators and forged ahead with autonomous vehicle testing on the streets of San Francisco.
When called to testify, Levandowski is expected to exercise his Fifth Amendment right to avoid selfincrimination. He hasn’t cooperated with Uber’s lawyers, and Alsup has referred Levandowski to the federal prosecutors for possible theft of trade secrets. While it’s not clear whether the Justice Department is investigating his actions, federal investigators confirmed it was looking into Uber’s business practices.
After he was fired, Levandowski announced he would start a religion worshipping a Godhead based on artificial intelligence. “Let’s stop pretending we can hold back the development of intelligence when there are clear massive short term economic benefits to those who develop it and instead understand the future and have it treat us like a beloved elder who created it,” reads the passage on the website for “Way of the Future.”.