Waymo Gains Edge Over Uber as Driverless-Car Case Heads to Trial

(Bloomberg) -- Waymo won a ruling that may strengthen its trade-secrets suit against Uber Technologies Inc. even as the Alphabet Inc. unit fell short of its goal to bring its rival’s driverless-car program to a standstill.

U.S. District Judge William Alsup approved of Uber’s move last month to demote the engineer leading its self-driving unit to keep him away from related laser technology and safeguard secrets that Waymo alleges were stolen. In the ruling -- issued under seal Thursday and made public Monday with some redactions -- Alsup said Anthony Levandowski must remain quarantined from Uber’s work on lidar, the laser component that helps an autonomous vehicle see its surroundings.

Alsup wrote that Waymo “has made a strong showing that Levandowski absconded with over 14,000 files” from the company when he left last year to form his own startup, Otto LLC, that was then acquired by Uber.

“The record further indicates that Uber knew or at least should have known of the downloading but nevertheless proceeded to bring Levandowski and Otto on board,” the judge said. He noted that the litigation was well underway before Levandowski stepped back from overseeing Uber’s work on lidar.

Alsup stopped short of issuing a broader order stalling Uber’s program for the duration of the court battle, saying he didn’t find clear evidence that the ride-hailing company has used its rival’s technology. Still, this decision and the judge’s referral of the case on Thursday to federal prosecutors for their review should give Uber cause for worry, said James Pooley, a lawyer at Orrick in Menlo Park, California.

Criminal Implications

“The judge’s finding that Uber knew or should’ve known is particularly troublesome when you consider his order referring this to the U.S. Attorney for investigation,” Pooley said.

Uber said in a statement it’s pleased with the court’s ruling allowing it to continue building its autonomous-driving program, including its innovation around lidar.

“We look forward to moving toward trial and continuing to demonstrate that our technology has been built independently from the ground up,” Chelsea Kohler, a spokeswoman for Uber, said in the emailed statement.

Waymo also hailed the ruling as a victory, saying it would use the speedier evidence-gathering schedule ordered by the judge to “hold Uber fully responsible for its misconduct.”

Proprietary Files

Waymo claims that in October 2015, Levandowski and Uber hatched a plan for him to steal confidential information. Two months later, Waymo alleges he downloaded more than 14,000 proprietary files, including the designs for lidar technology, to his personal laptop. The next month, Levandowski quit and started Otto LLC, which Uber bought that August.

Alsup’s ruling didn’t exclude criticism of Waymo. He said the Google unit had overreached with claims that don’t amount to trade secrets, and in most instances can’t be traced to the technology at dispute. The judge also said Waymo’s patent claims are “too weak” to merit any relief in court at this stage.

The judge ordered Uber to do whatever is required to prevent Levandowski and anyone associated with him from copying or using the files downloaded from Waymo and return them to the company or the court by May 31.

Uber has told Alsup that its lawyers and investigators from cybersecurity firm Stroz Friedberg have spent countless hours looking for the files. Uber might have been doing exactly the work the judge has ordered to prepare for trial, Pooley said. Nevertheless the deadline in about two weeks poses an extra burden, he said.

The case is Waymo LLC v. Uber Technologies Inc., 17-cv-00939, U.S. District Court, Northern District of California (San Francisco).

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net.

To contact the editors responsible for this story: Elizabeth Wollman at ewollman@bloomberg.net, Peter Blumberg