Uber could face federal charges over alleged theft of Waymo trade secrets

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The legal case brought by Alphabet’s Waymo against Uber for allegedly stealing self-driving car secrets is set to go to trial. Judge William Alsup, presiding over the case, denied Uber’s request for arbitration on Thursday. That means the case will go to court, but the judge also recommended that the case go to federal prosecutors to investigate whether Uber is guilty of theft. The US Attorney still has yet to accept the case, but if it does and Uber is found guilty, it could face criminal prosecution.

Waymo filed the explosive lawsuit in late February, claiming that Anthony Levandowski, a former Google engineer and current vice president at Uber, had stolen 14,000 confidential documents — or 9.7 gigabytes of data — before leaving Google. Among the documents were trade secrets and patents, including Waymo’s proprietary LIDAR system, the company claims.

According to Waymo, Levandowski used the stolen technology to entice Uber into buying his self-driving truck startup Otto for $680 million six months after it launched in 2016. Uber called the allegation “baseless,” but recently was forced to admit that Google’s self-driving technology was superior to its own. (Levandowski recently stepped aside as head of Uber’s self-driving car unit.)

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. But Waymo instead brought the case against Uber, while filing a separate case for arbitration against Levandowski over allegedly poaching Google employees.

The judge struck down Uber’s approach, saying that Waymo was within the law to pursue the case outside arbitration. “Defendants have repeatedly accused Waymo of using ‘artful’ or ‘tactical’ pleading to evade its arbitration obligations by omitting Levandowski as a defendant,” Alsup said. “These accusations are unwarranted.”

“Waymo has honored its obligation to arbitrate against Levandowski by arbitrating its claims (concerning employee poaching) against Levandowski. Its decision to bring separate claims against defendants in court was not only reasonable but also the only course available, since Waymo had no arbitration agreement with defendants,” the judge wrote in court documents. Alsup also noted that Levandowski’s exercise of his Fifth Amendment rights “has obstructed and continues to obstruct both discovery and defendants’ ability to construct a complete narrative as to the fate of Waymo’s purloined files.”

Waymo responded favorably to Alsup’s decision, indicating that it would continue to keep up the pressure on its rival. “This was a desperate bid by Uber to avoid the court’s jurisdiction. We welcome the court’s decision today, and we look forward to holding Uber responsible in court for its misconduct,” a spokesperson said.

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It’s not clear yet whether the US Attorney will indeed take up the case, or whether Uber would be found guilty in a criminal case, but it wouldn’t be an ideal situation for a company that has found itself in hot water lately in both the courts of law and public opinion. It wouldn’t even be Uber’s only federal investigation this year, after the Justice Department reportedly started inquiring into the company’s use of the controversial “Greyball” software that allegedly identified government workers.

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