Is Waymo’s IP in Uber’s hands? They may both be victims

For the past four-plus months we have been reading about the dust-up between Uber and Google’s Waymo concerning the alleged theft of intellectual property (IP) by Uber from Waymo. Waymo is accusing their former technology lead, Anthony Levandowski, of taking approximately 14,000 documents with him as he left the company and started a competing technology company, Otto. Otto was subsequently purchased by Uber for $680 million, and the purchase included the hire of Levandowski.

Last month, the court referred the lawsuit to the Department of Justice to determine if criminal wrongdoing had occurred, i.e., the theft of Waymo’ IP.

The court went on to place Uber between the rock and the hard spot when it demanded Uber force Levandowski to return any Waymo IP. Thus the judge in this case painted Uber into the corner: Comply or be held in contempt. They chose to comply, and to do so would require Levandowski to answer the question on the theft of Waymo IP. Levandowski’s attorney advised him to invoke his fifth amendment right and not answer questions that may self-incriminate.

Uber fired Levandowski last week for noncompliance with a company directive to either deny taking Waymo’s IP or return the IP. Levandowski did neither and now finds himself on an island by himself. 

One executive, two victims 

This may be a tale of two victims: Waymo, which alleges they lost their intellectual property, and Uber, which is coming to realize they may have Waymo’s IP within their autonomous vehicle solution.

Waymo

The manner in which Waymo discovered the potential theft of the IP is in and of itself a lesson in both serendipity and lack of attention to detail by one of their vendors. The vendor inadvertently sent an email to Waymo that included a diagram of a Uber LiDar circuit board. They looked at the diagram (who wouldn’t) and noted the striking resemblance to their own “highly confidential” design. 

This set Waymo’s investigatory efforts into high gear, and the list was short on who might have been in a position to share Waymo technology with Uber—Levandowski.

Waymo conducted their forensic inspection of Levandowski’s activities prior to his departure and discovered he had downloaded 14,000 documents containing Waymo’s restricted technology. They then looked at the activities of others who also departed Waymo to joion with Levandowski in his new venture, Otto, and discovered that they too had “downloaded additional Waymo trade secrets in the days and hours prior to their departure. These secrets included confidential supplier lists, manufacturing details and statement of work with highly technical information…”

Uber

The courts will likely decide whether Uber (Otto) knew that their technology being developed contains the intellectual property of Waymo. Their actions, however, lead one to believe that they are coming to realize that they may be sitting with a hot potato in their hands, having bought Otto, and Otto’s technology is tainted. 

Did they ask the question, is the technology of any other entity included in the Otto technology stack? And if they did, were the answers truthful. And if they were truthful, did Uber know then that there was a potential issue that they hoped no one would notice, or were they lied to by the Otto team? 

Uber putting Levandowski up against the wall speaks to the latter, while Uber’s foot dragging and refusal to produce the due diligence reports on Otto speaks to the former.

Levandowski is now very much sitting on a quagmire-filled island. That U.S. District Judge William Alsup referred the case to the U.S. Attorney’s Office for possible criminal investigation is a red flag to all that the accusation by Waymo may have legs.

The last well-documented case having been referred to the DOJ was in 2010 when departing Starwood (SPG) executives left Starwood for Hilton. The executives took the playbook for the “W” brand when they jumped ship to Hilton and created the Denizen concept hotels. This theft was also discovered accidentally when lawyers exchanged documents during discovery for another issue and the discovery documents provided by Hilton were Starwood’s IP. That case ended up with Hilton paying a multi-million-dollar fine and being proscribed from pursuing the “W” like concept for a period of time. 

Will Uber and Waymo come to terms and Levandowski find himself alone in criminal court for trade secret theft? Or will the DOJ criminal investigation find that Uber was culpable and had knowledge that Levandowski and others had integrated stolen technology into the Uber autonomous vehicle solution and everyone is in court together. 

Stay tuned as we learn more about the actions of the trusted insider: Levandowski.