Uber, the one-time $68 billion dollar darling of Silicon Valley, just can't seem to catch a break lately. Just yesterday we noted that a European judge issued a major blow for the company's efforts across several Euro-zone countries by finding that Uber is not really a "tech" company but rather just a glorified taxi service. Of course, the ramifications of such a finding are that Uber would have to enforce regulatory compliance among their drivers and even provide auto insurance (see "Uber Suffers Major Setback In Efforts To Conquer European Market").
Unfortunately, today brings yet another legal setback for Uber as U.S. District Judge William Alsup of San Francisco has called for a criminal investigation into allegations of trade secret theft that were raised in a court battle between Uber and Google over their rival self-driving car programs. Uber had called for a private arbitration process but Judge Alsup denied the request. Per Reuters:
U.S. District Judge William Alsup in San Francisco also partially granted Alphabet's (GOOGL.O) self-driving Waymo unit's bid for an injunction against Uber's self-driving efforts, and rejected Uber's arguments that Waymo's trade secret allegations should proceed in private arbitration.
In a statement, Waymo said Uber's bid to have the civil case heard in private by an arbitrator, not a jury, was a "desperate" attempt to avoid the court's jurisdiction. Unlike court proceedings, which are largely conducted in public, arbitrations take place behind closed doors.
The rulings are a setback for Uber as it tries to gain an advantage in litigation with serious strategic and financial consequences in the nascent field of autonomous technology. The ride services company failed to remove the ongoing case from public view and now faces the prospect of getting caught up in a fresh criminal probe.
For those not familiar with the background, the legal dispute between Uber and Google surrounds a fellow named Anthony Levandowski who allegedly took over 14,000 confidential files with him when he left Google's autonomous driving company Waymo. Levandowski apparently used the technology in the stolen documents to start his own autonomous vehicle company and then sold out to Uber within a matter of months.
The case hinges on over 14,000 confidential files that Waymo, formerly Google's self-driving car program, alleges were stolen by former Waymo employee Anthony Levandowski before he left the company.
Levandowski, who is not a defendant in the civil case, subsequently co-founded self-driving truck start-up Otto that was acquired months later by Uber.
Waymo claims the stolen information made its way into Uber's Lidar system, a sensor that uses light pulses to "see" the environment. It alleges the documents allowed Uber to fast-track its own technology and avoid years of costly research.
In referring the case to the U.S. Department of Justice for investigation of possible trade secret theft, Alsup said he took "no position" on whether a criminal prosecution was warranted. In his arbitration ruling, however, the judge noted the record contained "ample evidence" that Levandowski breached his duty of loyalty to Waymo.
Complicating Uber's task is the fact that Levandowski has invoked his constitutional right against self-incrimination and has refused to testify.
Meanwhile, Uber is, of course, denying all allegations of technology theft and is simultaneously throwing Levandowski under the bus by refusing to deny that he stole confidential documents from Google.
Uber declined to comment on Alsup's request for a separate criminal investigation into the theft allegations. In a statement the company said "we remain confident in our case and welcome the chance to talk about our independently developed technology."
Uber has not denied that Levandowski took Waymo's documents, but says they never made their way to Uber, nor into its own designs.
So, if we understand it correctly, the Uber defense goes something like this: "Yes, Judge...he stole the documents, then we paid hundreds of
millions of dollars for his company but we've never seen his stolen
technology."