... to avoid abiding by the arbitration promise it requires its employees to make. We remain confident in our case and welcome the chance to talk about our independently developed technology in any forum," an Uber spokesperson told Business Insider.and more »
Uber CEO Travis KalanickReuters/Staff
A judge asked the US Attorney to examine whether Uber may have broken the law and stolen technology to build self-driving cars, a stunning twist in a legal dispute between two of the tech industry’s most powerful companies.
The order by Judge William Alsup late on Thursday was one of two major legal setbacks that Uber suffered, with Alsup also ruling that Google self-driving car spinout Waymo could take its claims against Uber to trial, denying Uber's bid to move the case into private arbitration.
Waymo sued Uber earlier this year, alleging that Uber stole trade secrets and intellectual property it had developed related to "Lidar," the radar sensors that self-driving cars use to navigate.
The case, which has pitted two of Silicon Valley's largest tech companies against each other, could affect the future of the nascent self-driving car industry, a market that analysts believe could eventually be worth tens of billions of dollars, and upend the automotive and transportation industries.
The dispute has already taken a number of surprising twists, including allegations of evidence being hidden from the court, theories about a shell company and a high-profile engineer who has refused to testify by using his Fifth Amendment right against self-incrimination. Google previously invested in Uber, when the ride-hailing company was still a young startup and had not yet become the world's most valuable private tech company.
Uber declined to comment on the referral to the US Attorney's office, but decried the order denying its bid for arbitration.
“It is unfortunate that Waymo will be permitted to avoid abiding by the arbitration promise it requires its employees to make. We remain confident in our case and welcome the chance to talk about our independently developed technology in any forum," an Uber spokesperson told Business Insider.
Judge Alsup referred the case into the hands of the US Attorney to examine whether Uber broke the law, raising the prospect of a potential criminal investigation into the ride-hailing company. The case is referred to the US Attorney for "investigation of possible theft of trade secrets based on the evidentiary record supplied thus far concerning plaintiff Waymo LLC’s claims for trade secret misappropriation," Alsup wrote in a separate order Thursday evening. "The court takes no position on whether is or is not warranted, a decision entirely up to the United States Attorney."
An additional decision regarding a preliminary injunction to stop part of Uber's self-driving car research is also expected shortly.
Alsup's denial is the first major decision in the case since the dispute between the companies kicked off in February when Waymo, the self-driving-car division that spun out of Google in December, accused Uber of stealing its trade secrets and intellectual property and of infringing on patents related to its lidar systems.
Since then, Uber's lawyers have argued that Google has made its arbitration agreement overly broad when it says they have to arbitrate disputes with anyone as it relates to an individual's employment. Much of Waymo's case is built on the actions taken by Anthony Levandowski, a former Google engineer who allegedly downloaded 14,000 files from Google before leaving the company.
Uber's belief was that Waymo, now a separate spin-out of Google, purposefully brought the case against Uber and not Levandowski to keep it in the public spotlight and avoid its obligation to his employment agreement. While any disputes between Waymo and Levandowski would have to be bound by the employment contract, Waymo did not sue Levandowski directly; rather, it sued Uber and the companies founded by Levandowski that were acquired by Uber, including Otto.
"Defendants have repeatedly accused Waymo of using “artful” or “tactical” pleading to evade its arbitration obligations by omitting Levandowski as a defendant. These accusations are unwarranted," Alsup wrote.
Obstructing the narrative
Instead, Alsup says Waymo followed the proper course of action.
Kalanick (left) and Anthony LevandowskiAssociated Press
"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," Alsup continued.
"This was a desperate bid by Uber to avoid the court’s jurisdiction," a Waymo spokesperson said. "We welcome the court’s decision today, and we look forward to holding Uber responsible in court for its misconduct.”
Alsup also had a few words for Levandowski in his motion to deny arbitration, saying that the side-lined head of Uber's self-driving car division "continues to obstruct" after pleading the Fifth Amendment to avoid self-incrimination.
"Even though he is not a defendant here, moreover, Levandowski’s assertion of his Fifth Amendment privilege 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," Alsup wrote.
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