On Feb. 23, 2017, Waymo, the Alphabet Inc. company formed from Google’s self-driving project, sued Uber Technologies, Inc. and its related entities, Ottomotto LLC, and Otto Trucking LLC. The suit is for violations under the federal Defense of Trade Secrets Act and other related claims.
Waymo alleges its former engineer, Anthony Levandowski, took valuable intellectual property relating to LiDAR that is essential to its autonomous driving vehicle program and then resigned without notice. Levandowski then passed the technology off to Uber.
While Uber and the other defendants have yet to respond with their version of the story, the lawsuit sets forth a detailed and damning account of unfair competition and theft by a former employee. According to Waymo’s suit (Waymo LLC v. Uber Technologies Complaint), Levandowski:
Waymo has uncovered evidence that Anthony Levandowski, a former manager in Waymo’s self-driving car project – now leading the same effort for Uber … searched for and then installed specialized software onto his company-issued laptop in order to access the server that stores these particular files. Once Mr. Levandowski accessed this server, he downloaded the 14,000 files, representing approximately 9.7 GB of highly confidential data. Then he attached an external drive to the laptop for a period of eight hours. He installed a new operating system that would have the effect of reformatting his laptop, attempting to erase any forensic fingerprints that would show what he did with Waymo’s valuable LiDAR designs once they had been downloaded to his computer.
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While Waymo developed its custom LiDAR systems with sustained effort over many years, Defendants leveraged stolen information to shortcut the process and purportedly build a comparable LiDAR system in only nine months.
A few observations about this suit.
- First, the Defend Trade Secrets Act (DTSA), 18 U.S.C. 1832, et. seq., was signed into law 0n May 11, 2016, by President Obama. It creates a federal civil cause of action for trade secret misappropriation. Since its enactment, there have been an increasing number of DTSA suits filed. This trend will continue in light of the remedies and other enforcement procedures under the DTSA.
- Second, Alphabet and Google were on the receiving end of a DTSA lawsuit. Both were sued in June 2016, in California federal court for allegedly violating the DTSA. However, that claim was recently dismissed (See order from Space Data Corp. v. Alphabet, Inc. lawsuit).
- Third, Waymo’s suit against Uber caps a horrendous month for the ride-sharing company. Specifically, Uber made headlines for hiring a notorious gun-toting “preacher” who was No. 2 on Al-Qaeda’s hit list and damning revelations about it handled charges of sexual harassment (See Hiring the No. 2 Guy on Al-Qaeda’s Hit List: An Uber-Example of Limitations in Employee Background Checks and An Uber Example For How Not to Respond to Sexual Harassment, respectively). Headlines like these above are not good for business. But the DTSA lawsuit is especially troubling if the allegations are proven true. Besides significant damages, it could set back Uber’s autonomous vehicle plans indefinitely.
- Fourth, let’s assume Uber had no involvement with the initial misappropriation. However, it still faces legal liability and risks to its business operations even if it was not initially involved in the wrongful conduct. For example, a few years ago, I represented several engineers sued for allegedly taking source code and confidential information that was later used in their new employer’s competing software. That software was marketed as a “game-changer” prior to its release and intended to replace the new employer’s flagship product. The new employer hired the engineers for their experience – not because they had or were expected to bring with them any wrongfully acquired trade secrets or other confidential information. Even so, the release was delayed indefinitely and the competitor was facing substantial damages under various legal theories for the actions of the engineers. Mission accomplished if you were the former employer.
For this reason, your business should have in its hiring procedure checkpoints and procedures to warn and protect against new hires from using confidential business assets of a former employer. Such measures go along way towards avoiding litigation or limiting liability.
For more information about trade secret protection, contact attorney Jason Shinn. Since 2001, he has worked with businesses to protect trade secret and confidential business information. This collaboration includes drafting enforceable non-compete, non-solicitation, and confidentiality agreements and suing for trade secret misappropriation claims in state and Michigan courts Also, Mr. Shinn works with engineers and programmers involved with autonomous vehicle technology with respect to negotiating and assessing employment, confidentiality, and licensing agreements.