Trepanier MacGillis Battina P.A. 8000 Flour Exchange Building 310 Fourth Avenue South Minneapolis, MN 55415 612.455.0500
Trepanier MacGillis Battina P.A. 8000 Flour Exchange Building 310 Fourth Avenue South Minneapolis, MN 55415 612.455.0500

Trade Secret Dispute Between Waymo and Uber Offers Lessons

A legal blow up between two tech titans in California (Waymo, LLC, owned by Google’s parent company Alphabet on the one side, and Uber Technologies, Inc. on the other side) demonstrates the danger posed whenever an employee leaves a company with confidential files. The dispute ignited when Uber hired Anthony Levandowski, a former “star engineer” who was heavily involved in Waymo’s efforts to design a self-driving automobile. It is undisputed that Levandowski downloaded over 14,000 confidential files from Waymo before leaving. In February of 2017, Waymo sued Uber, Levandowski, and Levandowski’s companies (Ottomotto LLC and Otto Trucking, LLC) in U.S. District Court for the Northern District of California. The litigation is docketed as Waymo LLC v. Uber Technologies, Inc., et al, No. C 17-00939 WHA. Waymo’s claims included misappropriation of trade secrets under the Defend Trade Secrets Act (“DTSA”) and the California Trade Secrets Act, as well as patent infringement. Non-compete agreements, which are not enforceable in California, were not part of the litigation.

On May 11, 2017, U.S. District Judge William Alsup granted Waymo LLC’s motion for a preliminary injunction ruling that “Uber likely knew or at least should have known that Levandowski had taken and retained possession of Waymo’s confidential files.” Alsup’s order prohibits Levandowski from working on any Uber project concerning self-driving vehicle technology, effective immediately.

Waymo accused Levandowski of stealing the 14,000 confidential files and then using alleged trade secrets contained therein to bolster Uber’s development of a self-driving vehicle. Levandowski used his personal Waymo security clearance to access and copy the secure files in December 2015 before terminating his employment and starting a competing business, Ottomotto. Uber acquired Ottomotto for $680 million in August 2016, hiring Levandowski to lead its self-driving vehicle efforts.

Uber has not denied Levandowski stole the files, nor denied its role in luring Levandowski away from Waymo. Instead, Uber argued the stolen trade secrets played no role in its development of Light Detection and Ranging (“LiDAR”) technology, which is used to guide self-driving vehicles. Uber also maintained that Waymo’s files never crossed over to Uber’s servers or devices.

Alsup’s opinion notes, however, that Uber’s LiDAR technology shares some suspicious similarities with Waymo’s stolen trade secrets. Plus, Uber presented no evidence of steps taken to prevent Levandowski from consulting the stolen files via his own personal devices.
Ultimately, Alsup declined to make an adverse inference regarding Uber’s specific misuse of the files, but did say “it would strain credulity to imagine that Levandowski plundered Waymo’s vault the way he did with no intent to make use of the downloaded trove.” Alsup ordered Uber to return the stolen files to Waymo and the court by May 31. The judge also ordered Uber to provide an accounting of every person who had seen or heard any part of the downloaded materials. Waymo’s claim of patent infringement and request for a broad injunction against Uber’s self-driving vehicle development efforts were rejected.
Levandowksi has pled the Fifth Amendment because he may be facing a criminal investigation by the United States Attorney. His employment with Uber was terminated on May 30, 2017.

Take-Aways from this case:

  1. It is never a good idea for an employee to take proprietary information from a former employer and you will get caught, even if you are a technology genius.
  2. Uber allegedly did not do an adequate job of ensuring that Levandowksi did not take or use confidential information, and its mistake was costly.
  3. This is one of the first court decisions following the enactment of the DTSA. Judge Alsup held that the DTSA offers “essentially the same definitions” as the California Trade Secrets Act and did bother to provide additional analysis under the federal law. Look for other judges to take the same approach in those states which have enacted a version of the Uniform Trade Secrets Act.
  4. The Court’s remedy requiring an accounting of everyone who saw the alleged trade secrets is a useful model for plaintiffs and their attorneys in these types of cases to consider when seeking relief.

About the Author:
Trepanier MacGillis Battina P.A. is a Minnesota trade secrets law firm located in Minneapolis, Minnesota. Their trade secret law attorneys can be reached at 612.455.0500.