By Greg Bensinger and Jack Nicas
Uber Technologies Inc., one of Silicon Valley's most secretive
firms, may be forced to open up to one of its archrivals, Google
parent Alphabet Inc.
A federal judge on Monday gave Alphabet's driverless-car unit
Waymo broad leeway to seek and examine evidence from Uber in a
three-month-old lawsuit that accuses the ride-hailing firm of
conspiring with a former Waymo executive to steal 14,000 files
related to its autonomous-vehicle program.
U.S. District Judge William Alsup ordered Uber to produce a
detailed accounting of any employee contact with the allegedly
stolen files and all relevant written or oral communication by the
Waymo-turned-Uber executive at the center of the case, Anthony
Levandowski. The judge also authorized Waymo to depose seven more
Uber employees and inspect Uber's work on laser sensors, known as
lidar, that Waymo claims is based on its technology.
The preliminary injunction, which was unsealed on Monday,
stopped short of forcing Uber to shut down its self-driving
efforts, but the order formally barred Mr. Levandowski from working
on the technology. Uber already said it removed Mr. Levandowski
from leading its driverless-car program.
The case has riveted Silicon Valley by exposing the secrets of
two technology giants dueling to become the first companies to
commercialize self-driving cars. Many tech companies and auto
makers believe driverless cars will one day replace traditional
vehicles, saving lives and costs by reducing human error. Now a
feud between two of tech's most-watched companies is publicly
playing out over some of the world's most promising technology.
Google and Uber were once allies. Google's venture-capital firm
invested $258 million in Uber in 2013, a top Google executive was
on Uber's board until last year, and Uber has long used Google's
mapping software for its ride-hailing service. But the two firms
have encroached on each other's turf as they battle for control of
the road. That rivalry intensified on Sunday when Waymo said it
would work with Uber's U.S. ride-hailing competitor, Lyft Inc., to
develop self-driving cars together.
Waymo's new discovery powers are a blow to Uber, as was the
judge's rejection last week of Uber's bid to move the case to
arbitration, said Michael Brophy, an attorney with Withers
Worldwide who has tracked the case. He noted the partial injunction
is also a win of sorts for Uber, as it can continue testing the
vehicles while the case winds its way through court. "Both sides
can wave a flag saying they've won something, " he said.
Mr. Levandowski and Uber are also facing a possible criminal
probe after the judge last week referred the case to Justice
Department officials for review. The Justice Department and Uber
haven't commented on the possible investigation.
Mr. Levandowski didn't respond to a request for comment. He
joined Uber as part of the company's $680 million purchase of his
Otto self-driving truck firm last year. Uber hasn't disputed Mr.
Levandowski took the files, but it denies Mr. Levandowski has made
a meaningful contribution to the technology.
For Uber, unmanned vehicles are critical to its future success
as they could all but eliminate the cost of paying drivers, which
helped contribute to its 2016 loss of at least $2.8 billion. Uber
has denied wrongdoing in the lawsuit and said Waymo's true intent
is to cripple a competitor.
The judge said Waymo has made a strong case thus far. "The
bottom line is the evidence indicates that Uber hired Levandowski
even though it knew or should have known that he possessed over
14,000 confidential Waymo files likely containing Waymo's
intellectual property," the judge wrote. Evidence also suggests
that information from the files "has seeped into Uber's own"
driverless-car technology, he wrote.
"We are pleased with the court's ruling that Uber can continue
building and utilizing all of its self-driving technology," an Uber
spokeswoman said. The company will "demonstrate that our technology
has been built independently from the ground up."
Waymo said in a statement it would use the new discovery power
"to further protect our work and hold Uber fully responsible for
its misconduct."
The Waymo allegations add to Uber's woes this year, following
charges of a workplace permissive of sexual harassment and sexism,
a series of executive departures, a federal investigation into its
use of a technological tool to evade regulators, and a leaked video
of Chief Executive Travis Kalanick berating an Uber driver. The
company has hired former U.S. Attorney General Eric Holder to help
lead an internal investigation of its workplace and is interviewing
candidates for its chief operating officer post, to help serve as a
check on Mr. Kalanick.
Uber still will be able to test its self-driving cars on the
road, currently in California, Pennsylvania and Arizona. Judge
Alsup rejected the request from Waymo to block Uber from working on
121 technologies related to self-driving cars that Waymo claimed
were trade secrets stolen by Mr. Levandowski. Some of the
technologies aren't actually trade secrets and few have been traced
to Uber's technology, Judge Alsup wrote.
But Uber faces potential damage to its reputation if this case
plays out in a public forum over months or years, possibly hurting
the company's ability to retain and recruit from a limited pool of
qualified self-driving engineers.
Judge Alsup gave Waymo power to discover if lidar has been
incorporated into Uber's driverless-car technology. The judge
ordered Uber to describe any employee's knowledge of the allegedly
stolen files, including "what they saw or heard, when they saw or
heard it, and for what purpose." He also ordered a log of Mr.
Levandowski's written or oral conversations regarding lidar,
including phone calls, text messages and in-person conversations.
And he granted a Waymo attorney and expert authority to inspect all
of Uber's work on lidar.
If Waymo turns up new information in that discovery, the firm
can file a new injunction request.
Granting Waymo such broad discovery powers "is a sign the court
wants to make sure that Waymo has every opportunity to establish
its case," said Mr. Brophy, the outside attorney who has tracked
the case. "It's not fair for Uber to say, 'We had no contact with
Levandowski or any of these documents,' and then not allow Waymo to
test that theory."
The company added, "Competition should be fueled by innovation
in the labs and on the roads, not through unlawful actions. We
welcome the order."
Still, Mr. Levandowski has frustrated Waymo's efforts to build
its case by invoking his Fifth Amendment rights and refusing to
answer questions or turn over many documents. The judge wrote that
despite that, Uber isn't barred from firing Mr. Levandowski. "Uber
has no excuse under the Fifth Amendment to pull any punches as to
Levandowski," he wrote.
Write to Greg Bensinger at greg.bensinger@wsj.com and Jack Nicas
at jack.nicas@wsj.com
(END) Dow Jones Newswires
May 15, 2017 19:30 ET (23:30 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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