Uber, Waymo Head to Trial -- WSJ
February 05 2018 - 03:02AM
Dow Jones News
By Greg Bensinger
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (February 5, 2018).
Technology companies are pouring billions of dollars into
developing robot cars they hope will save lives, make human drivers
obsolete and one day reap them riches.
The future of the technology might hinge on the outcome of a
blockbuster trial between two leading lights in the development of
driverless vehicles -- Uber Technologies Inc. and Alphabet Inc.'s
Waymo, an offshoot of Google -- set to start Monday in San
Francisco.
The biggest Silicon Valley legal battle in years pits a
highflying startup against a tech behemoth, in a case that has
already yielded a year of drama and legal wrangling. Waymo's
lawsuit, filed in U.S. District Court for the Northern District of
California, alleges Uber ransacked the tech giant's driverless-car
design secrets after paying about $680 million in 2016 to buy
autonomous-truck company Otto, founded by a former star engineer at
Google, Anthony Levandowski.
Uber denies the allegations, though court filings indicate it
knew before buying Otto that Mr. Levandowski had possession of
sensitive Google files. The San Francisco startup has said it is
using its own technology to create autonomous vehicles. Last May,
it fired Mr. Levandowski in part due to what it said was his
unwillingness to cooperate with its own investigation. His attorney
didn't respond to a request for comment.
Waymo has "accumulated significant and compelling evidence of
Uber's theft and use of Waymo's trade secrets," a spokesman
said.
"We're pleased to finally be able to focus on what this case is
really about: the technology," said an Uber spokesman. "We're very
confident in our technical case."
The case has captivated Silicon Valley, with allegations of
corporate espionage, a Who's Who of technology executives expected
to testify and tough talk from a fiery federal judge, William
Alsup, who has scolded both sides for what he said are failures to
disclose pivotal information.
Waymo will seek an injunction to prevent Uber from further
developing aspects of its driverless-car technology and possible
damages that could reach into the billions. If Waymo wins, the
ruling could hamstring a direct rival, as it eyes building out its
own ride-hailing networks in coming years.
Uber has called the development of self-driving vehicles
"existential" in its drive for more efficiency and eventual
profitability. A ruling in its favor would deliver Uber an
important moral victory, while allowing it to continue working on
autonomous vehicles unabated.
With billions of dollars on the line and the future of personal
transportation up for grabs, the case is expected to become a
touchstone for intellectual property law.
"The stakes are awfully high," said John Marsh, an attorney with
Bailey Cavalieri LLC, who specializes in trade-secrets law.
"Companies will have to think very carefully about how and which
other companies they acquire, and what the employees know that they
are bringing aboard."
Waymo alleges Uber executives carefully orchestrated the
acquisition to obtain the intellectual property and know-how Mr.
Levandowski could bring from his time as a Google employee, getting
a jolt in the yearslong race to get the vehicles on the road.
Waymo's allegations center on Uber's development of a technology
used to guide self-driving vehicles known as lidar, or light
detection and ranging systems. Waymo claims Mr. Levandowski
downloaded some 14,000 sensitive files to his personal computer
before quitting Google, imperiling eight patents.
But Judge Alsup has challenged Waymo attorneys to prove not just
that Uber arranged for the trade secrets to be stolen, but also
that it used them inappropriately in its development of lidar. That
may mean convincing the jury of technical subtleties in software
code and sensors.
"The amount of alleged misconduct is extraordinary," Mr. Marsh
said. "But the burden is on Waymo to paint a convincing picture
through circumstantial evidence."
The case took an unexpected turn late last year, when a 37-page
letter from a former Uber security official emerged alleging the
company had formed a covert team dedicated to stealing trade
secrets and helping employees dodge regulators' scrutiny. Uber said
in court the letter was an extortionist move designed to extract
millions of dollars from the company and that many of its
allegations were false. The judge last month said much of the
letter won't be admissible unless the former executive
testifies.
Mr. Levandowski, for his part, has indicated he will invoke his
Fifth Amendment right protecting himself from self-incrimination,
though he is not a named defendant in the case. Other boldface
names likely to testify are former Uber CEO Travis Kalanick, Google
co-founder Larry Page and Benchmark venture capitalist Bill Gurley,
previously on Uber's board.
Regardless of the outcome, Uber faces continued heat ahead: The
U.S. Justice Department may decide to prosecute Uber after Judge
Alsup recommended a criminal investigation. The Department declined
to comment.
--Jack Nicas contributed to this article.
(END) Dow Jones Newswires
February 05, 2018 02:47 ET (07:47 GMT)
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