A federal judge is weighing Waymo’s request to prevent Uber from using self-driving vehicle technology the Google spinoff claims was stolen by a rogue ex-employee, according to multiple reports. The ruling in favor of the injunction could undermine Uber’s ability to operate its fleet of autonomous cars on public roads in Pittsburgh and Tempe, Ariz. It’s the next hotly closely watched case that pits two of Silicon Valley’s biggest players head-to-head.
US District Court Judge William Alsup appears to be leaning against granting Waymo’s request for an injunction, but he has yet to issue a ruling. According to Reuters, Alsup chided Waymo for not producing a “smoking gun” in its case against Uber.
Waymo filed the explosive lawsuit in late February, claiming that Anthony Levandowski, a former Google engineer and current vice president at Uber, had stolen 14,000 confidential documents — or 9.7 gigabytes of data — before leaving Google. In the suit, Waymo accuses Uber of stealing its trade secrets and infringing on its patents, including Waym’s proprietary LIDAR system.
According to Waymo, Levandowski used the stolen technology to entice Uber into buying his self-driving truck startup Otto for $680 million six months after it launched in 2016. Uber called the allegation “baseless,” but recently was forced to admit that Google’s self-driving technology was superior to its own. (Levandowski recently stepped aside as head of Uber’s self-driving car unit.)
The upshot here: Waymo claims Otto was a ruse to acquire Levandowski’s tech/talent, and deal was negotiated while he still worked for Goog.
— ಠ_ಠ (@MikeIsaac) May 3, 2017
Today, Waymo’s lawyers took that argument one step further, basically calling Otto a shell company used by Levandowski to give Uber an unfair advantage in the competitive field of self-driving cars.
Waymo claims that the deal for Uber to purchase Otto was negotiated while Levandowski was still employed at Google. The company’s lawyers produced documents showing Levandowski was promised 5 million shares in Uber, vesting January 28th, 2016. That amounts to around $250 million in stock, Waymo’s lawyers said. (An Uber spokesperson told reporters at the hearing that those shares were backdated after the acquisition to begin vesting.)
Waymo says Uber gave Levandowksi 5 million shares — valued at $250M— the day after he left Google.
— Biz Carson (@bizcarson) May 3, 2017
US District Court Judge William Alsup, who famously learned to code in Java for a case involving Google and Oracle, closely examined Uber’s “Spider” laser radar system (aka LIDAR) that Waymo says closely resembles its own.
Uber’s lawyers show off “Spider”, the lidar project Waymo now says mirrors their own
— Aarian Marshall (@AarianMarshall) May 3, 2017
Levandowski recently invoked his Fifth Amendment right to avoid self-incrimination, against the advice of Uber’s lawyers. A redaction mistake in a recent filing revealed that Lior Ron, Levandowski’s co-founder in Otto, has also been implicated in the lawsuit.
Ultimately, Uber wants to move the case into arbitration, arguing that since Waymo’s case centers on the action of Levandowski, a former employee, it should be subject to the arbitration agreement as part of his employee contract. The move is also strategic, as it would allow Uber to avoid a costly and embarrassing jury trial. That trial is tentatively scheduled to commence this October.
The allegations put forward by Waymo arguably represent the biggest threat to Uber’s long-term financial survival — more so than the harassment scandal or any of the other controversies that have enveloped the company in recent months. If Uber can eventually transition to a majority driverless fleet, it can slash fares for customers, drive up demand, and increase its own profits. But if Waymo can prove that Uber is using stolen technology, that future could be imperiled. And Uber’s ability to justify its huge $70 billion valuation could take a serious hit.