Uber-Waymo lawsuit settlement
When Waymo, the autonomous car company once known as Google’s self-driving car outfit, announced it was suing Uber for trade-secret theft in February, the action seemed to center on a single person: Anthony Levandowski. According to Waymo, the former Google engineer downloaded 14,000 secret documents from its system and used the contents to launch his own self-driving truck startup, Otto, in January 2016. By August, Uber had acquired Otto for a reported $680 million, and Waymo says the ride-hailing giant was in on the theft from the start.
Last weekend, the US Attorney’s Office pulled the very unusual move of forwarding a piece of evidence to Judge William Alsup, who is overseeing the lawsuit in the Northern District Court of California. The document is a 37-page letter written by Jacobs’ lawyer (Richard Jacobs is former Uber intelligence employee) in May 2017, as part of an employment dispute with Uber. And it makes some pretty amazing allegations. It claims that Uber dedicated its intelligence team to acquiring trade secrets from competitors like Waymo; that the company was very, very deliberate in shielding information from discovery in potential lawsuits; and that Uber employees used disappearing messaging apps to communicate with one another.
On the stand Monday, Jacobs walked back some of his claims, telling the court he had approved the letter without giving it a full read. Still, Judge Alsup was mightily displeased that Uber had not been more forthcoming about the letter. During a hearing Tuesday, he delayed the trial until February 2018 to give Waymo more time to paw through Uber’s documents. (It had been scheduled to begin December 4.)
“Poor Uber, I don’t feel sorry for you because you brought all this on yourself,” Alsup said.
Alsup’s questions: Why the heck didn’t Uber hand over this implicating letter to Waymo during the lengthy discovery process? Why did Uber eventually pay Jacobs and his lawyer $7.5 million in settlements and consulting fees if Jacobs’ allegations were not true? And could Uber have communicated about using Waymo’s stolen secrets within the messaging apps Jacobs mentioned, in an attempt to leave no (paper) trace?
The first few days of the trial revealed a number of embarrassing detailsconnecting Uber with Mr. Levandowski. However, Waymo had yet to deliver on the substantive legal part of the argument that Uber knowingly stole Waymo’s trade secrets for use in its products. The judge, William Alsup, admonished Waymo’s lawyers on Wednesday for not having made much progress on its trade secret misappropriation claims.
Before the trial started, Uber offered to settle with Waymo in exchange for 0.68 percent of the company’s equity, or about $500 million, but its board of directors pulled the offer and allowed Mr. Kalanick to testify, according to two people familiar with Uber’s thinking who were not authorized to speak publicly on the matter.
After testimony on Thursday, settlement talks restarted, and Uber offered the lower percentage. Now Uber will pay to Waymo a settlement of 0.34 percent of Uber equity, valued at approximately $245 million. The settlement included an agreement that none of Waymo’s confidential information was being incorporated in Uber’s autonomous vehicle technology.
