Uber May Have Hid Evidence That Could Crack Open Its Self-Driving Car Fight
The bruising legal fight between Uber and Waymo over self-driving car tech took another explosive turn today, after the judge overseeing the case discovered Uber was withholding evidence that it had a department dedicated to gathering intelligence from competitors. The evidence also showed that Uber used systems that encrypted and deleted communications to prevent them from ending up in court.
The evidence in question is a letter written by an attorney for Richard Jacobs, a former member of Uber’s intelligence group. According to a filing by Waymo’s legal team, the letter was sent to Uber lawyers more than six months ago, and was obtained by the US attorney’s office as part of its own criminal investigation into the ride-hailing company. The letter was produced as part of a since-settled legal dispute between Jacobs and Uber. It’s not clear how it ended up with the Department of Justice, but there’s every chance the letter could change the course of the first major legal brawl of the autonomous driving era.
Waymo lawyer Charles Verhoeven read sections of the letter aloud in court today, according to Ars Technica, including these portions: “Jacobs is aware that Uber used the MA [Marketplace Analytics] team to steal trade secrets at least from Waymo in the United States,” and “MA exists expressly for the purpose of acquiring trade secrets, code base, and competitive intelligence.”
On the stand Jacobs walked some of that back, saying he approved the letter after reading it quickly while on vacation with his wife. Jacobs said he didn’t agree with his attorney’s assertion that Uber set up the group to steal trade secrets, or that Waymo was a particular target. He did confirm, according to the San Francisco Chronicle, that Uber worked “to protect sensitive information and ensure we didn’t create a paper trail that would come back to haunt the company in any potential criminal or civil litigation.”
“We have to get more to the bottom of this shadow system that Uber set up, and it may turn out to be nothing, but it may turn out to be an important way to conceal the testimony,” Judge William Alsup said, according to Bloomberg. Alsup has now delayed the trial, which was scheduled to start Monday, in order to give the court and legal teams adequate time to digest and account for these revelations. Alsup has not yet set a new start date.
Indeed, there’s much to sort out here, and the new evidence is all the more jarring given that it comes from a Department of Justice investigation (which Alsup recommended in the first place) nine months after Waymo filed its lawsuit. The autonomous driving company, originally known as Google’s self-driving car project, alleges that its onetime all-star engineer Anthony Levandowski stole 14,000 technical files from its servers, then started an autonomous trucking company called Otto, in early 2016. In August of that year, Uber acquired Otto for $680 million and put Levandowski in charge of its robocar research. Waymo says Uber then used those ill-gotten files to advance its stagnating R&D program, desperate to produce its own version of a technology that could upend its business model.
In October, Waymo’s lawyers obtained and published a due diligence report, commissioned by Uber before the Otto acquisition, which made clear Uber CEO Travis Kalanick knew Levandowski had taken those files before leaving his former employer. Levandowski has asserted his right against self-incrimination and was fired by Uber in May.
Still, Waymo has so far failed to produce any proof of its chief claim, that Uber used that intellectual property to boost its self-driving efforts. It might not need that sort of evidence to win the case, but it certainly would be helpful. Now that everyone knows Uber had communications that didn’t end up in discovery, a door that looked closed seems just a bit ajar.
“There’s enough under oath to believe that there is a 50–50 chance that this will be bad for Uber, and there’s a 50–50 chance that it will be a dry hole,” Alsup said. He plans to publicly release a mostly unredacted copy of the Jacobs letter this evening, and to continue today’s hearing tomorrow morning.
An Uber spokeperson denies that the new evidence alters the directions of the court proceedings. “None of the testimony today changes the merits of the case,” the spokesperson said. “Jacobs himself said on the stand today that he was not aware of any Waymo trade secrets being stolen.”
Now, the fact that Uber had a team dedicated to researching its rivals is barely noteworthy; many large companies have competitive intelligence departments. There’s nothing illegal about using messaging services that encrypt or delete communications. More to the point, there’s no evidence that anything Uber may have been hiding is related to this case.
But it doesn’t necessarily matter what’s in the hole. The discovery of the dirt-covered shovel is bad news for Uber all on its own. No matter the letter’s contents, Waymo’s counsel argues, it should have been made public during the discovery process. Alsup agreed, saying Uber “withheld evidence.”
The judge could also impose sanctions on Uber. Those can take a couple of forms. One is a financial penalty: Alsup could make Uber cover court costs associated with this extended trial, or even pay for Waymo’s attorney fees. Maybe more threatening would be sanctions that govern how the trial unfolds. Alsup could restrict what Uber’s counsel can tell the jury, or he could make sure the jury knows about suspicious behavior on Uber’s part.
“Sanctions can be a very significant advantage,” says John Marsh, a lawyer who specializes in trade secrets litigation. “He could slap them on the wrist or come down with a hammer.”
Indeed, Alsup told Uber’s counsel that he intends the tell the jury about these new discoveries. “That is going to hurt your case because any company that would set up that kind of system is as suspicious as can be,” he said today. “I don’t know how you are going to get around that.”
Perhaps worst of all, the divulgence of Uber’s hidden communications could resurrect an old bogeyman: the injunction. Soon after filing its lawsuit in February, Waymo asked Alsup to halt Uber’s self-driving program until the case is settled, to stop it from benefiting from allegedly stolen intellectual property. In May, Alsup declined that request, citing the lack of evidence that any trade secrets stolen by Levandowski had made their way into Uber’s technology. (He did demand that Levandowski be taken off the project; Uber dismissed the engineer later that month anyway.) Now that it’s clear Uber had an undisclosed communications system, Waymo could ask Alsup to reconsider. “That might be a good pathway for Waymo,” Marsh says. (Waymo did not reply to a question about whether it would do that.)
Whatever happens, the hole Uber has spent the past year digging for itself just got deeper.
- Uber paid off hackers to hide a data breach affecting 57 million passengers and drivers
- The company seems pretty serious about launching a flying car service in Los Angeles by 2020
- Ridehailing companies, on-demand delivery startups, and bike share programs have forced cities to finally reconsider their great untapped resource: curb space
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