As the motorcycle flopped into the California desert sand, a lanky, bespectacled engineer flapped his arms in distress. Ghostrider, the Yamaha built to drive itself, was disqualified from the Darpa Grand Challenge, about three feet from the starting line.
Fortunately for Anthony Levandowski and his team of UC Berkeley undergrads, Ghostrider was not the only dropout. Zero of the fifteen entrants finished the challenge, a 142-mile race for autonomous vehicles with a $1 million prize. But the event kicked off more than a decade of furious innovation, which would see Levandowski rise to the top of a booming self-driving industry. He would serve as a key member of Project Chauffeur, Google’s autonomous vehicle moonshot. Eight years later, he took his talents and expertise in lidar, a laser-based sensor, to his own robo-truck startup, Otto. And in August 2016, Uber acquired Otto for a reported $680 million, and put Levandowski in charge of its struggling self-driving effort.
Then, a fall that made Ghostrider look like a prima ballerina. In late February 2017, Google’s self-driving project, now known as Waymo, dropped a bombshell lawsuit against Uber, alleging Levandowski had made off with 14,000 confidential documents about self-driving car tech and used the trade secrets contained within to advance Uber’s project. Waymo alleges a vast conspiracy: secret dealings between Levandowski, other former Waymo employees, and then-Uber CEO Travis Kalanick, all part of a plot to leapfrog over its own seven-year advantage in self-driving tech.
In the year since the lawsuit was filed, this thriller has only gotten twistier. Levandowski has taken the fifth and been fired from Uber for refusing to cooperate with the company’s internal investigations. The US Attorney’s Office has launched a parallel criminal probe into the engineer’s alleged trade secret theft. Lawyers have scrapped over evidence and discovery.
So the first reason you should pay attention to this upcoming trade secrets trial between Uber and Waymo, which starts Monday morning, is that it’s a damn good story. It has battling tech titans: Alphabet, which brought in over $90 billion in 2016, and Uber, valued at $48 billion despite a turbulent 2017. Battling tech execs: former Uber CEO Travis Kalanick, Alphabet CEO Larry Page, former Uber board member and Benchmark partner Bill Gurley, Waymo Engineering VP Dimitri Dolgov, and former Waymo engineering head Chris Urmson are all on the potential witness list. Plus, secrets, alleged spying, disgruntled employees, and lots of disappearing data.
And best of all, a big prize at stake: the future of a tenuous but potentially trillion-dollar self-driving car industry. If Uber loses this lawsuit, it could lose its edge in autonomous vehicle tech, which Kalanick has said is crucial to the (reminder: still not profitable) company’s survival.
But even if you hate drama, secrets, and tech gossip, this trial is for you. You must stay tuned. Here’s why, and what you need to know.
Are you into moving fast and breaking things?
Above all, this trial feels like a repudiation of the Silicon Valley way, blasting through regulations and bureaucratic red tape in ambitious, sometimes-quixotic, sometimes-greedy quests to change the planet. “We’re going to take over the world one robot at a time,” Levandowski texted Kalanick in September 2016, according to court documents. “Down to hang this eve and mastermind some shit,” Kalanick replied.
Since Dara Khosrowshahi took over as CEO in August 2017, Uber has spent much breath apologizing for the way things went down when Kalanick was in charge. After this suit, former engineer Susan Fowler’s devastating exposé of the company’s sexism, and at least five federal investigations, culture there may—may—be changing. Still, Uber is a unicorn, its horn bruised but not broken by a year of terrible, terrible press. Maybe it’s still worth bending the rules and being a little awful in pursuit of world-shaking greatness (whatever that means to you). Maybe it’s not.
If the jury decides Uber, Levandowski, and Kalanick thieved trade secrets, it could serve as a lesson to the rest of the business community: There are consequences to moving too quickly and ignoring too many laws. (That’s not even counting what comes of the DOJ’s ongoing criminal probe into trade secret theft.)
Enamored with trade secrets law?
Intellectual property will sit at the heart of this three-week trial. As William Alsup, the federal judge overseeing this case, has written: “Acquisition alone will not be enough to recover damages.” In other words, Waymo doesn’t just have to prove that Levandowski took information from the company, but that a) what he took was actually a trade secret, instead of something any reasonable self-driving car engineer might figure out on her own; b) that he or others used the trade secret while creating Uber self-driving tech; and c) that Uber made or saved significant amounts of money, time, or labor as a result.
Into reading between the lines?
Here’s the curious thing, though. Because Waymo must argue that its trade secrets are worth keeping secret, the public won’t get to see vital pieces of trial evidence. Reading between redactions in court documents, there are a few hints. The trade secrets entail detailed schematics of lidar technology, some of which Waymo says were saved on Levandowski’s personal computer. There are also software-related trade secrets, which could come up in a second, totally separate trial. (Are you tired yet?)
Crucially, Waymo lawyers will argue that it’s been impossible for them to recover hard evidence that Uber used the company’s trade secrets because Uber destroyed it. Among the stuff that Waymo says Uber disappeared: hundreds of text messages between Levandowski, partner and fellow ex-Googler Lior Ron, and Kalanick; Levandowski and Ron’s electronic communications, files, and Slack records; and Levandowski’s personal laptop. The lawyers will also point to evidence that Uber used ephemeral messaging systems like Telegram and Wickr to conceal and destroy internal conversations.
But does that mean those files contained incriminating stuff? Alsup will warn the jury against allowing Waymo to draw too many inferences from big gaps in evidence. They could mean Uber deleted the bad stuff, or they could mean Uber never touched the trade secrets at all.
Thinking about acquiring a company?
Ultimately, this lawsuit is about an acquisition, and there are lessons learned for anyone coveting another company’s goods. Documents released during the discovery process have demonstrated the Uber did go through a due diligence process before purchasing Otto, hiring a specialized firm to investigate and write a report. Whether Uber did the right thing after it received the report is up for debate.
According to court documents and the report, Levandowski discovered he had five discs of Google files a few days after quitting the company, in January 2016. By March, he had informed his attorneys and Uber officials he had retained the discs. One official urged him to hang on to them, for record keeping. Kalanick allegedly told him Uber didn’t want anything to do with the Google data. Levandowski destroyed the discs—but flubbed on the date of their destruction during an interview with the due diligence firm.
Levandowski also told the firm that he had communicated extensively with Kalanick prior to leaving Google, and investigators uncovered evidence that the engineer had asked Uber staff about the worth of Google’s full self-driving team.
Knowing all this, Uber went ahead and acquired Otto anyway. Wait, hold up: It not only acquired the self-driving startup, but took the very unusual step of guaranteeing Levandowski and Ron it would cover the cost of legal actions against them if they were sued for intellectual property infringement.
Was it smart to acquire a company with this many pitfalls? We may be about to find out.
Thinking about leaving your job?
Another subject up for debate here is what highly skilled employees like engineers can take with them when they leave one company for a competitor. Can you “steal” information that you simply remember? Can that info be classified as a trade secret?
Judge Alsup is clearly concerned about this issue. As he writes in his draft jury instructions, to be given to the jurors before deliberations, engineers will “naturally sharpen their skills and accumulate practical lessons” in any job, and that’s just part of the package that employers get when they hire experienced workers. But those same engineers can’t tell new employers about “specific engineering solutions or information” from an old job, “even those developed or discovered by the engineers themselves.”
Anyone in a highly competitive industry, then, would be wise to watch the line this case draws between the skills you can take to a new job and the secrets you have to leave behind.
In the end, here’s the key to watching this lawsuit unfold. The judge will demand the trial’s jurors stay undistracted by the Uber trash storm, the baldly corporate badness that the ride-hailing giant’s name now evokes. Despite the big players and towering stakes, he has warned, this is a trial about trade secrets and lidar. Don’t get distracted.
© 2018 Condé Nast. All rights reserved.
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