Twist in Stolen Trade Secrets Case Will Likely Shut Down Parts of Uber

Lawsuit claims employee stole confidential information from Alphabet Inc. self-driving car company

Two preeminent Silicon Valley tech titans may be headed for an all-out brawl in court. Waymo — the self-driving car company owned by Google’s parent company, Alphabet Inc. — will now have its case against digital ride-hailing giant Uber move to open court. And the case involves accusations of stolen trade secrets.

At the center of it is Anthony Levandowski, a former engineer for Waymo, who left the company in early 2016 and had his self-driving truck startup, Otto, bought by Uber for $680 million in August of the same year. He now leads Uber’s self-driving car efforts. Waymo claims that Levandowski “leveraged stolen information” by downloading thousands of documents before leaving the company. Even juicier, Waymo’s lawyer Charles Verhoeven has argued that Levandowski was acting as a mole for Uber, creating a “cover-up scheme” to hide its desire to rip-off Waymo’s “LiDar” technology, a system that uses lasers to determine the distance to an object.

A decision to move forward with a criminal probe on Thursday from Judge William Alsup was a punch to the gut to Uber not once, but twice: Not only did Alsup recommended a federal attorney look into the possibility trade secrets were criminally stolen, but he also denied Uber’s appeal to have the case enter private arbitration.

In his decision, Alsup said “Levandowski’s assertion of his Fifth Amendment privilege has obstructed and continues to obstruct both discovery and defendants’ ability to construct a complete narrative as to the fate of Waymo’s purloined files.”

For Uber, Alsup’s injunction will likely shut down aspects of its self-driving car team, at least temporarily. For Levandowski, he could face time in prison if he’s found guilty of stealing confidential information on his way out Waymo’s doors.