Waymo’s lawsuit against Uber, its competitor in the automated vehicle business, is going to trial. Judge William Alsup ruled that Uber could not force the lawsuit over theft of trade secrets into private arbitration.
Instead, the trial will play out publicly, with evidence being presented mostly in the open. This is not the scenario that Uber wanted.
Waymo, the self-driving car subsidiary of Google’s parent company Alphabet, has accused Anthony Levandowski, one of its former engineers, of stealing thousands of confidential documents from Waymo before founding his own self-driving truck startup and eventually going to lead Uber’s self-driving team.
Uber argued unsuccessfully that Waymo’s claims belonged in an arbitration proceeding because of a clause in Levandowski’s employment contract that said disputes between Waymo and Levandowski should be settled in arbitration.
“It is unfortunate that Waymo will be permitted to avoid abiding by the arbitration promise it requires its employees to make. We remain confident in our case and welcome the chance to talk about our independently developed technology in any forum,” an Uber spokesperson told TechCrunch.
But Judge Alsup wrote in his decision that Waymo wasn’t bound to arbitration in this case. “Defendants have repeatedly accused Waymo of using ‘artful’ or ‘tactical’ pleading to evade its arbitration obligations by omitting Levandowski as a defendant,” Judge Alsup wrote. “These accusations are unwarranted.”
Waymo has pursued a separate arbitration against Levandowski and his co-founder Lior Ron over employee poaching. The company claims Levandowski and Ron, also a former Googler, used confidential salary information to poach Google employees to their self-driving truck startup, Otto. Uber acquired Otto in August 2016 in a deal worth roughly $680 million.
“Waymo has honored its obligation to arbitrate against Levandowski by arbitrating its claims (concerning employee poaching) against Levandowski. Its decision to bring separate claims against defendants in court was not only reasonable but also the only course available, since Waymo had no arbitration agreement with defendants. Even though he is not a defendant here, moreover, 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. As a practical matter, it is hard to imagine how consolidating proceedings as to Levandowski and defendants, whether here or in arbitration, could alleviate these difficulties,” Alsup wrote.
The decision hints that Alsup’s pending decision on a preliminary injunction might not be favorable to Uber. Waymo had asked for the injunction to prevent Uber from using its technology while the case proceeds, and Alsup’s comments in the arbitration ruling suggest he’s not too keen on Uber’s behavior.
If Waymo gets everything it wants from the injunction, it could effectively halt Uber’s self driving development plans entirely while the trial plays out.
In an earlier decision, Alsup said he would release his ruling on both the motion to compel arbitration and the preliminary injunction under seal to both company’s lawyers before making them public. A new entry on the docket for the case notes that Waymo’s motion for a preliminary injunction has been partially granted and partially denied, but it’s not clear yet which of Waymo’s requests the judge will honor.
“This was a desperate bid by Uber to avoid the court’s jurisdiction. We welcome the court’s decision today, and we look forward to holding Uber responsible in court for its misconduct,” a Waymo spokesperson said in a statement.
Update: Judge Alsup has also referred the case to the U.S. Attorney for a possible criminal investigation.
Featured Image: Bryce Durbin/TechCrunch