Waymo v. Uber: The battle over self-driving cars

It wasn’t too long ago when self-driving cars, as portrayed in “I, Robot,” seemed like a thing of the distant future. But, lo and behold, self-driving cars no longer seem out of reach. In fact, it seems like they may be right around the corner. Last year, Elon Musk predicted that by the end of 2017 he will produce a Tesla that can drive itself from Los Angeles to New York City. With great technology, however, comes great litigation.

Waymo is a self-driving car business that started as Google’s self-driving car project in 2009, with the goal of developing a fully functioning autonomous car. Two years before the official start of this project, Anthony Levandowski joined Google’s Maps team as a Software Engineer to work on Google Street View. Eventually he became central in Google’s self-driving car project. At the beginning of 2016, Levandowski left Google and started his own company, Otto. Six months later, Uber bought Otto and Levandowski began working as Vice President of Engineering in charge of the self-driving car program.

Among a variety of other claims, Waymo accuses Uber of trade secret misappropriation. Per Mintz v. Mark Bartelstein and Associates Inc., a claim for trade secret misappropriation has three main elements: “(1) the plaintiff owned a trade secret, (2) the defendant acquired, disclosed, or used the plaintiff’s trade secret through improper means, and (3) the defendant’s actions damaged the plaintiff.

For the first element, Waymo must prove that they owned a trade secret. Under the California Uniform Trade Secrets Act, “trade secret” means information (e.g., program, device, technique) that: “(1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”

In this case, Waymo argues that multiple of their trade secrets, including “technical information, designs, and other ‘know how’ related to its LiDAR,” related to the design of their autonomous cars were misappropriated. LiDAR is a major component of Waymo’s self-driving car technology. It uses the reflection of lasers off objects to create real-time a 3D image that’s used in detecting obstacles the car needs to avoid.

You might be able to think of a few reasons why keeping details about the LiDAR system would be economically beneficial for Waymo. In the highly competitive market of technology, this type of groundbreaking technology would be more valuable if kept secret. Google has been developing this technology since 2009 so if companies like Otto could simply use these designs, this would save them the time and cost of years of research. Waymo must also demonstrate that they undertook reasonable measures to keep this information secret. Some of the measures they implemented involved restricting access to trade secret information to “need to know,” encrypting their networks, and restricting their physical facilities with security guards and other means.

For the second element, Waymo must prove that Uber improperly acquired and used their trade secrets. In Ultratech, Inc. v. Ensure NanoTech (Beijing), Inc., the plaintiff successfully pled facts that plausibly showed that the defendant violated this element. The court found that the allegations that Wang, president of Start Science (Beijing) Co. Ltd., received the plaintiff’s trade secrets pursuant to the sales-agency agreement, knew or should have known that the information were trade secrets, and disclosed or personally directed Start Science to disclose it to Ultratech.

Here, Waymo makes similar arguments. Levandowski received Waymo’s trade secrets pursuant to his employment contract when he was working for Google and disclosed it to Uber. Uber knew or should have known under the circumstances that the information constituted trade secrets. Waymo has a variety of fairly strong evidence that shows the improper acquisition of Waymo’s trade secrets. In a testimony from Google’s security engineer specializing in forensics, he said Levandowski downloaded more than 14, 000 highly confidential files and exported documents about suppliers around the time of his resignation.

For the third element, Waymo must show that Uber’s misappropriation of their trade secrets proximately caused damage. In the Eighth Circuit case PFS Distribution Co. v. Raduechel, the appellants argued that no reasonable jury could’ve found their misconduct did not cause the loss of two of the appellant’s customer accounts. To establish causation, it is helpful to apply the “but for” test. The evidence must show that the injury that the appellants sustained wouldn’t have occurred “but for” the appellee’s trade secret misappropriation. In PFS, the court denied the appellant’s motion because there was sufficient evidence showing that PFS would have suffered the harm regardless of the appellee’s misappropriation. For example, there was evidence that one of the customers were planning to leave PFS before the formation of appellee’s company. In this case, Waymo claimed that as a direct and proximate result of Uber’s conduct they will endure harm in the form of attorney’s fees and Uber’s unjust enrichment.To refute this claim, Uber could introduce sufficient evidence that weakens the causal link between their alleged misappropriation and the alleged harm to Waymo.

If Uber loses this case, they will have to pay damages and can no longer use the allegedly stolen technology. This would effectively end Uber’s future in the self-driving car industry. They would have to develop their own LiDAR-like technology. If Google is any indication, it could take 7-8 years to develop this kind of technology from scratch. In the fast-paced environment of technology, this kind of time would likely be fatal to Uber’s autonomous car program. Along with the multiple other PR snafus that Uber had endured this year, this could be a larger blow to the company as a whole and not just this program. Whatever the outcome, a key takeaway is that the days of self-driving cars are nigh. We have until 2035 to reach the precedent set by “I, Robot.”

Yasmin Amin-Reimer is a J.D. candidate, ’18, at the NYU School of Law.