The battle to be the first self-driving car company has a new twist.
Waymo’s lawsuit against Uber for allegedly stealing trade secrets pertaining to its self-driving technology was supposed to go to trial earlier this month, but has been delayed as a result of new evidence against Uber.
While the two ride-hailing companies were preparing their cases and getting ready to argue their sides before a jury, Judge William Alsup had ordered an investigation into Uber by the Department of Justice (DOJ) – an investigation which recently turned up a letter that has the potential to do serious damage to Uber’s case.
The letter was written by an attorney representing Richard Jacobs, who used to work for Uber as part of their Marketplace Analytics (MA) team. According to the letter, which Jacobs approved at the time, it was sent, Uber allegedly used its MA team for the sole purpose of stealing trade secrets from Waymo, and possibly other competitors as well.
The DOJ also found that Uber had actively taken steps to hide this information from the court and other legal professionals.
The letter was part of a lawsuit between Jacobs and Uber, which has since been settled. When questioned about the letter on the stand, Jacobs denied parts of it, saying he reviewed the letter in haste when he was on vacation. Jacobs denied that Uber’s MA group existed in order to steal trade secrets, or that Waymo was a target, but he did confirm that Uber took steps to protect sensitive information and eliminate the possibility of a paper trail that might work against them later.
None of that is actually illegal. Most companies have departments that specialize in spying on their competitors and trying to get hold of trade secrets. Using a messaging service that encrypts and/or deletes information is also legal, and what’s more, there’s nothing (so far) that shows any of the information behind all this has anything to do with the case filed by Waymo.
But the fact that Uber failed to disclose any of this is definitely suspicious and Judge Alsup has said it’s proof that Uber withheld evidence, which is never a good way for a defendant to start a trial.
The consequences of the company’s actions have yet to be determined, but the judge has a few options at his disposal, including imposing a financial penalty in the form of making Uber pay the court costs necessary to extend the trial or pay Waymo’s attorneys’ fees.
Other possibilities include restricting what Uber’s attorneys can tell the jury, which has the potential to severely disable their argument. At the very least, Alsup has already said he will tell the jury about the information Uber withheld and the steps Uber took to prevent that information from ever seeing the light of day. While there may not be any proof of Uber’s MA team having done anything illegal, Uber’s efforts to conceal the existence and activities of the team will doubtless put the company at a disadvantage before its attorneys have even had a chance to make their opening remarks.
Our Illinois trade secret attorneys have defended high-level executives in a covenant not to compete and trade secret lawsuits. A case in which our firm defended a former Motorola executive was covered in Crain’s Chicago Business. You can view that article by clicking here.
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