In an unexpected twist on Thursday evening, the federal judge presiding over Waymo’s bitter lawsuit against Uber referred the case to the United States attorney to investigate allegations that the ride-hail giant stole trade secrets from the Google driverless car spinoff. The specter of possible criminal implications has long been looming over the case; Its referral to the US attorney has added a new layer of intrigue and drama to an already high-stakes legal battle between two tech titans.
While it’s impossible to say with any degree of certainty just what will come of such a call for a possible criminal probe — even the judge who made it said he “takes no position on whether a prosecution is or is not warranted” — former U.S. attorneys and legal scholars say it doesn’t bode well for Uber.
“This is bad news for Uber,” said Timothy Heaphy, a former US attorney for the Western District of Virginia, who now chairs a white collar defense and internal investigations practice at the law firm Hunton & Williams. “The focus of the federal investigation would be how high did awareness of this activity go within Uber management?”
John Marsh, a trade secrets litigator and partner at the firm Bailey Cavalieri, said it’s rare for a case like Waymo v. Uber to be referred to a US attorney so early on. “I follow this area of law pretty closely,” he told BuzzFeed News. “I can’t remember a federal judge doing that.”
Asked whether Waymo has communicated with the Justice Department about the prospect of or existence of a criminal investigation, a spokesman declined to comment. An Uber spokesperson declined to comment on the matter as well. The Justice Department did not return a request for comment.
The maximum penalty for theft of trade secrets is up to 10 years of imprisonment, and a fine of up to three times the value of the trade secrets at hand.
Waymo’s case against Uber hinges on Anthony Levandowski, a former employee it alleges stole its self-driving car trade secrets before joining the ride-hail company to oversee its self-driving car program. Levandowski, though not party to Waymo’s suit, has so far invoked his 5th Amendment rights to avoid self-incrimination should the case become a criminal matter. The referral of the case to the US Attorney would seem to raise the stakes on that issue.
“[Levandowski] is clearly at the thick of it. He’s a target,” said Heaphy, the former US attorney.
That said, there are many unknowns here and it’s possible that the US attorney could determine that prosecution or investigation is unwarranted. But legal scholars said there are a few scenarios federal prosecutors would likely consider while weighing a criminal probe. Foremost among them, the idea that some Uber executives might have been aware of Levandowski’s alleged theft of trade secrets. The maximum penalty for theft of trade secrets is up to 10 years of imprisonment, and a fine of up to three times the value of the trade secrets at hand.
Uber has emphatically denied in court that the files Levandowski allegedly stole from Waymo ever made it into its systems. But the company has not disputed allegations that Levandowski downloaded files he shouldn’t have from Waymo. “We don’t have any basis for disputing that,” Uber’s attorney Arturo Gonzalez said in court last week, adding that “there’s no evidence” Levandowski consulted the Waymo files once he began working at Uber.
Still, Waymo claims that its allegedly stolen proprietary information did find its way into Uber’s plans for its LiDAR system, a technology that uses rapid pulses of laser light to help self-driving cars measure distance and navigate the world around them. And it insists that same info helped Uber fast-track its driverless car efforts, avoiding years of costly research and development.
This mess of allegations and rebuttals is particularly fraught for Uber given Levandowski’s reportedly cozy relationship with CEO Travis Kalanick. According to Bloomberg, Kalanick courted Levandowski on a series of 10-mile walks across San Francisco, and once said of the engineer, “I feel like we’re brothers from another mother.” Certainly, the question of who knew what and when does seem to be wafting about.
Waymo’s lawyers have not yet deposed Kalanick. In court last week, Uber’s lawyer Gonzalez said “we’ll produce our CEO for deposition. Nobody’s hiding at Uber.” As the case moves toward a trial – the judge denied Uber’s attempt to force it into arbitration on Thursday – the public may eventually have an opportunity to hear Kalanick’s side of the story.
“The relationship itself isn’t proof he aided and abetted a crime,” Heaphy said. “There would need to be evidence Travis was aware of – and took steps to affirmatively facilitate – Anthony’s [alleged] removal of Waymo’s trade secrets, and use of that proprietary information.”
“The only person who can really share that is Anthony himself,” Heaphy said. “He’ll have a huge incentive to do that if he is personally culpable for a criminal violation. Walks and friendships fade away when somebody’s facing a jail cell.”