Uber Technologies Inc., the ridesharing startup currently valued at billions of dollars, and Waymo, Google’s driverless car company, finally reached a settlement in their ongoing trade secrets lawsuit.
In the lawsuit, Waymo had alleged that former engineer, Anthony Levandowski, stole confidential files full of trade secrets before leaving to build his own startup, Otto. Waymo claims that Levandowski used that information to help advance Uber’s self-driving technology once his startup was acquired by Uber in 2016.
Waymo alleged that even Uber’s CEO at the time, Travis Kalanick, knew of the theft of trade secrets from Waymo. According to WIRED, Charles Verhoeven, Waymo’s lead lawyer, argued in the lawsuit’s opening statements that “Mr. Kalanick and his team engaged in a plan that they kept secret to induce Mr. Levandowski to come over, pay him millions of dollars tied specifically to whether or not he actually developed this technology in a very short time frame, and caused him to come over and copy the technology they had already developed for Waymo.”
According to CNN, Waymo accepted a settlement offer from Uber, which agreed to a deal that includes 0.34 percent of Uber’s equity at a $72 billion valuation, which works out to about $245 million, two sources familiar with the matter said. Waymo had initially asked for maximum damages of $1.8 billion.
Uber has also committed to a legally binding agreement to not use Waymo hardware or software intellectual property in their own self-driving car technology.
“We have reached an agreement with Uber that we believe will protect Waymo’s intellectual property now and into the future,” a Waymo spokesperson said in a statement. “We are committed to working with Uber to make sure that each company develops its own technology. This includes an agreement to ensure that any Waymo confidential information is not being incorporated in Uber Advanced Technologies Group hardware and software.”
The investigation that led to the lawsuit began in late 2016, when Waymo accidently received an email from one of its suppliers with an attachment that detailed Uber’s LIDAR circuit board.
LIDAR, which stands for “Light Detection and Ranging,” is a technology that uses pulsating laser beams to measure the distance between objects, and it is crucial to self-driving technology.
In the lawsuit, Waymo claimed that the design of this board looked suspiciously similar to its own design, and that Levandowski took Google trade secrets related to LIDAR to Uber.
Uber CEO Dara Khosrowshahi said in a statement that the company should have handled the acquisition of Otto, a self-driving truck company founded by Levandowski, differently.
However, he said that Uber does not believe any trade secrets made its way to the company.
According to Justin Hughes, an intellectual property law professor at Loyola Law School, it may have been difficult for Waymo’s attorneys to prove that Uber used the trade secrets Levandowski allegedly stole. This is because California has strong protections in place for employees to take their skills and knowledge to different companies, and the bar to prove misappropriation of trade secrets is high, according to CNN.
For years, Waymo has been the leader in self-driving technology, with more than 4 million miles of public road testing behind it, according to WIRED. Uber is close behind, launching its own self-driving vehicle program in 2015 after hiring approximately 40 robotics researchers from Carnegie Mellon University. The previous maximum damages of $1.8 billion asked for by Waymo could have severely crippled Uber.
The company has faced a plethora of legal problems, bad publicity in recent years and increased competition from other ride-sharing startups like Lyft, which led to the ousting of Kalanick, former Uber CEO. During the trial’s first few days, multiple employees testified that Uber believes it needs to develop self-driving technology in order to survive.
The lawsuit has only led to increased notoriety at Uber, regarding both the company and its self-driving car program. Uber is still lagging behind Waymo, only hitting 2 million miles of testing in autonomous mode on public roads in December of last year.
The increasing notoriety of Uber, fears regarding the self-driving car program’s future and Waymo’s increased efforts, including its announcement that it was going to start a self-driving car network in Phoenix, have led to some of Uber’s top engineers working in this area to leave.
Whatever advantage they may have gained from hiring Levandowski is diminished by how much negative publicity Uber has gained via the lawsuit. “Uber regrets ever bringing Anthony Levandowski on board. And the reason they do so, is because, for all his time at Uber, all they have to show for bringing on Anthony Levandowski is this lawsuit,” said Bill Carmody, an attorney for Uber from Susman Godfrey, according to Forbes.
A spokesman for Uber said the company is looking forward to moving on now that the case is done. “We’re happy to put this behind us and get back to business — serving riders, drivers and cities, and competing on the strength of our ideas and our technology,” he said in a statement.
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