Parties Settle Case Involving Self-Driving Car Secrets and Shadowy Chinese Companies

WeRide’s latest L4 autonomous driving vehicle, Nissan LEAF 2. (Photo via WeRide.ai)

(CN) — A case involving allegations of engineers absconding to China with disk drives full of autonomous vehicle technology trade secrets has come to an end after all parties agreed to a settlement Friday. 

U.S. District Court Judge Edward Davila dismissed the case with prejudice after a Silicon Valley self-driving company called WeRide Corp. agreed to drop its trade secrets case against its former engineer Kun Huang, Jing Wang and a nebulous network of Chinese self-driving companies called Zhong Zhe Xing Technology Co. LTD., 9 ALLRIDE.AI, ALLRIDE.AI Inc., Kazir Inc. and ZKA Inc.

The case stems from the actions of Huang, who formerly worked as a top engineer for WeRide before he quit hastily in 2019 after downloading a bevy of proprietary files onto his personal computer. 

WeRide said Huang left with vital source code that could assist the shadowy network of Chinese films in getting ahead in the frantic race to become the first company to bring autonomous vehicle technology to market. 

Soon after Huang joined them, the companies in China began showing off their software capabilities in demonstrations to investors, and the design features displayed many similarities to WeRide’s product.

The race to bring self-driving technology to market features some of the best engineers in the world working for various startups who compete against the titans of Silicon Valley — including Apple, Google, Tesla and others. 

The technological race has also prompted several trade secret cases, most notably involving Anthony Levandowski, a former Google engineer who pleaded guilty in March to stealing proprietary information from Google subsidiary Waymo and taking it to his new job at Uber. 

While the present case involving Huang never made it to trial, it appeared that WeRide was building a good case and convinced Davila to grant a preliminary injunction barring Huang from using any of the source code he took with him after leaving the company. 

“The public interest will be served by protecting both intellectual property rights and the court’s authority to enforce its orders,” Davila wrote in a 20-page order issued this past November. “The court will enjoin defendants from creating any new corporate entities.”

Davila barred Wang and Huang from creating new companies because WeRide accused the two men of conspiring to create a system of shell companies for the express purpose of escaping detection in the trade secrets cases. 

The judge indicated WeRide was likely to succeed on the merits of its lawsuit.

At the time, WeRide sought to block Wang, who was tangentially affiliated with the Chinese companies but not officially listed as an employee. Wang claimed he was merely providing introductions for the fledgling companies and trying to facilitate connections to investors.

Davila initially declined to enjoin Wang but reversed that decision after Wang formally accepted the position as CEO of AllRide.AI.Inc, a move Wang’s lawyers acknowledged during the October 2019 hearing.

But Davila went farther and enjoined Wang in his personal capacity too. He also forbade Wang and Huang from setting up any other corporations after WeRide accused Huang of creating a shadow company called Kazir based in Silicon Valley and essentially proceeding with business as usual to avoid the court’s first preliminary injunction.

The plaintiffs argued Wang was the architect of the entire scheme while purporting to be uninvolved with any of the companies. But they said Wang had his wife Rong Wang buy all the shares of the Chinese parent company Smart Car AI Holdings, which owned all of the aforementioned corporations accused of trade secret theft.

The fact that Davila awarded a preliminary injunction and then agreed to expand it boded ill for the defendants in the case and could have contributed to a swift settlement in the case. 

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