Waymo-Uber War Over Driverless Technology Starts With Theft Claim

SAN FRANCISCO (CN) – Lawyers for Uber tried to convince a jury on the first day of a long-awaited trial on accusations it stole rival Waymo’s driverless car technology that Waymo’s motive for suing was to keep “its biggest competitor” from developing driverless cars for the ride-hailing market.

“This case is about Waymo wanting to stop its biggest competitor, Uber,” said Uber attorney Bill Carmody during Monday’s opening statements in San Francisco. “It realized the way to make big dollars in self-driving was to compete against Uber in ride-sharing.”

A year ago, Waymo sued Uber and co-defendant Ottomotto, a driverless trucking company started by Anthony Levandowski, the engineer at the center of the case. The Google spinoff claims Levandowski downloaded 14,000 proprietary files from its server before abruptly resigning in January 2016, and used them to set up Ottomotto that same month. The files include ones related to Waymo’s secret LiDAR system – a laser-based scanning and mapping technology its driverless cars use to see their surroundings.

Uber acquired Ottomotto for $680 million in August 2016, three months after the startup launched publicly. Waymo claims Levandowski and Uber’s senior executives met to discuss forming and acquiring Ottomotto while Levandowski was still at Waymo as a ruse for stealing Waymo’s technology.

“This case is about two competitors, where one competitor decided it needed to win at all costs,” Waymo’s attorney Charles Verhoeven told the jury on Monday. “That losing is not an option. That they would do anything they needed to do to win, no matter what.”

Waymo has argued throughout the year-long case that Uber used at least eight of its LiDAR-related trade secrets in its driverless cars in a bid to catch up to Waymo, which has a seven-year head start.

Uber rejected the allegations, first denying that Levandowski took the files, then acknowledging he took them but insisting the information didn’t make it to its servers or into its cars. Moreover, the stolen information doesn’t constitute a trade secret, it claims.

On Monday, Carmody added to Uber’s defense by painting the lawsuit as an attempt by Waymo to put its fiercest competitor out of business. Although a due-diligence investigation conducted for Uber before the acquisition found that Levandowski poached 16 engineers from Waymo after resigning, Carmody said the engineers left because they weren’t “happy” at Waymo. Levandowski called Waymo’s self-driving program “broken” and butted heads with its chief executive John Krafcik, according to Krafcik’s testimony Monday.

Waymo didn’t name Levandowski as a defendant in the case. But it is suing him in arbitration for poaching employees, according to U.S. District Judge William Alsup who is overseeing the trial.

Carmody said Google and Waymo executives sounded the alarm after the exodus of the company’s engineers to Ottomotto and Uber, because “the lifeblood of its self-driving car program is talent.” Carmody quipped that Larry Page, “the founder, you know, Mr. Big at Google,” became upset at Levandowski’s departure, afraid he would launch a competing company that would edge Google out of the ride-hailing market, valued at trillions of dollars.

So Waymo, Carmody said, began investigating Levandowski’s departure and learned he downloaded the files from its server. But Sasha Zbrozek, the Waymo engineer who built the server, told the company’s lawyers that the files were low-value enough that Waymo had considered hosting them off its infrastructure. Waymo sued anyway, and its parent company Alphabet followed up with a $1 billion deal to develop driverless cars with Lyft, Uber’s biggest competitor in the United States, said Carmody.

Krafcik denied the narrative. “What we came to find was that aspects of our technology were taken from us in an unfair fashion,” he said. “That’s why we filed the lawsuit.”

Backing up his assertion, Krafcik said five Waymo and Google self-driving employees quit to start their own companies, including Argon AI, a Pittsburgh, Pennsylvania-based driverless car startup with $1 billion in backing from Ford to build a driverless car by 2021. Yet Waymo didn’t sue them for taking trade secrets, he said.

Carmody interjected: “Of all of those companies, none of them are situated like Uber, where it is directly competing with Waymo” for the ride-hailing market, he told Krafcik.

“As we sit here today, and you’re under oath, are any of these other companies competing with Uber in the ridesharing space?” Carmody continued.

“They’re not in the ridesharing space today,” Krafcik replied.

The trial is scheduled to run through Feb. 23, but could reach into the beginning of March. As Uber makes its case over the next month, it will seek to distance itself from Levandowski – whom it fired this past May for refusing to cooperate with its probe into Waymo’s allegations – a strategy Carmody debuted Monday.

“Uber regrets ever bringing Anthony Levandowski on board,” he told the jury.” And the reason they do so is, for all his time at Uber, all Uber has to show for Anthony Levandowski is this lawsuit. This is it.”

Carmody is with Susman Godfrey in New York. Verhoeven is with Quinn Emanuel Urquhart & Sullivan in San Francisco.

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