Waymo Wants Delay of Showdown With Uber

SAN FRANCISCO (CN) – Despite two major victories last week in its trade-secrets war with Uber, attorneys for driverless car company Waymo asked a federal judge on Wednesday to delay a planned October jury trial because it doesn’t have enough time to review smoking-gun evidence Uber recently turned over.

Requesting a Dec. 5 trial date, Waymo’s attorneys also told the judge their client wants more time to conduct discovery on the “hundreds of thousands” of documents Uber produced late last week, and said they may change the list of nine trade secrets they planned to try for misappropriation based on the discovery.

U.S. District Judge William Alsup urged both parties to “try hard” to keep the current trial date, but said he would consider granting Waymo a short continuance after Uber “stonewalled” producing the evidence. But Alsup questioned whether Waymo was exaggerating its predicament, at one point referring to it as “crocodile tears.”

“I have a feeling you’re trying to sabotage that,” Alsup told Waymo attorney Charles Verhoeven, referring to the October trial date. “Sometimes I think Waymo exaggerates with this ulterior motive to fix parts of the case. I don’t know.”

The evidence on which the case now hinges is a due-diligence report Uber commissioned last year to decide whether to acquire Otto, a driverless trucking startup founded by former Waymo engineer Anthony Levandowski. The report purportedly relates to Levandowski’s downloading of 14,000 files containing its trade secrets from Waymo’s server before resigning in January 2016 to start Otto.

Waymo sued Uber and Otto a year later, accusing Levandowski of taking the files to use at Otto and striking a $680,000 deal to sell the fledgling company to Uber. Waymo says Uber bought Otto to get Waymo’s technology after its own driverless vehicle efforts faltered.

Waymo, which was spun off from Google’s driverless car project, has been demanding the report since filing the lawsuit, insisting it would prove allegations that Uber knew about the theft early on. But Waymo only received the report last week after Uber, claiming privilege, opposed producing it at the trial court level and the Federal Circuit denied a subsequent appeal by Levandowski to keep it out of Waymo’s hands.

In a brief opposing continuance, Uber accused Waymo of attempting to delay the trial to shore up its “shaky” case because the due-diligence report didn’t contain the decisive evidence it said it would. In fact, Uber says that far from proving Waymo’s allegations, the report exonerates it by confirming that none of Waymo’s files made it to Uber – noting that a dozen inspections by Waymo of Uber’s servers and driverless devices hadn’t turned up evidence Uber had the files.

“That explains why Waymo is in no hurry to try this case, after requesting and getting expedited discovery and an expedited trial date,” Uber said in its brief.

But Verhoeven on Wednesday called the evidence in the report “highly critical” to Waymo’s claims, revealing that it includes documents containing two of its trade secrets, one of which Otto used.

“Otto was purchased by Uber. So it was used by a company Uber purchased and it assumed all of its intellectual property,” Verhoeven told Alsup in pushing for discovery. “What we’re getting now is showing directly a trail leading to Uber. Right now we see it leading to Otto. But we need to follow that trail.”

The report, Verhoeven said, also revealed Levandowski deleted 24,000 Waymo files from his personal laptop last December, the same day he downloaded the 14,000 originally identified files to his company laptop and then plugged a card reader into it for eight hours. Of the 14,000 files, all but seven were in the 24,000 files that were deleted, according to the report. Waymo believes Levandowski transferred them to the card reader before deleting them, Verhoeven said.

Uber’s lawyers countered that Levandowski had inadvertently downloaded the 14,000 files when he logged onto Waymo’s server. According to both Uber and Waymo, when a user logs onto the server to, for example, download files to take home for work, the entire repository is downloaded.

“I think the court drew an inference. You believe Anthony Levandowski sat at a computer one day and picked 14,000 files to steal them,” Uber attorney Arturo Gonzalez told Alsup, referring to Alsup’s May preliminary injunction order directing Uber to return the files.

“Since he’s taking the Fifth Amendment, how are you going to prove he didn’t know? He’s the head guy and suddenly he becomes a Dumbo and doesn’t know how to use this thing?” Alsup replied. “If this was so innocent, how come he didn’t come in here and tell us?”

Levandowski, who is not a defendant, filed a motion a day ago for a protective order to keep the due-diligence report from being produced in a potential criminal prosecution. He invoked his Fifth Amendment rights early in the case to avoid testifying about the report at his deposition.

In its motion to delay the trial, Waymo said the evidence in the report is strong enough to also justify backing out of its agreement to limit the trial to nine trade secrets, an assertion Verhoeven repeated Wednesday. The company had originally claimed misappropriation of 121 secrets, but Alsup limited it to less than 10 in exchange for an expedited trial date. It now says it is willing to forego an expedited date in order to litigate additional secrets it says the evidence supports.

Alsup suggested proceeding with the October trial on the nine trade secrets and holding additional trials on the rest of the secrets next year if Waymo intends to litigate all of them, but expressed dissatisfaction with the compromise.

“I thought you had agreed you would get to discovery and select your nine and go to trial on those nine and that would be it,” he said. “In my view, that ought to be it.”

Also Wednesday, the judge heard motions for summary judgment by all three parties.

Because the defendants’ motions involved striking two of Waymo’s trade secrets, Alsup closed the courtroom to the public. In their summary judgment briefs, the defendants argue the differences between the circuit boards designed by Uber and Waymo prove Uber didn’t use the first trade secret in its design, and that the second trade secret was not in fact a trade secret.

Waymo countered in its brief that an exact match wasn’t necessary to prove its claim. It accused Uber of changing the design to mirror Waymo’s after consulting with Levandowski, and said the trade secret “reflects” information Levandowski downloaded. The two circuit board designs are the only ones that reflect the trade secret, it added.

Waymo says it learned about Uber’s trade-secret theft last December, when one of Uber’s component vendors accidentally copied it on an email containing a drawing of a circuit board nearly identical to its own.

In its motion for summary judgment, Waymo asked Alsup to strike the defendants’ failure to mitigate damages and unclean hands defenses.

The judge did not indicate how he would rule.

Trial is currently set for Oct. 10.

Verhoeven is with Quinn Emanuel Urquhart & Sullivan in San Francisco. Gonzalez is with Morrison & Foerster, also in San Francisco.

 

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