Waymo v. Uber: Leading up to the Tech Giants’ Surprise Settlement - Fordham Intellectual Property, Media & Entertainment Law Journal
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Waymo v. Uber: Leading up to the Tech Giants’ Surprise Settlement

Waymo v. Uber: Leading up to the Tech Giants’ Surprise Settlement

In late February 2017, Google’s self-driving car unit, known as Waymo, filed a lawsuit against Uber alleging that Anthony Levandowski, a former engineer for Waymo, had taken 14,000 confidential documents about self-driving car tech and used the trade secrets contained within to advance Uber’s autonomous vehicle projects.1 Waymo alleged secret dealings between Levandowski, other former Waymo employees, and then-Uber CEO Travis Kalanick, all part of a plot to leapfrog over its own seven-year advantage in self-driving tech.2 All of this came about because of an accidental email that was sent to Waymo from a supplier.3 The email contained an attachment that detailed Uber’s LiDAR circuit board, which is a technology used in an autonomous vehicle to detect obstacles in the environment.4 The similarities of the technology to Waymo’s ultimately made the company suspicious and led to this lawsuit.5

The year leading up to this showdown had been filled with many headlines and embarrassing discovery of emails and meeting minutes of Uber’s that were finally paraded around in court during the opening statements on February 5, 2018.6 Over the past year there have been a great deal of statements and action taken by both Waymo and Uber, but probably none more significant than Levandowski invoking his fifth amendment right against self-incrimination and being fired from Uber for failure to cooperate with the company’s internal investigations.7 All of this had Uber trying to draw attention back to what was supposed to actually be at stake: eight alleged trade secrets, whittled down from over a hundred asserted by Waymo.8. Uber conceded that Levandowski, “did some things at Google he shouldn’t have.”9 Levandowski repeatedly took meetings with Uber executives, including founder and former CEO Travis Kalanick, while he was still employed at Google.10 However, it wasn’t clear whether Uber ever used or received Waymo’s trade secrets, or if the alleged trade secrets were even trade secrets at all.11 However, Uber’s likely fear was that all the jury needed to hear is that the irreplaceable engineer Anthony Levandowski took 14,000 documents from Google before starting Ottomotto, a company that was shortly thereafter acquired by Uber.12

Those facts bring us to now, when after a yearlong legal battle and just five days into trial, Waymo and Uber reached a surprise settlement in their ongoing trade secret dispute. Waymo had originally sought a $1 billion settlement last year before the trial was underway, but Uber rejected that deal.13 An attorney for Waymo announced the settlement the morning of February 9 and was met with shock from reporters and members of the public who had crowded into the courtroom in San Francisco.14 Waymo’s statement after the settlement reiterates that its main goal was to protect the intellectual property of Waymo now and into the future, just like it had sought in the original settlement offer.15 The deal is believed to be all equity and no cash according to a source familiar with the settlement.16 This ultimately means that Waymo will now be invested in Uber’s future even more than it already was.17 As well, according to a source familiar with the matter, Uber cannot use any of Waymo’s hardware or software trade secrets as one of the conditions of the settlement.18

This was quite the turn of events for what many believed was going to be a very lengthy, revealing, and costly legal battle between the two companies.19 Uber’s statement after the settlement announcement expressed regret and was apologetic to its employees for the distracting nature of this case over the past year.20 Overall, this is a big win for Waymo, an Alphabet subsidiary, and quite the outcome for what boiled down to an accidental email Waymo received from a supplier.21 This appears to solve the legal issues between Waymo and Uber regarding the trade secrets since the case was dismissed with prejudice after the announcement of the settlement. Since Google was already an early investor in Uber, this equity settlement appears to bring the two tech giants even closer together than they previously were. As the race to develop fully autonomous vehicles and getting them on the road continues this settlement should help the two companies refocus on that and not lengthy and costly legal battles against each other.

  1. See Aarian Marshall, Greed, Ambition, and Trade Secrets: Welocome to Waymo v. Uber, Wired (Feb. 1, 2018), https://www.wired.com/story/waymo-uber-self-driving-car-trial-preview/ [https://perma.cc/GJ9P-8L97].

  2. Id.

  3. See Selena Larson, Waymo accuses Uber of “cheating” as trade secret trial begins, CNN Tech (Feb. 5, 2018), http://money.cnn.com/2018/02/05/technology/waymo-versus-uber-trial/index.html [https://perma.cc/X2Z2-Q3U2].

  4. Id.

  5. Id.

  6. See Sarah Jeong, The battle of the damning emails begins with Waymo v. Uber opening statements, Verge (Feb. 5 2018), https://www.theverge.com/2018/2/5/16975878/waymo-v-uber-trial-opening-statements-travis-kalanick-emails [https://perma.cc/DXT7-KKAB].

  7. See Marshall, supra note 1.

  8. See Jeong, supra Note 6.

  9. Id.

  10. Id.

  11. Id.

  12. Id.

  13. See Dan Levine, Alphabet’s Waymo demanded $1 billion in settlement talks with Uber, Reuters (Oct. 12, 2017), https://www.reuters.com/article/us-alphabet-uber-lawsuit/exclusive-alphabets-waymo-demanded-1-billion-in-settlement-talks-with-uber-sources-idUSKBN1CH0QC [https://perma.cc/L87T-Z47P].

  14. See Sean O’Kane, et al., Waymo and Uber reach a surprise settlement, Verge (Feb. 9, 2018), https://www.theverge.com/2018/2/9/16995254/waymo-uber-lawsuit-trial-settlement [https://perma.cc/QQ44-J4AB].

  15. Id.[footnote] So what exactly did the two tech giants agree to in this settlement?

    Under the reported terms of the settlement, Waymo is getting 0.34 percent of Uber’s equity at the company’s $72 billion valuation, which works out to a value of around $245 million, and both sides are responsible for paying their own legal fees.[footnote]Id.

  16. Id.

  17. Id.

  18. Id.

  19. See Marshall, supra note 1.

  20. See O’Kane, supra note 14.

  21. See Larson supra note 3.

Richard Gauthier

Richard Gauthier is an LL.M. candidate in the Intellectual Property and Information Technology Law program. Richard recently received his JD from New England Law | Boston with a concentration in Intellectual Property.