Judge Alsup driving forward Uber-Waymo trade secret dispute amongst "red flag" disclosure hearings

On this Memorial Day Weekend, the AmeriKat's friend Chi has
better things to do then ponder trade secrets  and interim hearing strategy
- like sitting on a hot tub roof
(with thanks to Kat friends Jim Pooley & Laura-Jean Anderson)

As the AmeriKat reported a several weeks ago, the driverless car legal battle between Uber and Alphabet's Waymo is heating up.   Readers may recall that the dispute, commenced in February, centers on Waymo's accusation that a key engineer and ex-Google employee, Anthony Levandowski, had misappropriated its trade secrets in the LiDAR technology (by way of some 14,000 documents - see previous Kat post here) bringing them to his start-up autonomous truck company, Otto, before joining Uber.  Uber dispute this, claiming that its own Carnegie Mellon poached LiDAR experts independently developed its technology before the arrival of Levandowski (who is not a named defendant), as well as using pre-purchased technology from Velodyne.

Since the Kat last reported on the trade secret and patent dispute two months ago, the following has transpired:

• Levandowski asserts his Fifth Amendment rights against self-incrimination and then later steps down as head of Advanced Technologies.   

• Warnings (and an order) from US District Judge Alsup is given over excessive redactions in the proceedings.  Pleading the Fifth also potentially impedes Uber's ability to advance discovery documents that serve as its defence (as opposed to Levandowski's defence).  

• Judge Alsup rules that Levandowski's Fifth Amendment right does not shield him from having to disclose a due diligence document that was prepared when Uber was acquiring Levandowski's start up, Otto.  

• Judge Alsup therefore orders Levandowski to provide information or logs setting out documents over which he claims privilege and which he asserts should not be disclosed in the proceedings.  The due diligence report was ordered to be included in this log.  Judge Alsup wrote that:  

"At the risk of repetition, the very purpose of a privilege log is to allow a fair way to test a claim of privilege. That traditional privilege log requirements should be verboten merely because they might connect the dots back to a non-party in a possible criminal investigation is a sweeping proposition under which all manner of mischief could be concealed."

• Uber's request to have the dispute decided in arbitration is rejected on the basis that there was not enough "intertwining" between the claims in the trade secret dispute and the arbitration clauses that were made between Levandowski and Google as part of his employment agreements. 

• Waymo is partially granted their preliminary injunction motion (sealed order due to confidential information).  

• Judge Alsup refers case to US Attorney for investigation of the possible theft of trade secrets. This in no way guarantees that the US Attorney's Office will in fact open a criminal investigation.  

• Uber  reportedly warns Levandowski to comply with its court orders or risk being fired.

• Uber files notice that it will appeal the arbitration ruling.  

• On Wednesday, the Court orders Levandowski to do better on his privilege logs by Friday.  

• On Thursday, US Magistrate Judge Corley says Uber's disclosure (or non-disclosure) of key documents (including due diligence report - argued to be protected by attorney-client privilege - and term sheet) "raised a giant red flag".  Orders the unredacted term sheet be disclosed. 

• Trial has been set for October 2017.  

Like most cases concerning patent and trade secret infringement disclosure is key.  With a key individual refusing to testify this is even more so in this case.  Obtaining key documents relating to the acquisition of Levandowski's Otto by Uber will be crucial for Waymo especially given the almost $700 million price tag.  Although it is rare to have a smoking gun document in litigation (as much as litigators dream of one), even if the documents do not contain any killer information, refusing to disclose them and cloaking them in mystery before the Court may not be the best tactic.  The Court's interest level has been raised and now, by refusing to voluntarily disclosure documents, any information contained in them that could have otherwise been explained could now look particularly damaging.  As someone once told the AmeriKat, perception can be all important even if it turns out to be based on incorrect information.  

Merpel believes that when judges start banding around the words "red flags" and "obuscation" in court, it is time to find the nearest desk to hide under.  Further, Merpel muses, it is all making sense why Uber wants this dispute to go behind the closed doors of arbitration and is therefore appealing Judge Alsup's decision on this point.

The IPKat will keep readers updated as the case progresses.    In the meantime, the AmeriKat recommends reading this Recode article given it pre-dates the dispute and, with the benefit of hindsight, makes the Otto-Uber deal and resulting dispute click into place.  

For those with Pacer accounts, the case is Waymo LLC v. Uber Technologies Inc., 17-00939, U.S. District Court, Northern District of California (San Francisco)