Uber reaches settlement with Waymo in dispute over trade secrets

Russ Mitchell and Tracey Lien, Los Angeles Times on

Published in Business News

SAN FRANCISCO -- Uber and Waymo, the driverless car arm of Google's parent company, Alphabet, have settled their lawsuit over allegations that Uber stole driverless car trade secrets.

In a statement posted on its website Friday morning, Uber CEO Dara Khosrowshahi struck a conciliatory tone, expressing regret over the company's actions.

"To our friends at Alphabet: we are partners, you are an important investor in Uber, and we share a deep belief in the power of technology to change people's lives for the better," he wrote. "Of course, we are also competitors. And while we won't agree on everything going forward, we agree that Uber's acquisition of Otto could and should have been handled differently."

Under the settlement, Uber will pay Google $245 million in Uber equity and agree not to use the company's trade secrets.

The settlement came in the first week of the trial. Waymo had sued Uber, alleging that the ride-hailing start-up possessed stolen trade secrets covering driverless car technology.

Over four days in U.S. District Court in San Francisco, a string of witnesses cast Uber in a bad light, including damaging testimony from former Uber board member and venture capitalist Bill Gurley, who admitted he did not read key due diligence documents before voting to pay alleged trade secret thieves $592 million.

The money bought a driverless truck company named Otto, run by former Google engineer Anthony Levandowski.

Khosrowshahi was named CEO in August in large part to boost Uber's image. Sexual harassment, loose protection of customer data, spying on journalists, and encouragement of an over-aggressive bro culture were just a few of the controversies that led the Uber board to force out co-founder Travis Kalanick as CEO in June.

A former Expedia CEO, Khosrowshahi pledged to improve Uber's image and culture as he prepares for a public stock offering as early as 2019.

Continuing witness testimony and resulting bad press "would have hurt their valuation," said Rebecca Lindland, analyst at Kelley Blue Book. It's "incredibly important that Uber clear their decks, get themselves back on solid footing and get this distraction out of the way," she said.

Neither company said it won or lost, but in a prepared statement, Kalanick, who remains an Uber board member, expressed vindication and theoretical victory: "As Uber's statement indicates, no trade secrets ever came to Uber ... the evidence at trial overwhelmingly proved that, and had the trial proceeded to its conclusion, it is clear Uber would have prevailed."

In the settlement, Uber did not admit to any legal wrongdoing.

--Sponsored Video--

"To be clear, while we do not believe that any trade secrets made their way from Waymo to Uber, nor do we believe that Uber has used any of Waymo's proprietary information in its self-driving technology, we are taking steps with Waymo to ensure our Lidar and software represents just our good work," Khosrowshahi said.

Trial testimony made clear that Levandowski downloaded 14,107 proprietary documents from Waymo to his personal laptop before leaving to lead Uber's self-driving project in January 2016 and copied those files to external devices.

Although those files weren't found on Uber servers, computer forensics experts testified that the information could be stored practically anywhere.

Waymo charged that the downloaded files contained eight trade secrets that Uber used in laser-sensor technology to try to catch up with Waymo in the potentially hot new market for self-driving cars. If the trial had continued to the end, the jury would have been instructed to determine whether the information was truly trade secrets, and that Uber possessed them.

In its own statement, Waymo said it is committed to "working with Uber to make sure that each company develops its own technology."

"We have reached an agreement with Uber that we believe will protect Waymo's intellectual property now and into the future," the company said.

"We have always believed competition should be fueled by innovation in the labs and on the roads and we look forward to bringing fully self-driving cars to the world."

(c)2018 Los Angeles Times

Visit the Los Angeles Times at

Distributed by Tribune Content Agency, LLC.



blog comments powered by Disqus