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March 20, 2017 11:00 AM, EDT
Uber Says Trade Theft Case Is Between Otto Chief and Google
Otto

SAN FRANCISCO — Uber wants an explosive patent infringement lawsuit that could be worth millions sent to binding arbitration rather than open court.

The request, which Uber expects to file within the next two weeks, adds a new twist to what promises to be a high-stakes battle over the future of self-driving car technology.

Waymo, which started as Google's self-driving car unit, filed suit Feb. 23 claiming Uber’s laser sensor tech for self-driving cars is based on data stolen by former Google engineer — and now key Uber executive — Anthony Levandowski.

Uber initially responded that the “baseless” charge was just an attempt to slow a competitor.

Now Uber plans to argue that the matter belongs not in court but in private binding arbitration because that's what Levandowski's original employment contract with Google required. Waymo, the new name of Google's self-driving car project, did not respond to a request for comment.

Uber announced its intention March 16 when both sides met for the first time in a preliminary case management conference in the courtroom of Judge William Haskell Alsup in U.S. District Court in the Northern district of California in San Francisco.

The company's reasoning: The issue of the stolen trademarked information and intellectual property is between Levandowski and his former employer because the alleged theft took place while Levandowski was employed at Alphabet's Google.

Uber still would be involved in the private arbitration but would presumably benefit by not having the case aired in public court.

Arbitration generally is “quicker, cheaper and more efficient, and it’s confidential and private,” said Stephen Hirschfeld, a partner at Hirschfeld Kraemer, a San Francisco-based employment law firm.

Still, it would be unusual for Uber to ask for arbitration because it doesn't really have the standing to do so, as Levandowski’s employment contract was with Google, he said.

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Google and the judge would have to agree to it, which “is not a slam dunk,” he said.

The case hinges on who developed the version of Light Detection and Ranging sensor technology, called LiDAR, that Uber's self-driving cars depend on to "see" the world.

Should the facts prove that Uber’s LiDAR tech is based on stolen information, Uber could at the very least be forced to pay a licensing fee to use the sensors, which read and map the physical environment and are critical to allowing vehicles to drive autonomously.

RELATED: Otto accused of stealing Google's self-driving secrets

Tech and car companies alike are in a furious and expensive race to develop self-driving cars, which promise to cut traffic deaths, reduce urban congestion and lower ride-hailing costs.

Google-parent Alphabet's seven-year-old program arguably is the emerging field’s most advanced.

Uber’s interest in self-driving cars stems from CEO Travis Kalanick’s quip that the most expensive part of his business model is “the dude in the car.”

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Uber has sought to rival Google, in part by buying up talent. That included more than 40 robotics researchers from Carnegie Mellon University in 2015 and then in August 2016, the self-driving truck company Otto.

Otto, crucially, has an almost fully realized LiDAR system, used to aid autonomous vehicles in sensing their surroundings. That was technology that Uber lacked and which it needed to move its ambitious self-driving plans forward.

That is the heart of the suit. Waymo alleges that in December 2015, former Waymo self-driving car engineer Levandowski stole 14,000 files containing plans and technical specifications, then left the company a month later. The stolen documents included plans for Waymo's LiDAR system, the suit alleges.

In February 2016, Levandowski founded the self-driving truck company Otto, which came out of stealth mode in May and which Uber bought in August.

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When Uber bought Otto, Kalanick made Levandowski his autonomous car chief.

A week ago, Waymo filed an injunction to have Uber stop using the allegedly stolen technology.

Levandowski has not addressed the matter publicly. Although he made an appearance at Mobile World Congress in Barcelona recently, the suit was not brought up in his session.

A recent Bloomberg News report called into question the timing of Levandowski’s departure from Google and suggested that he had been in private conversation with Kalanick before leaving Google and starting Otto.

The report said that Levandowski’s reason for downloading the files was to be able to work from home. It also described the precocious engineer as promoting a cavalier attitude at Otto, where employees jokingly passed around stickers that read “Safety Third.” Uber did not respond to a request for comment on the Bloomberg report.

Uber has faced a string of PR challenges in the past weeks, including charges that its culture is toxic, with accusations that it promoted a cut-throat environment that was particularly discriminatory to its female employees.

A searing blog post in February by ex-engineer Susan Fowler has caused a crisis that has precipitated an internal investigation as well as a search for a chief operating officer to guide the company as Kalanick improves his leadership abilities.

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