By Lawrence Hoffman

What’s Happening:

In brief:

  • Waymo ups the ante and gets a powerful Preliminary Injunction along with of a way to be sure that Uber complies;
  • Judge Alsup denies Uber’s request for arbitration and Uber appeals.
  • Uber threatens to fire Levandowski if he won’t cooperate, and proceeds to do just that. But what’s its real motive?
  • Predictably, Levandowski opposes the preliminary injunction.

Waymo Gets a Lyft:

In an article on Sunday, May 14, the New York Times reported that Lyft, Uber’s biggest competitor in the ride-hailing business, will be partnering with Waymo to introduce self-driving vehicles to the general population via fleet services. Lyft already has an agreement with General Motors to test Chevrolet self-driving vehicles and Waymo is already working with Fiat Chrysler on a fleet of minivans in a pilot program in the Phoenix, Arizona area. Waymo is reportedly also negotiating a similar deal with Honda.

The program with Lyft is particularly interesting since it partners Waymo’s advanced technology with Lyft’s expertise in the transportation business.

Lyft is still far behind Uber as a competitor, but aside from its litigation problems with Waymo and its other problems, Uber hardly needs this new problem.

Waymo Doesn’t Get Everything In Its Injunction But It Gets Plenty:

Judge Alsup didn’t stop Uber’s development program, but he did give Waymo largely everything else it wanted. Specifically, Uber has been ordered to (a) put Levandowski in solitary confinement relative to Uber’s LiDAR program, (b) to make sure everyone inside and outside the company that has anything to do with LiDAR knows that Levandowski has been quarantined and that they are to report to the court any violation of the quarantine, (c) to deliver to Waymo all the materials and any copies that it has of Waymo’s documents taken by Levandowski, (d) to use all its power, including threat of termination of employment, to compel Levandowski to return Waymo’s information, (e) to provide full details of any access to the Waymo documents by anyone, and (f) to provide access for Waymo’s counsel and one expert to its entire LiDAR program, and (g) to document in full detail its compliance with the injunction.

In his order granting the injunction, Judge Alsup summarized the state of the evidence as follows:

Waymo has made a strong showing that Levandowski absconded with over 14,000 files from Waymo, evidently to have them available to consult on behalf of Otto and Uber. As of the date of this order, those files have not been returned and likely remain in Levandowski’s possession. The record further indicates that Uber knew or at least should have known of the downloading but nevertheless proceeded to bring Levandowski and Otto on board. Even after this litigation commenced, Uber kept Levandowski as the head of its self driving efforts until his “recusal” from LiDAR development on the day before defendants’ surreply in opposition to provisional relief. Defendants maintain that Waymo’s files never crossed over to Uber’s servers or devices and that “Uber took strict precautions to ensure that no trade secrets belonging to a former employer would be brought to or used at Uber”. These denials, however, leave open the danger of all manner of mischief. For example, it remains entirely possible that Uber knowingly left Levandowski free to keep that treasure trove of files as handy as he wished (so long as he kept it on his own personal devices), and that Uber willfully refused to tell Levandowski to return the treasure trove to its rightful owner. At best (and this has not been shown), Uber may have required Levandowski, as a matter of form, to commit not to use the Waymo files. But even if Levandowski so agreed, his word under these circumstances would be cold comfort against the danger of trade secret misappropriation for Uber’s benefit.


Waymo got a bit of criticism along the way, but only a little. While Judge Alsup found that all the requirements for a preliminary injunction had been satisfied, he criticized Waymo for overreaching both in its definition of its trade secrets, and in requesting adverse inferences to be drawn against Uber based on the evidence and its stonewalling of Waymo’s discovery requests. While he characterized some of the positions taken by Waymo’s attorneys as “gamesmanship” that “undermines its credibility on this motion”, he also noted that “defendants themselves are hardly innocent of gamesmanship”. He concluded by saying that “Waymo has shown at least serious questions going to the merits concerning whether some information within the 14,000-plus downloaded files has been used by defendants and qualifies for trade secret protection.”

Further, the injunction granted Waymo broad additional expedited discovery to support possible extension of the preliminary injunction e.g., to shut down Uber’s LiDAR program altogether pending the trial.

Judge Alsup appointed a San Francisco attorney, John L. Cooper, as a Special Master to supervise Uber’s compliance with the injunction. Cooper was directed to develop a protocol to facilitate his supervision. The protocol has been developed and was approved by Judge Alsup in a May 24, 2017 Order. It doesn’t leave Uber any wiggle room.

The protocol gives Cooper effectively unlimited access to Uber’s facilities and everything in it, and to Uber’s employees, its attorneys, and non-employees with knowledge of Uber’s LiDAR program, virtually at Cooper’s unrestricted discretion. Uber must make weekly or semi-weekly reports of the specifics of its compliance efforts, including the extent to which Levandowski has complied with Uber’s actions to secure his cooperation. If Levandowski refuses to cooperate, Uber must report if he has been fired.

Uber must rectify any deficiencies in its compliance which Cooper identifies. Any failure to rectify the indicated deficiencies are to be reported to the court.

Cooper is to keep Waymo fully informed of his activities and to share with Waymo any documents he obtains in the course of his activities but gives Uber up to 14 hours notice during which it can raise any confidentiality objections. For any documents he does not share, he is to provide a suitable summary.

The protocol even includes examples of Uber non-compliance which must be reported.

The powers given to Cooper can best be described as virtually unlimited. I strongly suspect he will be frequently reporting instances of non-compliance to the court.

Uber Doesn’t Get Arbitration:

Uber’s motion to compel arbitration has been denied, and Uber has appealed to the Federal Circuit. Uber based its arguments on arbitration clauses in two employment agreements between Levandowski and Waymo – agreements to which Uber was not a party. Waymo had initiated two arbitration proceedings against Levandowski in October 2016, based on allegations of employee poaching by Levandowski after his departure. As noted by Judge Alsup in his opinion denying Uber’s motion, “[N]either proceeding has anything to do with Waymo’s claims of trade secret misappropriation against defendants here”.

The Federal Arbitration Act provides that a non-party can enforce an arbitration clause only if permitted under state contract law. Under California law as interpreted by the Ninth Circuit, a non-signatory may enforce an arbitration provision only when:

(1) when a signatory must rely on the terms of the written agreement in asserting its claims against the non-signatory or the claims are intimately founded in and intertwined with the underlying contract, and (2) when the signatory alleges substantially interdependent and concerted misconduct by the non-signatory and another signatory and the allegations of interdependent misconduct are founded in or intimately connected with the obligations of the underlying agreement.

Without going into the details of his analysis, it is sufficient to note that Judge Alsup ruled that neither of the exceptions noted above were met, and therefore Uber could not rely on equitable estoppel.

On May 19, 2017, Uber appealed the denial of its motion to compel arbitration to the Court of Appeals for the Federal Circuit. The following day, it filed a motion to stay proceedings other than those ordered in the preliminary injunction order pending the outcome of the appeal. Waymo has filed its response opposing the stay. The motion is scheduled to be heard on June 7, 2017.

Has Uber Finally Gotten the Message or Is It Still Playing Games:

Judge Alsup is not happy with Uber’s apparent protection of Levandowski and quite explicitly reminded it that, as Levandowski’s employer, it could and should use the treat of dismissal to force Levandowski to be more cooperative. In response, on May 15, 2017, Uber’s General Counsel Salle Yoo, sent Levandowski a very strongly worded demand that it comply fully with Uber so that it, in turn, could comply with the Preliminary Injunction. The letter warned that Levandowski’s failure to cooperate fully would likely result in his being fired. The letter became public as a result of its being attached as an exhibit to a motion filed by Levandowski for the court to modify the provisions of the preliminary injunction as discussed below.

The letter advised Levandowski that:

under penalty of contempt of court you are prohibited from any action that involves any role, responsibility, communication, or contact of any kind with Uber’s LiDAR efforts. You are likewise prohibited from having any communication about LiDAR or anything related to the subject of LiDAR with any officer, director, employee, agent, supplier, consultant, or customer of Uber.

The letter further directed Levandowski to unequivocally deny ever having taken any downloaded materials from Google. If he was unable to do so, he was directed immediately to turn over all the downloaded materials to Uber’s lawyers without keeping any copies, and to direct every person he had reason to believe may be in possession of any downloaded materials to do the same. It noted that the preliminary injunction order specifically stated that “in complying with this order, Uber has no excuse under the Fifth Amendment to pull any punches as to Levandowski” and demanded that “you set these privileges aside and confirm that you will promptly comply with the Court’s Order”.

The letter ended by stating:

As a condition of your employment at Uber, you must comply with all of the requirements set forth in this letter. If you do not agree to comply with all of the requirements set forth herein, or if you fail to comply in a material manner, then Uber will take adverse employment action against you, which may include termination of your employment and such termination would be for cause. (Emphasis in exhibit as filed with the court.)

On May 30, 2017, Uber dropped the other shoe – it announced publically that on May 26, 2017, it actually fired Levandowski. You can read the actual termination letter here if you like, but in essence, he was allegedly fired for failing to cooperate with Uber’s internal investigation required by Judge Alsup in his various discovery orders and in the preliminary injunction.

The letter further states that in his Employment Agreement, Levandowski “represented that [he] had returned  or  destroyed  all  property  and  confidential  information  belonging  to  any  prior  employer” and asserted that his failure to comply with the requirement in the May 15 letter that he reaffirm his representation gives Uber grounds to allege a breach of the representation and constitutes an additional ground for termination for cause.

Under various agreements between Levandowski and Uber, Levandowski has 20 days to remedy the basis for the termination. In theory, therefore, this part of the story is not finished. In fact, it may just be beginning.

Judge Alsup has as much as said he thinks Levandowski has done what he is accused of, and he has put tremendous pressure on Uber under the preliminary injunction to demonstrate that it did not instigate and/or condone Levandowski’s activities even before he left Waymo, or within a short time thereafter and that it is not using Waymo’s LiDAR technology.

Levandowski responded to the May 15 letter by filing a motion to intervene requesting Judge Alsup to modify the preliminary injunction requirements on which the letter was based, in particular, the suggestion that Uber might  fire him if he did not waive his Fifth Amendment rights. As the basis for his motion, Levandowski argued that under established Supreme Court precedent, the Fifth Amendment forbids a government entity from threatening an individual with the choice “between self-incrimination and job forfeiture. The motion is scheduled to be heard on June 7, 2017. The followup termination letter gives him a “see, I told you so” he can present to the court.

Waymo, of course, has opposed Levandowski’s motion on various grounds including lack of timeliness, failure to meet the Ninth Circuit’s requirements for intervention, and lack of substantive support for his government action theory. Uber has, of course, filed papers supporting Levandowski, while carefully avoiding a direct attack on the injunction.

Levandowski, for his part, brought his termination to the court’s attention in his reply to Waymo’s opposition to his motion and Waymo has been given an opportunity to respond.

Is Uber playing games by firing Levandowski? In its brief opposing Levandowski’s motion to intervene, Waymo characterized the May 15 Yoo letter as “ . . .obviously prepared specifically for the purposes of creating a record to support [Levandowski’s] Motion” and not for the purpose of conveying any meaningful desire by Uber to have Mr. Levandowski comply with this Court’s orders”. Is this latest development just more of the same?

If the recurring reports in the media are to be believed, Uber’s reputation is in desperate need of rehabilitation both in court and out and it probably had little choice but to fire Levandowski to demonstrate its compliance with Judge Alsup’s orders. But Levandowski was the star of Waymo’s LiDAR development program and Uber almost surely stole him away for that reason. It cannot cut him loose without deep regret, and would likely not do so except as a matter of self preservation. But why would it do so just eleven days after the May 15 letter? Perhaps the followup termination was all part of a plan to make Uber look good and to bolster Levandowski’s attack on the preliminary injunction to the extent possible.

Before Levandowski was fired, Waymo’s characterization of the May 15 letter was quite plausible. Now, however, it also seems plausible that while Uber is still trying to help Levandowski, it is also using him as a surrogate to further its own interests and will throw him under the bus if that seems to be in its best interests.

Ongoing Discovery:

Apart from the summary by Judge Alsup in his opinion above, from recently filed court papers, we have learned that on February 22, 2016, a term sheet was prepared setting forth the parameters of Uber’s “potential” acquisition of Ottomotto and Otto Trucking, newly formed by Levandowski and Lior Ron, also an ex-Google employee. Further anticipating the possibility that “other ex-Google employees might be joining the venture, and the fact that the autonomous vehicle space is extremely competitive, Otto, its founders, and Uber all thought it was possible that Google would initiate some form of legal action against one or more of the parties to the transaction”. Uber agreed to indemnify certain employees under certain circumstances regardless of whether the deal closed.

In recognition of this risk, the above-mentioned parties entered into a joint defense and common interest agreement (the “JDA”), so that they could jointly evaluate their legal positions against Google, and take steps to strengthen their defenses in the event that any investigation or legal action were initiated against them related to the acquisition. The JDA was not committed to written form until April 11, 2016. Each of the parties retained separate counsel in connection with the JDA.

On March 4, 2016, the lawyers for Uber and Otto jointly retained an investigative firm, Stroz, Friedberg (the previously unnamed third party) to “develop the facts relevant to the lawyers’ work in providing legal advice that identifies and evaluates legal risks” to the JDA parties. According to Uber, it was understood that all communications with, and information provided to the Stroz firm would be subject to the attorney-client privilege, the common interest doctrine and/or attorney work product doctrine. The Stroz firm issued its Report on August 5, 2016, including an Appendix of Exhibits that was provided to counsel for the joint defense group. Levandowski and Ron, as well as certain in-house counsel at Uber also received copies of the Report.

Waymo has been seeking disclosure of the Stroz report for several months and both Uber and Levandowski have done everything their lawyers could dream up to keep from having to disclose the report. They are still fighting over whether the report is covered by some kind of privilege. Waymo filed a motion to compel disclosure of the report. The motion was heard on May 24, 2017 but the result isn’t public yet.

Some additional interesting information has been revealed in a Supplemental Brief filed by Waymo which summarizes deposition testimony of an Uber engineer, James Haslim taken on May 4, the day after the hearing on Waymo’s preliminary injunction motion.

As with most of the substantive filings, much of the detail in the brief concerning the deposition has been redacted, so objective evaluation is not possible. That having been said, Waymo asserts that Haslim admitted that Uber’s LiDAR technology uses at least eight of Waymo’s trade secrets (as previously described in response to Uber’s discovery demands) and that it did not independently develop the technology. He further described in detail (not redacted) Levandowski’s “significant influence” on Uber’s LiDAR development program.

As to Levandowski’s isolation from Uber’s LiDAR program, Haslim testified that the new head of Uber’s LiDAR development team, Eric Meyhofer, continues to work closely with Mr. Levandowski on a day-to-day basis.

We have also learned that Levandowski’s deposition was taken, but he refused to answer questions based on his purported Fifth Amendment rights.

The Discovery Problems:

Realistically, both Levandowski and Uber have impeded discovery, and the terms of the preliminary injunction certainly reflects Judge Alsup’s growing displeasure. If Uber’s compliance does not meet his expectations, I think he would be receptive of a motion by Waymo to hold Uber in contempt.

Be that as it may, bits and pieces of interesting information are becoming public, as indicated above in the discussion of the JDA and in the discussion of Haslim’s deposition. Indeed, assuming Haslim’s actual testimony is accurately reflected in Waymo’s brief, it is likely to have influenced the scope of the preliminary injunction.

Nevertheless, there are still discovery problems. The preliminary injunction directed Magistrate Judge Jacqueline Scott Corley to whom he had previously assigned responsibility to supervise discovery, has ordered Uber “to file an unredacted version of the February 22, 2016 Term Sheet with the Court by 10:00 a.m. May 26, 2017. They may do so under seal.

to provide the court the acquisition term sheet resulting from the early discussions between Uber and Levandowski.

A Current Overview:

In addition to the unresolved disputes discussed above, Uber has filed a Motion to Dismiss Waymo’s California Unfair Competition Law Claim. Uber asserts that this is specifically preempted by Waymo’s California Uniform Trade Secrets Act (CUTSA).

Waymo’s response is that CUTSA preempts only claims based on misappropriation of trade secrets but that it explicitly exempts from preemption claims not based on asserted misappropriation of trade secrets. It further asserts that it has alleged theft of a broad range of confidential information and that a motion to dismiss is premature unless and until a determination is made that all of the confidential information misappropriated by Defendants qualifies as trade secrets and that may plead for relief in the alternative pending such a determination at trial. The motion is heard on June 8, 2017.

To put the present status of the case in perspective, a public trial has the potential for negative impact on Uber’s already tattered reputation, but Judge Alsup’s ruling on the preliminary injunction motion at least did not bring its activities to a dead stop. But given the restrictions that were imposed, Uber looks like it will have a hard row to hoe. And bear in mind that Judge Alsup did explicitly leave open the possibility of extending the injunction.

Bear in mind also, that almost everything in the court file, including hearing transcripts, available to the public includes redactions and much of the file is “under seal”. Therefore, reporting, especially as to merits of the case, is very difficult. Still, we will keep you up to date as best we can.

Law and Order?

Finally, to add to Uber’s and Levandowski’s potential misery, on May 11, 2017 Judge Alsup issued an Order referring the case to the United States Attorney’s Office “. . . for  investigation of possible theft of trade secrets based on the evidentiary record supplied thus far concerning plaintiff Waymo LLC’s claims for trade secret misappropriation”. The Order noted that the evidentiary record is described in detail in the order on Waymo’s motion for provisional relief, and that “[T]he Court takes no position on whether a prosecution is or is not warranted, a decision entirely up to the United States Attorney”.

About the author: Larry Hoffman has a B.S. in Electrical Engineering and Comp. Sci. from Massachusetts. Institute of Technology and a J.D. from the George Washington University School of Law. He has been a lawyer since 1965 specializing in IP law and product liability defense. He is registered to practice before the U.S. PTO, the U.S. Court of Appeals for the Federal Circuit and the state and federal courts in New York, Maryland, and the District of Columbia. His work has included preparation and prosecution of patents in countries throughout the world, and counseling on IP and product safety matters. He has been involved in the trial of close to 100 lawsuits of various kinds. You can reach him at Lawrence@ipatent.co.il.


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