Last week, Waymo LLC (a subsidiary of Google’s parent company Alphabet, Inc.) filed suit in the Northern District of California against Uber Technologies, Inc. and Otto Trucking LLC for misappropriation of trade secrets, patent infringement, and unfair business practices. The case is sure to become one of the first high-profile cases alleging claims under the federal Defend Trade Secrets Act (DTSA) (another being the claims brought against Google and Alphabet by Space Data in June 2016, which this blog covered here). Waymo describes itself as a “self-driving technology company,” which for the last seven years has been developing technology related to self-driving cars, including a laser system used to help the car navigate known as LiDAR (“Light Detection And Ranging”). In January 2016, one of Waymo’s managers, Anthony Levandowski, left Waymo and launched Otto, a new company focused on self-driving car technology. Then, in August 2016, Uber acquired Otto for $680 million.
According to Waymo’s Complaint, Waymo became suspicious that Otto was using its technology when it inadvertently received an email from one of its LiDAR-component vendors which was apparently intended for Otto, and purported to attach a drawing of an Otto circuit board. According to Waymo, the Otto circuit board bore “a striking resemblance to” Waymo’s LiDAR circuit board. Waymo also noted the high valuation placed on Otto just a few months into its creation, and the departure of several Waymo employees for Otto following Levandowski’s own departure. Waymo contends that it then conducted an investigation and discovered that Levandowski had taken over 14,000 confidential Waymo files and uploaded them to a personal hard drive before his departure, after which he reformatted his laptop to erase the evidence of what he had done. Waymo alleges further, similar acts by Levandowski and the other departing employees.
In addition to serving as yet another reminder about the importance of strong internal information security policies (even Google, by its own Complaint, appears to have let a high-ranking employee depart with thousands of highly-confidential files and failed to detect the breach for months), the case will likely be another big test for the DTSA, and how it interacts with the Uniform Trade Secrets Act.