Waymo’s recently filed case against Uber continues to unfold with some potentially important developments. The case, which began in late February when Waymo (which shares a corporate parent with Google) accused Uber of misappropriation of trade secrets under the DTSA, patent infringement, and unfair business practices (covered by this blog here) had three recent decisions issue, all on the same day.
First, on May 11, U.S. District Judge William Alsup issued an order granting in part and denying in part Waymo’s motion for a preliminary injunction. The court’s order is sealed, and neither Uber nor Waymo have commented on its contents.
Second, Judge Alsup sua sponte referred the case to the United States Attorney for investigation of possible trade secret theft. Judge Alsup based this decision on the evidentiary record, which was described in detail in the aforementioned injunction decision (and therefore sealed).
Third, Judge Alsup denied a motion to compel arbitration filed by Uber. Waymo’s trade secret misappropriation claim lies with the alleged theft of over 14,000 files by now former Waymo employee and current Uber employee Anthony Levandowski. While Mr. Levandowski was working at Waymo, he signed two employment agreements, each of which contained an arbitration clause. Waymo has exercised those clauses, and is currently engaged in two arbitration proceedings against Mr. Levandowski. Under California law (the law of both arbitration agreements), non-signatories may enforce arbitration agreements in two instances: (1) when the signatory is bringing claims against a non-signatory and the claims are 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 misconduct claim is founded in or intimately related to the underlying agreement. The court characterized both of these prongs as variants of equitable estoppel. The court found that merely relying on the confidential agreements in the arbitration agreement was not enough to make the resulting trade secret claims intertwine with the arbitration agreements (i.e., Waymo’s claims reference but don’t rely on the agreements).
In the third decision, the court noted that Mr. Levandowski has exercised his Fifth Amendment privilege, which has potentially impaired discovery as well as Uber’s ability to construct a complete defense. One wonders if (1) Judge Alsup’s referral to the USAA is borne out of this frustration, and (2) the USAA’s role in a potential criminal case could eliminate or diminish the impact of Mr. Levandowski’s claim of privilege on discovery in the civil case, or possibly amplify its effect. This case will continue to be a bellwether for DTSA jurisprudence, especially now with a possible criminal aspect.