Criminal Probe of Uber May Freeze Waymo Trade Secrets Trial

A federal criminal investigation into Uber Technologies Inc. to determine if the company had stolen trade secrets in unmanned vehicles in Waymo could freeze a high-risk suit between the two companies.

Depending on the scope of the investigation, previously reported Wednesday by Bloomberg, executives or engineers whose testimony is critical to the trial may choose to assert their constitutional right not to self-incriminate and refuse to testify.

Overall, the focus of the investigation would require a delay and the court would consider suspending the trial, according to attorney Jim Pooley, a Silicon Valley-based trade secret expert who followed the case. “Everything stops at the civil trial pending the outcome of the criminal case,” he said.

Any request for delay because of the criminal investigation would likely come from Uber or his co-defendant Otto Trucking, a company founded by Anthony Levandowski, the engineer in the center of the case who argued for the Fifth Amendment split. Levandowski is not named as a defendant in the trial.

US District Judge William Alsup in San Francisco would have decided to suspend the civil case on Dec. 4. The reason for the delay was to give Waymo more time to evaluate a 2016 report commissioned by Uber to verify his involvement with Levandowski. A criminal investigation is not entirely surprising since Alsup asked federal prosecutors in May to investigate the allegations in the case.

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That said, most preliminary exchanges of information and testimony have already been exchanged by both parties in civil litigation, which can lead to a criminal investigation without interfering with civil action. Last week Uber and Otto Trucking opposed the postponement of the trial, which may also indicate that business leaders believe they have little to fear from filing.

Abraham Simmons, a spokesman for the US Attorney’s Office in San Francisco, said the office does not comment on the existence or lack of investigation. Matt Kallman, a Uber spokesman, declined to comment. Miles Ehrlich, Levandowski’s lawyer, did not immediately respond to a request for comments sent by e-mail.

In his complaint, Waymo, a Google unit of Google Alphabet Inc., accused Uber of building LiDAR systems with stolen designs in Waymo. LiDAR systems use laser beam reflection to detect the surroundings of a vehicle so that the car can avoid pedestrians, obstacles and other vehicles. Technology is the key to Waymo, Uber and any other company that wants to enter the market for independent vehicles.

Second shoe

The effect in the civil case of a result in the criminal case depends on the amount of a “party” that exists between the allegations in each, says Pooley. “It is important to keep in mind that criminal charges may be based on a simple attempt to misappropriate, or a conspiracy to embezzle, while, in general, a civil matter requires real property,” he said. “It is conceivable that there may be a guilty verdict in a criminal trial, with little effect on the civil case.”

The criminal investigation conducted by federal prosecutors on Waymo’s allegations is the second shoe to resign, Pooley said. He warned that so far this is just an investigation, a step among others that could lead to the imposition of charges. “This is not the second of two shoes, they are many shoes and may decide not to go forward,” he said, referring to prosecutors. The case is Waymo LLC v. Uber Technologies Inc., 17-cv-00939, United States District Court, Northern District of California (San Francisco).

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