Ex-Uber engineer indicted for stealing secrets from Waymo

Waymo self-driving cars now able to transport customers in California
Image: Waymo

On Tuesday, federal prosecutors charged ex-Uber executive Anthony Levandowski with 33 counts of stealing trade secrets from former employer Google. In 2018, the rideshare company paid the Alphabet subsidiary $245 million to settle a corporate espionage civil lawsuit that centered on the engineer.

During his arraignment, Levandowski pled not guilty. The court released the executive on $2 million bail. However, because the prosecution considers him to be a high flight risk, he must wear an ankle monitor as part of his pretrial release. Levandowski faces 10 years in prison if convicted.

At a press conference regarding the case, San Francisco U.S. attorney David Anderson said, “All of us have the right to change jobs. None of us has the right to fill our pockets on the way out the door. Theft is not innovation.”

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Levandowski’s attorney, Miles Ehrlich, issued a statement saying his client “didn’t steal anything from anyone.”

Why Prosecutors Filed Charges against Levandowski

In 2015, Levandowski worked as the head of Google’s autonomous car division, which later became Waymo. That year, the engineer began communicating with then Uber CEO Travis Kalanick. In January 2016, Levandowski exited Google and founded a self-driving company called Otto. Six months later, Uber acquired Otto for $680 million in an equity deal.

Subsequently, Kalanick made Levandowski the head of Uber’s autonomous vehicle division.

In February 2017, Waymo filed a lawsuit against Otto and Uber. The corporation alleged Levandowski downloaded 9.7 GB worth of confidential and proprietary files from the company before making his exit. Furthermore, the Alphabet subsidiary argued the engineer used its data to develop Uber’s Lidar system and circuit boards.

At the subsequent civil trial, Levandowski asserted his Fifth Amendment rights and didn’t answer any questions. Consequently, U.S. District Judge William Alsup alleged his belief it was “overwhelmingly clear” the engineer stole data from his old employer. But he ruled Waymo failed to prove he used its designs for Uber’s autonomous operation system.

Ultimately, Alsup ordered Levandowski to stop work on his company’s self-driving program. The Judge also referred the case to the U.S. attorney’s office for a possible trade secrets theft investigation. In May 2017, Uber fired Levandowski for refusing to cooperate with an internal investigation. A month later, Kalanick stepped down as the rideshare firm’s chief executive amidst a host of different scandals.

Uber paid Waymo $254 million in stock to settle its civil suit in February 2018. Earlier this year, the firm’s initial public offering paperwork included the disclosure Google won a $127 million arbitration award from its former self-driving division head. The filing also noted the corporation would be on the hook for the award because it made an indemnification deal with Levandowski when it purchased Otto.

What Happens Next

Following his dismissal from Uber, Levandowski founded a new autonomous vehicle company called Pronto. On Tuesday, the startup announced its chief safety officer Robbie Miller would be replacing Levandowski as CEO. The firm also noted the criminal charges its founder faces don’t involve the technology used to power its self-driving cars.

Prosecutors will likely call Travis Kalanick to testify in Levandowski’s trial. His testimony would be crucial in establishing the engineer’s motive for committing corporate espionage. Such a development would be very harmful to Uber’s public image. Since ousting its co-founder, the firm has worked hard to distance itself from his controversial tenure as CEO. Kalanick being publicly grilled by federal authorities would bring all those old associations.

Besides, if the U.S. attorney’s office finds the “smoking gun” Waymo could not, the results would be devastating for Uber. In April, Japanese automaker Denso, SoftBank, and Toyota invested $1 billion in the firm’s self-driving car unit. If it is proven the firm’s autonomous vehicle technology is even partially based on another company’s work, those corporations will require recompense. Plus, in addition to investor lawsuits, the company’s market share would fall off a figurative cliff.