November 27, 2017

Dan Handman Quoted in Law360 on Uber/Waymo Court Battle


Dan Handman is quoted in Law360 on the upcoming court battle between Uber and Waymo.
The text of the article, and a link to it, are below.

Breaking Down Waymo’s Trade Secrets Trial With Uber

By Daniel Siegal

Google‘s driverless car spinoff Waymo will face off in one week against Uber over its claims that the ride-hailing behemoth stole billion-dollar Waymo technology that could tilt the future of the nascent self-driving car industry when it acquired a former Waymo engineer’s startup.

Here, Law360 takes a look at the case in advance of the trial scheduled to begin on Dec. 4.

What’s at Stake

Plaintiff Waymo, the self-driving vehicle unit of Google parent Alphabet Inc., is seeking potential billions of dollars in damages — $1.86 billion to be exact, according to a since-excluded expert witness report — from Uber Technologies Inc.

The trial before U.S. District Judge William Alsup in San Francisco, which is expected to last until Dec. 22, is about more than just dollars, however, because it sees the two tech rivals jockeying for pole position in the as-of-yet untapped self-driving car market.

Hirschfeld Kraemer LLP partner Daniel H. Handman said that while the specific damages number sought by Waymo might be hard to peg down, there’s no doubt that anything that allows one of the parties to pull ahead in the self-driving vehicle industry carries serious value.

“You’re talking about trade secrets for an industry that does not exist, of course every one knows this is going to be a huge market, but it’s damages for a market that doesn’t exist yet, so how do you calculate it?” he said.

In addition to the financial stakes of the trial, Uber has had a variety of public relations problems of late, noted David Becker, partner at Freeborn & Peters LLP.

“If they’re found guilty of stealing trade secrets, it just adds to a continuing string of concerns about the company,” he said.

If Waymo were to lose the case, Becker said, it could also send a sign to other Google employees that they can get away from the tech behemoth with valuable ideas to profit from on their own.

“You have this company that has this huge amount of intellectual capital and a huge number of employees,” he said. “Are you basically nurturing the next person who’s going to take you down in a particular industry?”

Case History

The case has moved to trial quickly since it was filed by Waymo in February of this year. While getting to trial in less than a year on a case of this magnitude may seem hasty, Handman said that it’s a common, and common-sense, step taken by courts when dealing with technological trade secrets, where an industry advantage can be seized or lost in a moment.

“In another year the things we’re talking about here, the technology we’re talking about here could be completely obsolete,” he said. “That’s why they have to make to fast-track something like this.”

In the last several months, Judge Alsup has criticized both parties in the run up to trial, saying in October, when he agreed to delay the trial by two months to the current Dec. 4 date that he “cannot trust what they say.”

In October, a magistrate judge denied Waymo’s bid to compel Uber to hand over its self-driving vehicle source code, and later that month Judge Alsup denied the company’s bid to add two new trade secrets claims over Uber’s alleged use of its code into the trial, saying the complaint focused on laser hardware and that software claims would have to wait to be resolved later.

And in early November, Judge Alsup excluded Waymo’s damages expert Michael Wagner, who had pegged damages in the case at $1.86 billion, from testifying.

Waymo’s Position

Waymo alleges that its former star engineer, Anthony Levandowski, downloaded 14,000 confidential company files just before he left the company, after which he started his own autonomous car company, Ottomotto LLC, which was soon acquired by Uber for $680 million.

The key technology at issue in the suit is Waymo’s patented laser-sensor technology, known as LiDAR. Waymo contends that Levandowski used stolen trade secrets pertaining to LiDAR to create Ottomotto, and that Uber purchased Ottomotto, and the stolen secrets, in order to leapfrog off Waymo’s years of research and development.

Handman said that Waymo’s case will really be made based on what they can show Uber knew about Levandowski’s purported theft, and when they knew it.

“It’s trite formulation that you’ve heard before, but it’s true,” he said. “The ultimate goal is to attribute this to Uber, and not to Levandowski and that Uber knew about it an either by action or inaction was complicit in what he did.”

Uber’s Position

Uber has argued that its laser imaging technology, referred to as Fuji, is not equivalent to Waymo’s system, and there is no evidence that any files Levandowski took from Waymo were ever actually used by Uber, or ever made it onto Uber servers, and that extensive searches backed this up.

Becker noted that the evidence that has come out in the runup to trial, including a due diligence report prepared for Uber by risk management firm Stroz Friedberg LLC before Uber’s acquisition of Ottomotto that showed contact between Uber and Levandowski months before he left Waymo could appear suspicious to a jury, but doesn’t yet look like concrete trade secrets theft.

“They don’t have a smoking gun of a thing from Google’s info that’s actually in an Uber product now,” Becker said. “If you look at the evidence that has been reported, it really looks like very much smoke, but nobody knows how much fire.”

Uber fired Levandowski in May, and the engineer, who is not a defendant in the suit, has repeatedly invoked his Fifth Amendment rights to dodge discovery requests in the case.

Handman said that he expects Uber’s argument at trial will that they were deceived by Levandowski just as much as Waymo was — but that they never used anything he purportedly stole.

Waymo is represented by Charles Verhoeven, David Perlson, David Eiseman, Lindsay Cooper and Jordan Jaffe of Quinn Emanuel Urquhart & Sullivan LLP.

Uber is represented by Arturo Gonzalez and Esther Kim Chang of Morrison & Foerster LLP, Karen Dunn and Meredith Dearborn of Boies Schiller Flexner LLP, and Cory Buland and Matthew R. Berry of Susman Godfrey LLP.

The case is Waymo LLC v. Uber Technologies Inc. et al., case number 3:17-cv-00939, in the U.S. District Court for the Northern District of California.