Uber is swimming in troubled waters, as it could face federal charges for allegedly stealing Google's Waymo secrets.
Judge William Alsup, presiding over Waymo's case against Uber, just denied Uber's motion for private arbitration to avoid trial. Moreover, the judge recommended that federal prosecutors handle the matter to determine whether Uber stole Waymo's technology.
Should the U.S. Attorney accept the case and find Uber guilty of theft, Uber could be looking at criminal prosecution.
Waymo vs. Uber
It all started when Anthony Levandowski left Waymo to lead Uber's self-driving car unit, and Waymo accused him of stealing secrets on his way out. Waymo alleges that Levandowski joined Uber with valuable information he obtained illegally, so it took matters to court.
Levandowski tried invoking his Fifth Amendment rights, arguing that submitting the allegedly stolen documents would incriminate him, but the court denied his petition. As the lawsuit intensified, Levandowski stepped down from his position running Uber's self-driving car division, but the legal dispute is not over yet.
Uber pushed for arbitration arguing that a clause in Levandowski's contract stipulated that any disputes between him and Waymo should be settled out of court, in arbitration.
Uber's Motion For Private Arbitration Denied
The judge's decision to deny the motion for private arbitration marks another major setback for Uber. The case will go to trial and the evidence will be mostly public, which Uber desperately tried to avoid.
"This order holds that defendants have not shown the elements necessary to justify application of equitable estoppel," Alsup ruled [PDF].
The judge highlighted that in this case, Waymo was not bound by arbitration. According to Alsup, Uber's claims that Waymo used all sorts of tricks to avoid arbitration by not listing Levandowski as a defendant were groundless.
Waymo did seek arbitration against Levandowski and ex-Googler Lior Ron, accusing them of using secret salary information for poaching employees to Otto, their self-driving truck startup that Uber acquired back in 2016.
Uber Could Face Criminal Prosecution
Alsup also issued a separate order [PDF] referring Waymo's case against Uber to the U.S. Attorney, based on the evidence submitted so far. The judge added that it's not the Court's decision to determine whether prosecution is warranted or not, it's entirely up to the U.S. Attorney.
Other orders justifying the referral remain sealed, so it remains unclear what prompted the judge to recommend the case for federal prosecution. In earlier hearings, however, the judge did acknowledge that Waymo had solid evidence that Levandowski stole thousands of files before leaving the company. Uber did not deny the allegations, and Levandowski's attempt to assert his Fifth Amendment rights added more fuel to the fire.
Lastly, Alsup has yet to decide whether to issue a preliminary injunction against Uber. Should he decide for the injunction, Uber's self-driving car developments could face severe limitations.
All in all, things are not looking too good for Uber as the company keeps facing setback after setback in its legal battle with Waymo. The case is set to go to trial in October.
