Uber Learns Trade Secret Law the Hard Way in Settlement with Waymo over Self-Driving Car TechnologyFebruary 23, 2018

In the middle of trial with Google’s self-driving car company, Waymo, Uber settled the trade secret litigation brought by Google. Uber will turn over 0.34% of its equity, which has been estimated at $245 million dollars in value. The dispute resulted when Uber hired a former employee of Waymo, not knowing that the engineer had downloaded 14,000 copies of company documents before leaving. Uber did not require the employee to sign an agreement confirming he was not bringing confidential information with him, even though Uber had later required other employees to do so. An entrance interview with a new employee from a competitive company with a caution about not bringing the competitor trade secrets along would have also benefited Uber. Litigation showed that the employee had been courted by the now-fired CEO of Uber while he was still a Google employee. The employee left to start his own company, and within a year the company was purchased by Uber.

The settlement came even though it was to date not clear any stolen information was used by Uber in developing its laser technology for self-driving cars. As stated by the new Uber CEO, Dara Khosrowshahi, “As Uber’s statement indicates, no trade secrets ever came to Uber,” but continued that had the trial proceeded Uber was expected to prevail. He added “While I cannot erase the past, I can commit, on behalf of every Uber employee that we will learn from it.”

Learning from other’s mistakes is the best way to learn a hard lesson. These include using exit interviews with employees who leave having had access to trade secrets; conducting entrance interviews, especially with employees from competitors; getting signed employee agreements on trade secrets (keeping your own and keeping others’ out); and including in employee agreements so-called “whistleblower” exemption language to assure that it will fall under the new trade secret law. As per Catherine Aird, if you can’t be a good example, at least you can be a horrible warning. Patricia Sweeney is an Intellectual Property Attorney in the Biotechnology/Chemical Patent Practice Group at McKee, Voorhees & Sease, PLC. For additional information please visit www.ipmvs.com or contact Pat directly via email at patricia.sweeney@ipmvs.com.