It was February 2017 when Waymo, Google’s self-driving car unit, sued Uber in what would become the biggest trade secret case of the century. Waymo alleged that its former manager, Anthony Levandowski, had organized a competing company while still at Waymo, and before leaving had downloaded 14,000 confidential documents. As it turned out, Uber had known about this when it agreed to pay $680 million for Levandowski’s brand new startup; and we’ve already looked at how the hubris of that hasty transaction provides lessons for hiring in new markets driven by emerging technology.
My head was turned by the recent news of President Trump’s final-day pardon of Anthony Levandowski, the former head of Google’s self-driving car unit who was recruited into Uber with full knowledge that he had downloaded 14,000 confidential files on his way out, and who was later convicted of trade secret theft. I was struck by the White House statement of justification. It said that Levandowski – who hadn’t yet served a day of his 18-month sentence – “has paid a significant price for his actions.” I have no doubt that Levandowski has “paid a significant price” for his misdeeds, but it caused me to think about the price paid by others who were involved in this fiasco of a hiring, most specifically Uber. Salacious stories like this one serve as a reminder of all the things that can go wrong when we hire someone from the competition. Especially when we stop thinking about risk and see only upside. So, let’s talk about that risk and what you can do to keep yourself out of trouble – and never, ever need a presidential pardon.
This week in Other Barks & Bites: WIPO launches dispute resolution service for Chinese domain names; Morrison Foerster report shows that IP litigation costs are increasing as the number of IP matters being handled are decreasing; the Federal Circuit issues precedential decisions upholding claim construction findings at the ITC and overturning a district court jury verdict finding invalidity for being unsupported by record evidence; the Second Circuit clarifies when profits can be awarded in trademark cases; Uber IP transfer creates $6.1 billion tax break for the company; major football associations call for crackdown on Saudi piracy service; OPPO inks patent agreements with Intel and Ericsson; and Broadcom acquires Symantec’s enterprise security business.
This week in Other Barks & Bites, governments and intellectual property offices around the world celebrate World IP Day; the U.S. Trade Representative releases its most recent Notorious Markets List; TiVo subsidiary Rovi files another patent suit against licensing holdout Comcast; Amazon ramps up program for connecting sellers with lawyers for patent infringement issues; the USPTO seeks public comments on gathering data for SUCCESS Act study; music industry groups submit letter to Copyright Office regarding Mechanical Licensing Collective membership; and weak China data center sales sends Intel stock tumbling by 7.5 percent.
While many of us long for the days to come in which our sedans or SUVs can suddenly sprout wings, taking us far away from congestive traffic blocking up interstate highways, there have been some developments in recent years bringing us closer to the reality of drone taxis or personal unmanned aerial systems (UAS) as a replacement for cars. Such technologies were the focus of discussion at the recent House Aviation Subcommittee hearing on new aircraft technologies. Flying cars and their development is not limited to the United States as recent reports indicate that several Japanese companies are working on a project roadmap for flying car development that will be released by the end of this year. In late August, Uber announced that it was looking into the potential of developing test sites for flying cars in five countries outside of the U.S. With the future of flying vehicles for personal transportation coming into more focus, we wanted to explore filings at the U.S. Patent and Trademark Office to see the current state of flying car technologies, both in the patent grants being issued by the UPSTO as well as in the patent applications being filed at the agency.
The development of UAS vehicles for delivering packages or passengers could go a long way in alleviating issues of congestion occurring along the nation’s roadways. Aviation subcommittee ranking member Rep. Rick Larsen (D-WA) spoke to these possibilities, citing a recent industry scorecard which found that U.S. drivers spent 40 hours each year stuck in traffic during peak hours, leading to an economic loss of $300 billion in lost productivity. Larsen noted that there were currently more than 50 passenger drone concepts in development and was the first of a series of Representatives attending the hearing to note that such technologies would make the science fiction world of The Jetsons a distinct reality.
LOT Network markets itself as a non-profit consortium, which offers its members a legal mechanism affording them protection from patent assertion entities (PAEs) and immunizes its members against patent suits from non-operating entities for about 1.2 million worldwide patent assets currently owned by LOT members… The LOT Network conditional license only applies to patents that are in network at the time that a firm joins the consortium. If a business joins LOT after a LOT member sells a patent, previous LOT members are protected by the conditional license whereas the new member still faces the potential of an infringement suit down the road on that patent.
How can we provide trade secret protection in fast-growing industries where employees often leave to work for the competition? How does someone take his or her accumulated experience to a competitor without getting sued? And from another perspective, how do you hire someone with experience and skill, to make sure that’s all you’re getting? This article offers you a few suggestions.
Reports about Musk’s talks with Cortica comes one day after Goldman Sachs analyst David Tamberrino affirmed his sell rating for Tesla stock on his expectation that Tesla stock would drop by 30 percent over the next six months because of production issues… On the same day that Goldman Sachs reaffirmed its sell rating on Tesla stock, Musk posted a video to Instagram, which is emblematic of the CEO’s Alfred E. Neuman-esque style of response to any perceived corporate turbulence. The video shows Musk in a bar in Jerusalem pouring flaming absinthe. Musk’s Instagram declaration that “Everything’s better with fire …” smacks of the same “What, me worry?” attitude that has allowed him to navigate uncertainty in meeting production goals without eroding shareholder confidence.
There are many lessons to be drawn from the Waymo v. Uber litigation. This is perhaps the most important. Lawsuits are about history, while business is about the future… Most trade secret litigation is fueled by emotional reactions to perceived wrongs. Plaintiffs feel betrayed and abandoned, and defendants feel blamed and misunderstood. Each side wants to fight in order to validate its perspective. So the lawsuit begins with great energy. But over time, new facts emerge, and the parties begin to reconsider the cost/benefit analysis of continuing the struggle.
Although the amount of the settlement was far less than $2.7 billion in amount sought by Waymo, the settlement apparently did include a payment from Uber of 0.34% of Uber equity—or about $244.8 million in stock based on a $72 billion valuation of Uber… Both sides had a lot riding on the outcome of the trial. In addition to the billions in damages, Waymo was seeking an injunction to prevent Uber from using any technology that may have originated from Waymo, which would have been a huge set back for Uber’s program. Indeed, during his first day of being questioned, the former CEO of Uber, Travis Kalanick, agreed that developing autonomous vehicles amounts to an “existential question” for Uber, and that the market for driverless cars is likely to be “winner-take-all.”
Earlier today Alphabet subsidiary Waymo settled with Uber in the midst of a trade secret infringement trial. This lawsuit originated when Waymo brought suit against Uber in 2017, alleging that a former Waymo engineer Anthony Levandowski, who was hired by Uber to lead Uber’s self-driving car project, took with him thousands of confidential documents… The U.S. Department of Justice is conducting a separate, criminal investigation into the alleged theft of trade secrets. Levandowski has claimed a Fifth Amendment privilege and has not spoken about the events leading to this dispute.
These IP deals were not necessarily selected for their size, but for their indicative nature of a set of circumstances that exist in current markets that made these deals not only possible, but essential… The three trends highlighted by these patent deals: acquisitions by foreign buyers, Unicorns and other well-funded startups looking for assets, and various strategies to avoid the burden imposed by the PTAB, are likely to continue well into 2018. None of these deals would have been entered into if the parties involved did not deem U.S. patents valuable and critical for their relative business, and that is one positive message that all of us involved in the IP marketplace can take with us into the new year.
Every trade secret case is built around a story. Sure, the plaintiff’s story is different than the defendant’s, even though each draws on the same facts. For the rest of us that don’t have a dog in the fight, helpful lessons are available. But sometimes you have to look hard to find them. Here’s one. When Waymo, the Google self-driving car company, filed its lawsuit against Uber earlier this year, the story was remarkable enough… This case is instructive for any business considering hiring an executive from a competitor: be aware that the cost of this recruitment might include the legal fees, disruption and liability risk of a trade secret claim.
Waymo, a Google spin-off, sued Uber and Ottomotto for patent infringement and violations of federal and state trade secret laws. Waymo alleged that its former employee, Mr. Levandowski, improperly downloaded documents on Waymo’s driverless vehicle technology prior to leaving the company and founding Ottomotto, which was subsequently acquired by Uber… During discovery, the Magistrate Judge granted Waymo’s Motion to Compel production of the Stroz Report. Waymo subpoenaed Stroz to produce the report and accompanying communications, documents, and devices. After a Motion to Quash was denied, Levandowski, Ottomotto, and Uber filed Motions for Relief from the Magistrate’s orders. The District Court denied the Motions. Acting alone, Mr. Levandowski appealed the district court’s denial of relief. Because the orders were not appealable final judgments, Mr. Levandowski presented his appeal as a writ of mandamus. The Court denied the writ, dismissed the appeal on jurisdictional grounds, and ordered production of the Report.