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Court: Uber knew, or should have, of co-opted Waymo trade secrets

When Uber hired a former engineer from Waymo, Google's self-driving car unit, did it know he was illegally sharing trade secrets with them? A federal judge has ruled they did -- or a reasonable company would have. He has ordered the confidential files to be returned to Waymo, although he didn't completely shut down Uber's own autonomous vehicle program. He did, however, refer the case to the Department of Justice for an investigation into possible trade secret theft.

A trade secret can be anything a company doesn't want its competitors to know. For example, a baker's prized recipes are typically trade secrets, as are customer lists, supply chains, and internal processes. Trade secrets often can't be patented or trademarked -- which would reveal them, anyway -- but they're still an extremely valuable part of many businesses.

With several companies actively in the process of researching and developing self-driving vehicles, confidential information abounds in the industry. It may be that the players aren't ready to file for a patent on the technology. Uber and Waymo were directly competing to create the first truly workable model. Then everything went wrong.

The engineer in question left Waymo in early 2016 to start his own autonomous truck startup. Uber bought that startup last August and hired him to run its autonomous car division.

Somehow, some of Waymo's trade secrets "seeped into" Uber's research and development. Waymo looked into the issue and discovered that the engineer had downloaded a large number of files just before he left the company -- which the judge said Waymo has demonstrated with "compelling evidence."

"The bottom line is the evidence indicates that Uber hired [the engineer] even though it knew or should have known that he possessed over 14,000 confidential Waymo files likely containing Waymo's intellectual property," the judge wrote.

At the same time, the judge ruled against Waymo on its patent claims, saying that "few" of them were actually traceable to Uber's self-driving car division. He also parsed the 121 trade secrets Waymo claimed, ruling that some of them don't qualify as trade secrets.

The judge ordered Uber to prevent any of its employees from using the confidential files and ordered them to be returned by May 31. He also ordered Uber to complete an investigation and report back in detail by June. He also denied Uber's request to arbitrate the dispute, which would be more private.

The engineer is not a party in the civil case but nonetheless has asserted his Fifth Amendment right against self-incrimination in order to avoid testifying.

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