Key Filing Made in Fight Between Alphabet, Uber -- WSJ

By Jack Nicas Features Dow Jones Newswires

Filing in Alphabet-Uber trade-secrets legal battle relates to ex-Google engineer

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This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (October 4, 2017).

Google parent Alphabet Inc. has produced a long-anticipated document in the high-stakes legal battle with Uber Technologies Inc. that showed the ride-hailing company knew a former Google engineer had confidential Google files before buying his self-driving-car startup.

The report, however, stopped short of establishing that Uber possessed or used those files to jump-start its own driverless-car program -- the allegation at the center of Alphabet's lawsuit.

The revelations came from a due-diligence report about Anthony Levandowski and other former Google engineers that Uber commissioned in March 2016 before buying their startup, Ottomotto LLC, known as Otto, months later. Alphabet's self-driving-car unit, Waymo, attached the report to a filing late Monday, having successfully forced Uber to hand over a copy after months of fighting to access it.

Waymo sued Uber in February for allegedly stealing its trade secrets, claiming the ride-hailing firm conspired with Mr. Levandowski to bring thousands of files to Uber. A judge ruled Tuesday to delay the trial until Dec. 4 because Waymo asked for more time to prepare.

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Waymo said the report shows Mr. Levandowski stole Google files, accessed them after leaving the company and tried to destroy the evidence. "Knowing all of this, Uber paid $680 million for Mr. Levandowski's company, protected him from legal action, and installed him as the head of their self-driving-vehicle program," Waymo said in a statement. "This report raises significant questions."

Uber said it commissioned the report to prevent Google intellectual property from coming to Uber, and it "helps explain why -- even after 60 hours of inspection of our facilities, source code, documents and computers -- no Google material has been found at Uber."

Attorneys for Mr. Levandowski didn't respond to a request for comment.

The report showed that Mr. Levandowski had Google files related to its self-driving-car project on his phone, laptop, cloud-storage drive and external disk drives, including computer code, design files, engineering documents, presentations, and 50,000 emails. Some of the files were accessed as recently as March 22, 2016, the day investigators hired by Uber interviewed him, and nearly two months after he left Google.

The report, prepared by risk-management firm Stroz Friedberg, also states that Mr. Levandowski and other early Otto employees appeared to conceal their activity ahead of interviews with Stroz investigators. Mr. Levandowski deleted his text messages and also texted an unidentified person instructing him or her to delete text messages every night, the report said. Investigators said in the report that, during one interview, they caught Mr. Levandowski trying to empty the trash bin on his computer. And another former Google employee searched the internet for instructions to secretly delete files from his computer before interviews with investigators, according to the report.

Still, the report doesn't show that Uber possessed or used the Google files. Waymo has suggested Mr. Levandowski's access to such files means he easily could have incorporated Google trade secrets into Uber technology. Waymo said in a filing Monday that many of the files found in Mr. Levandowski's devices relate directly to Waymo's trade secrets.

Despite the report's findings, Uber said neither its board nor its then chief executive, Travis Kalanick, received the report before acquiring Mr. Levandowski's startup. Uber attorneys did receive the report before the acquisition. Former Uber director Bill Gurley told Waymo attorneys in a deposition that he wouldn't have approved the purchase if he had seen the report -- and that Mr. Kalanick told directors the report "came back clean," a Waymo attorney said in court recently. Mr. Gurley is a partner at Benchmark Capital, which has sued Mr. Kalanick for allegedly defrauding directors by hiding unethical behavior.

Mr. Kalanick didn't respond to a request for comment.

Write to Jack Nicas at jack.nicas@wsj.com

(END) Dow Jones Newswires

October 04, 2017 02:47 ET (06:47 GMT)