Judge Asks Federal Prosecutors to Investigate Uber's Driverless Car Program -- Update

A judge asked federal prosecutors to investigate Uber Technologies Inc. and one of its engineers for potential theft of trade secrets from Google, heightening the stakes of a legal battle between Uber and Google parent Alphabet Inc. over driverless-car technology.

U.S. District Judge William Alsup in San Francisco also temporarily blocked a limited part of Uber's driverless-car program, which Google alleges benefited from the stolen trade secrets. Also Thursday, Judge Alsup determined that the lawsuit Google filed against Uber would head to trial instead of arbitration, dealing a blow to Uber's legal strategy.

The motion issuing the partial injunction was sealed. As a result, the scope and details of the injunction -- and how drastically it would curb Uber's program -- are unclear. Alphabet's driverless-car unit, which Google recently renamed Waymo, had asked the judge to block much of Uber's work on self-driving cars.

Waymo sued Uber in February, accusing the ride-hailing company of conspiring with Anthony Levandowski, a former Google engineer, to steal 14,000 Waymo files to jump-start Uber's driverless-car program.

Mr. Levandowski's attorneys didn't respond to a request for comment. He and his attorneys have repeatedly invoked his Fifth Amendment rights in the case, citing the possibility of criminal charges.

An Uber spokeswoman declined to comment on the partial injunction or referral to the U.S. attorney. On the denial of its arbitration request, she said, "It is unfortunate that Waymo will be permitted to avoid abiding by the arbitration promise it requires its employees to make. We remain confident in our case and welcome the chance to talk about our independently developed technology in any forum."

Waymo declined to comment on the judge's partial injunction. On the judge's arbitration ruling, the company said, "This was a desperate bid by Uber to avoid the court's jurisdiction. We welcome the court's decision today, and we look forward to holding Uber responsible in court for its misconduct."

A broad injunction against Uber was unlikely, said Courtland Reichman, head of the Silicon Valley office of McKool Smith, who has tracked the case. He predicted the judge at least in part barred Mr. Levandowski from working on Uber's driverless-car program.

Uber has already removed Mr. Levandowski, who joined Uber in August after selling his driverless technology startup to the ride-sharing company, from work on self-driving cars.

The possibility of criminal charges against Mr. Levandowski became more likely Thursday when Judge Alsup referred the case to the U.S. Attorney's Office for possible theft of trade secrets. "The Court takes no position on whether a prosecution is or is not warranted, a decision entirely up to the United States Attorney," the judge wrote.

Separately, the judge declined Uber's request to move the case to private arbitration. Uber had argued that Mr. Levandowski's employment contract with Alphabet required any disputes between the two parties be resolved in arbitration. The judge denied the request in part because Uber wasn't a party to that employment agreement, and Uber, not Mr. Levandowski, is a defendant in the lawsuit.

Mr. Reichman said Thursday's rulings were a clear victory for Waymo, even aside from the potential criminal investigation into Uber and Mr. Levandowski. The judge quashed Uber's bid to move the case out of the public eye in arbitration court, and it sided with Waymo that the evidence so far suggests some wrongdoing by Uber, Mr. Reichman said.

"The home-run ball would be to keep Uber out of the autonomous-vehicle program for an extended period of time but that's pretty extreme relief, " he said. "Regardless of the scope of [the injunction], Google has pushed Uber back and gotten them in a position to be very careful to not use its trade secrets."

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

(END) Dow Jones Newswires

May 12, 2017 00:32 ET (04:32 GMT)