Thwarting Uber’s second attempt to push its high-profile, high-stakes trade secrets battle with rival Waymo into private arbitration, a panel of federal appellate judges on Wednesday ruled the case instead will proceed toward its October trial date.
That means the legal battle, which will have a major impact on Uber’s self-driving car program and the burgeoning industry as a whole, will play out in public court — likely with all of Silicon Valley watching — instead of behind closed doors.
Get tech news in your inbox weekday mornings. Sign up for the free Good Morning Silicon Valley newsletter.
And in another win for Waymo, the appellate panel on Wednesday also ruled that Uber must turn over a key report in the case — one that Waymo’s lawyers have been trying to get their hands on for months in hopes that it will bolster their claim that Uber stole and used Waymo’s autonomous vehicle trade secrets.
Uber had argued the case should be resolved in arbitration because a key player — former head of Uber’s self-driving car program Anthony Levandowski — had signed an arbitration agreement when he worked at Waymo. But Waymo countered that because the lawsuit names Uber as a defendant, not Levandowski, it’s not subject to that arbitration agreement. U.S. District Judge William Alsup, who is presiding over the case in San Francisco, agreed, denying Uber’s motion to compel arbitration back in May.
Uber appealed the decision to the U.S. Court of Appeals for the Federal Circuit, which affirmed the lower court’s ruling Wednesday.
“Contract law principles hold that non-parties to a contract are generally not bound by the contract,” Circuit Judge Pauline Newman wrote, on behalf of a panel of three judges. “A contract to arbitrate is not an exception.”
Waymo, Google’s self-driving car spinoff, accused Uber of stealing its proprietary design for Lidar sensors used in self-driving cars. The lawsuit claims Levandowski, a former executive on Google’s autonomous vehicle program, downloaded 14,000 confidential company documents before leaving to found his own self-driving trucking startup — Otto. Uber then acquired Otto and brought on Levandowski to head its own self-driving car effort. Waymo claims Uber used the information Levandowski pilfered, allowing Uber to take a shortcut in developing its own technology.
Reading this on your phone? Stay up to date with our free mobile app. Get it from the Apple app store or the Google Play store.
Before the acquisition closed, lawyers for Otto and Uber hired risk management firm Stroz Friedberg to investigate Otto employees who previously worked for Waymo — and to look into whether Levandowski improperly kept Waymo’s confidential information. Waymo has been trying for months to get the report Stroz Friedberg wrote following that investigation, as well as hundreds of related documents, and Uber has been fighting just as hard to keep it under wraps.
After the lower court ruled Uber must produce the report, Levandowski appealed the decision to the Federal Circuit, arguing airing the report would violate his Fifth Amendment right against self-incrimination. (Alsup in May referred the case to the U.S. Attorney for criminal investigation).
But the Federal Circuit rejected Levandowski’s plea.
“Mr. Levandowski cannot prevent Uber and Stroz from producing the Stroz Report for consideration in this civil action solely because it ‘many incriminate him,’” Circuit Judge Evan Wallach wrote. “We conclude, from the District Court’s and Magistrate Judge’s denial of his request to prevent production of the Stroz Report, that they deem is relevant to this civil action; it is inappropriate to withhold relevant materials in the civil action.”
The panel also ruled Levandowski’s appeal is not appropriately timed. His plea does not qualify for immediate, emergency relief, the panel found, and instead Levandowski can seek relief by filing an appeal after the case concludes.
Waymo on Wednesday applauded the Federal Circuit’s opinion.
“Since filing this case, Waymo has found significant and direct evidence that Uber is using stolen Waymo trade secrets in its technology,” a Waymo spokeswoman wrote in an emailed statement. “We are still reviewing materials received late in the discovery process and we look forward to reviewing the Stroz Report and related materials.”
Waymo hopes the Stroz documents include at least some of the 14,000 files Levandowski is accused of stealing, or some sort of written admission that he stole the trade secrets. But while Uber on Wednesday was poised to give the Stroz documents to Waymo’s lawyers immediately, there’s no telling when — if ever — those documents will become public.
The case is set to go to trial Oct. 10, but it’s possible that date will be pushed back to give Waymo’s lawyers time to wade through the hundreds of Stroz documents.
Uber on Wednesday did not object to the Federal Circuit’s order.
“We did not join Mr. Levandowski’s appeal to block disclosure of the report, and we are ready to finally disclose it to Waymo today,” an Uber spokesman wrote in an emailed statement. “While Waymo has obtained over 238,000 pages of production documents from Uber and conducted a dozen inspections over 61 hours of our facilities, source code, documents, and engineers’ computers, there’s still no evidence that any files have come to Uber, let alone that they’re being used.”