How to Avoid an Employment Trade Secret Dispute Like the One That Cost Uber $245 Million

Uber recently settled a trade secret dispute with Waymo, the self-driving car unit owned by Google’s parent company, Alphabet. As part of the settlement, Uber agreed to provide Waymo with .34% of its stock (a deal worth about $245 million) and had to agree that it will not use any Waymo hardware or software-based intellectual property in developing its self-driving car technology.

The Dispute

The dispute centers on a former Google employee, Anthony Levandowski who misappropriated Waymo’s laser-sensor technology – an essential function of Google’s driverless car development. Levandowski was a key player in Google’s early development of lidar sensors (“light detection and ranging”). Lidar is similar to radar but uses light pulses to create a real time 3D map of the world around the vehicle. Lidar is fundamental to the development of a fully autonomous car.

The trouble started when Levandowski resigned from Google and founded a company called Otto in 2016. Otto began developing self-driving trucks, which caught the attention of Uber, the largest on-demand taxi service in the United States. Uber bought the startup shortly after its inception and put Levandowski in charge of research and development for self-driving cars. However, when Levandowski left Google, he took with him thousands of important technical documents, including the plans for the lidar sensor technology he helped develop.

Google and Waymo allege that Uber knew about this misconduct and still pursued the deal in an effort to steal Waymo’s lidar technology and be the first to commercialize the self-driving car. In all, Waymo claims that Uber and Levandowski misappropriated at least eight trade secrets related to light detection and the lidar sensors. Waymo sued Uber, and the two companies reached a settlement after four days of arguments and testimony in the United States District Court in San Francisco.

Your Trade Secrets

For most business owners, protecting your trade secrets is not only highly important, but also highly doable. The key is to know what your trade secrets are and formulate a plan to keep them secret. Here are key steps you can take to protect your confidential information:

• Identify Your Trade Secrets – Trade secrets can include business or technical information, formulas, methods, processes with commercial value, and customer lists and other details. Consider what information or processes your business uses that you would not want anyone else to have and identify them as trade secrets.

• Keep Trade Secrets Confidential – It might seem obvious, but it’s important to actually keep your secrets just that – secret. As soon as a trade secret becomes public knowledge, it is no longer protectable. Some things you can do include marking your trade secrets as “confidential” and keeping them out of the public eye. Keep trade secrets on paper stored in a locked file cabinet and grant limited access to trade secrets stored on a computer.

• Educate Staff About Protection – It is the company’s responsibility to identify confidential information and keep its employees informed. Having employees sign nondisclosure agreements is one way of ensuring they understand the importance of keeping those trade secrets confidential. Training on trade secret protection can also be highly valuable.

• Ensure That Exiting Employees Do Not Take Trade Secret Information With Them – When employees leave take steps to ensure that they do not take your trade secrets with them when they walk out the door.

• Protect Trade Secrets in Contractual Agreements – If your business agreements involve sharing your trade secret information, make sure that the party receiving this information also has a duty to keep the information secret.

Trade secrets are vital component of a company’s organization. Neglecting this important information may have costly and potentially disastrous effects on the life of a company. Contact Anthony Law if you need assistance protecting your trade secrets.

By Scott Brown and Kristin Hammond