SAN FRANCISCO — The stakes are getting higher in a trade secrets case that pits two of Silicon Valley’s biggest companies against each other in a battle over the future of self-driving cars.
A judge asked federal prosecutors Thursday to investigate whether Uber Technologies and one of its executives colluded to steal key technology from Google's self-driving car project, now known as Waymo, before the executive joined Uber last year.
The possibility of an investigation adds to mounting issues facing Uber and its embattled chief executive, Travis Kalanick. The ride-hailing giant, which is valued by private investors at nearly $70 billion, is also facing a criminal probe by the Department of Justice over the company’s use of software that was designed to evade authorities in cities where Uber was not yet legal. That criminal investigation is ongoing, according to people familiar with the matter.
“It is very rare for a judge to refer a matter over to the U.S. attorney and signals the judge’s displeasure with Uber in the trade secrets civil lawsuit,” said Carl Tobias Williams, chair in law at the University of Richmond School of Law. It also compounds Uber’s other legal problems, he said in an interview Friday.
In referring the case to the U.S. attorney’s office, the court took “no position on whether prosecution is warranted, a decision entirely up to the United States Attorney,” U.S. District Judge William Alsup wrote.
In addition, Alsup denied Uber’s request to move the case to arbitration. That means the high-profile case is expected to go to public trial later this year. Waymo filed the lawsuit in February.
Judge Alsup also temporarily blocked a part of Uber’s self-driving program using technology that Waymo claims to be stolen, but it was unclear how much of the program would be suspended because documents of the partial injunction were sealed.
“It is unfortunate that Waymo will be permitted to avoid abiding by the arbitration promise it requires its employees to make," Uber said in a statement Friday. "We remain confident in our case and welcome the chance to talk about our independently developed technology in any forum."
The company did not comment on the referral for a federal criminal investigation.
Waymo commented on the decision to go to trial in an emailed statement Thursday: “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.”
Uber has long been celebrated in Silicon Valley for its hard-charging culture — and for its strategy of moving into cities before getting permission from authorities. Within the tech world, Uber’s success was emblematic of the promise of a new wave of “on-demand” start-ups that would use smartphone-based technology to transform entrenched businesses in the physical world.
Technology companies Uber and Waymo, along with Detroit automakers, are in a cutthroat race to develop self-driving technology, which they think could define the future of transportation in the United States.
Uber executive Anthony Levandowski allegedly downloaded 14,000 documents to his personal computer before quitting his job last January as an executive with Google. Waymo claims that Uber colluded with Levandowski to steal lidar technology, a laser that helps software gauge the proximity of objects. Levandowski recently stepped aside as the head of Uber's self-driving car program, though he remains with the company.
Google, which launched a self-driving program in 2009, now has a fleet of more than 100 test vehicles that have driven 3 million miles on city streets in Phoenix, Austin and Mountain View, Calif. (The testing rules require that autonomous vehicles have humans in the car). Uber began testing autonomous technology seven years later. The ride-hailing company put its first vehicles on the streets of Pittsburgh through a partnership with the city and Carnegie Mellon University. Today it has cars in San Francisco, Pittsburgh and Tempe, Ariz.
For privately held Uber, self-driving vehicles have the potential to cut the expense of human drivers; lowering such costs is seen by some investors as a prerequisite for a public offering. Losing the race to develop the technology first would make Uber vulnerable to competitors and potentially decimate its business.
And the company’s culture has been called into question this year.
Uber has seen a string of high-profile executive departures following a controversy over sexual harassment and retaliation.
The earlier criminal probe focuses on software developed by Uber called Greyball. The program helped the company evade officials in cities where Uber was not yet approved. The software blocked rides to transportation regulators who were posing as Uber customers to prove that the company was operating illegally. The company said it was used to deny ride requests from fraudulent users.