Waymo v. Uber (Fed. Cir. 2017)
The Federal Circuit has released a pair of decisions (2017-2235; 2017-2130) in this patent / trade secret case. Waymo (Google) sued Uber (Ottomotto) for patent infringement and trade secret misappropriations. “Specifically, Waymo alleges that its former employee, Mr. [Anthony] Levandowski, improperly downloaded thousands of documents related to Waymo’s driverless vehicle technology and then left Waymo to found Ottomotto, which Uber subsequently acquired.”
Arbitration: In this lawsuit, Waymo sued Uber but not Levandowski himself. However, Levandowski intervened into the lawsuit to defend his personal interests. Uber then filed a motion to compel arbitration based upon the arbitration clause found in the employment agreement between Levandowski and Waymo. Although the agreement’s terms do not extend to Uber, Uber argues that the agreement should equitably apply since the complaint alleges that the misappropriation was conducted “by virtue of [Levandowski’s] job at Waymo.” In order to avoid an arbitration order, however, Waymo promised that it would not affirmatively rely upon “any employment or other agreement with Levandowski containing an arbitration clause” throughout the lawsuit (unless the documents are first raised by Uber). The District Court (Alsup) then rejected the motion to compel arbitration. Under the Federal Arbitration Act, denial of arbitration is immediately appealable.
On appeal here, the Federal Circuit affirmed — holding that as a matter of California Contract Law, the arbitration clause did not apply to Uber, and that equitable estoppel does not apply since Waymo has disclaimed any affirmative use of the employment contract in its case against Uber.
California law establishes that reliance on the contract bearing the arbitration clause is fundamental to compulsion by a non-party to arbitrate.
Here, Waymo has expressly stated that it is not relying upon the contracts containing the clause — thus successfully foreclosing the estoppel theory arbitration.
The second case involves a petition for Writ of Mandamus by Levandowski fighting-off a discovery order. The particular document at issue is a report created by the Stroz Friedberg firm in the lead-up to the Uber-Otto merger regarding prior Waymo employees. Importantly, the report was requested by Uber and Otto – not Lefandowski himself. The district court ordered discovery of the Stroz Report. In the appeal, the Federal Circuit rejected the petition — holding that Levandowski failed to show the urgent nature of the interlocutory appeal.
Mr. Levandowski contends that disclosure of the Stroz Report would be “particularly injurious or novel.” . . . His arguments are unpersuasive, for it is apparent that Mr. Levandowski cannot invoke attorney-client privilege or work-product protection.
Regarding injury, Mr. Levandowski fails to articulate any persuasive reasons why disclosure of the Stroz Report should be barred in this civil litigation, for the possibility of admissions against his interest is a valid function of civil discovery. While Mr. Levandowski claims that the District Court would be unable to “cleanse the trial of all taint from the improper disclosure,” such an unsupported assertion is insufficient. Moreover, we take note that the District Court, reviewing the Stroz Report in camera, declined to exclude it, and as explained above, the Supreme Court has indicated that appellate courts can remedy an improper disclosure of privileged information by vacating an adverse judgment and remanding for a new trial.
Slip opinion, internal citations removed. Thus, the outcome here is that the lawsuit will continue before the district court without interruption. The court is preparing for trial, with ongoing allegations of discovery abuse as well as a pending partial summary judgment motions. A recent order from the court is as follows:
By SEPTEMBER 15 AT NOON, counsel for plaintiff Waymo LLC shall file a declaration under oath responding to each and every accusation of discovery misconduct by Waymo [made by] defendants Uber Technologies, Inc., and Ottomotto LLC’s (collectively, “Uber”).
Respond fully to each and every allegation therein. Be complete and accurate. Counsel shall also state the extent, if any, to which it is true that Waymo “still has not produced a privilege log” (id. at 4).
Also by SEPTEMBER 15 AT NOON, counsel for Uber shall file a declaration under oath in support of the aforementioned accusations.
Further, a fascinating article by Mark Harris was published this week in IEEE’s Spectrum about the lawsuit titled: Could a Pair of Earrings Hurt Waymo’s Lidar Trade Secrets Lawsuit?