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Self-Driving Car Technology at Center of California Trade Secret Lawsuit

carSelf-driving cars have been a subject of great interest in Silicon Valley recently. The technology that would make autonomous vehicles viable on a wide scale is not here yet, but numerous companies are working to make it a reality. As with any new technology, competition can easily lead to conflict. In this case, a company affiliated with the tech company Google has filed suit against the ridesharing company Uber and others, alleging infringement of trade secrets and patent rights, as well as unfair business practices. Waymo LLC v. Uber Technologies, Inc. et al., No. 3:17-cv-00939, am. complaint (N.D. Cal., Mar. 10, 2017).

Unlike other forms of intellectual property, the value of a company’s trade secrets depends on their confidentiality. State and federal trade secret laws therefore focus on preventing or dissuading the misappropriation of trade secrets. A business must show that information meets several criteria in order to invoke trade secret protection. The information must have economic value based on the fact that it is not known to others and not easily discoverable by others who are in a position to benefit from it, and the business must have made reasonable efforts to safeguard the information’s secrecy. 18 U.S.C. § 1839(3), Cal. Civ. Code § 3426.1(d).

California law allows the owner of trade secrets to obtain injunctive relief preventing “actual or threatened misappropriation.” Cal. Civ. Code § 3426.2. If a court finds that an injunction would be “unreasonable,” it can order a person to pay “a reasonable royalty” for use of the information. Id. A court can award damages for “actual loss” or “unjust enrichment caused by misappropriation,” along with punitive damages in an amount up to twice the total amount of damages in cases of “willful and malicious misappropriation.” Id. at § 3426.3. Federal law contains similar provisions for damages and specifically allows courts to order “seizure of property necessary to prevent the propagation or dissemination of the trade secret that is the subject of the action.” 18 U.S.C. § 1836(b)(2).

The plaintiff in Waymo is a subsidiary of the company that owns Google. It states in its complaint that it developed technology called LiDAR, “a laser-based scanning and mapping technology that uses the reflection of laser beams off objects to create a real-time 3D image of the world.” Waymo, am. complaint at 2. This technology “enable[s] a vehicle to ‘see’ its surroundings.” Id.

A manager employed by the plaintiff reportedly left the company in early 2016 to form his own company. The defendant acquired this new company several months later for $680 million. Before resigning from the plaintiff, the manager allegedly “downloaded more than 14,000 highly confidential and proprietary files,…including [the] LiDAR circuit board designs.” Id. at 3. This manager had also allegedly “told colleagues that he had plans to set up a new, self-driving vehicle company.” Id.

The plaintiff claims that this individual’s “calculated theft” led directly to the new company’s acquisition by the defendant and “allowed [the defendant] to revive a stalled program, all at [the plaintiff’s] expense.” Id. at 2. The lawsuit alleges violations of federal and state trade secret laws, infringement of four patents, and unfair business practices in violation of state law.

For the past four decades, business lawyer James G. Schwartz has represented Bay Area businesses and business owners in a wide range of litigation and transactional matters. To schedule a free and confidential consultation to see how we can assist you, contact us today online or at (925) 463-1073.

More Blog Posts:

U.S. Copyright Office Issues New Regulations Regarding “Safe Harbor” Protections for Websites Under the DMCA, Pleasanton Business & Commercial Law Blog, April 27, 2017

Federal International Trade Agency Hears Patent Dispute Between Fitness Tracker Manufacturers, Pleasanton Business & Commercial Law Blog, March 23, 2017

Federal Circuit Rules on What Constitutes Use of a Trademark in Commerce, Pleasanton Business & Commercial Law Blog, February 15, 2017

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