Waymo Sues Uber for Theft of Self-Driving Tech

A San Francisco district court judge has asked ride sharing startup Uber to bar the head of its self-driving group, Anthony Levandowski, from working on  the company's Light Detection and Radiation Sensing (LiDAR) technology, which is used by driverless cars to detect surrounding objects. The judge's decision today follows another one last week, when he rejected Uber's request for the case to be tried in an arbitration court. Uber had earlier argued that individuals mentioned in Waymo's complaint are not referred to as "defendants" because of an employment agreement "that has a very broad arbitration provision." Last Thursday, the judge also referred the case to the United States Attorney Office for possible theft of trade secrets. This means that defendants in the case could face jail time, if they are found guilty. Still, today's ruling by Judge Alsup also marked a partial victory of sorts for Uber because the judge did not order a complete shutdown of the company's self-driving group.

The judge's rulings are the latest twist in a case with serious implications for leadership in the self-driving car industry.

In February, Waymo accused Uber of theft related to self-driving car technology. The company contends that Levandowski stole critical information from Google's self-driving unit during his time there. He used that information to start his own self-driving truck company called Otto, which was later acquired by Uber. 

Levandowski is reported to have already excused himself from working on LiDAR in Uber's self-driving group. In an earlier email to employees, he stated that he will be "recused from all LiDAR-related work and and management at Uber, through the remainder of the Waymo litigation. The technology is critical to self-driving car operations and is one of the vehicle's most expensive components. It is vital to cut down on Uber's driver-related costs in the future and realize its vision of a self-driving transit system. (See also: Senior Executive in Uber's Self-Driving Unit Quits)

In February, Waymo filed a federal lawsuit against Uber's self-driving car unit. In its complaint, Waymo alleged that Levandowski, who was part of Google's self-driving unit earlier, downloaded more than 14,000 documents relating to self-driving technology with "special software." Specifically, Levandowski obtained vital information relating to manufacture of custom Light Detection and Ranging (LiDAR) sensors, which help automobiles detect objects in the surrounding area. Other documents allegedly stolen include supplier lists, manufacturing details and "highly technical information." Subsequently, he formatted the laptop and didn't bring it to work again. (See also: Google's Self-Driving Car Division Sues Uber.)

The 37-year-old engineer came to Uber via Otto, a self-driving truck company that he founded in May 2016 and that was acquired by Uber in June of the same year for $680 million. Uber has said that the lawsuit is a "baseless attempt (by Waymo) to slow down a competitor." (See also: Why Uber Bought Self-Driving Truck Startup Otto.)

At stake in the case is leadership in the autonomous vehicle industry, which is expected to be worth $42 billion by 2025. While established car manufacturers, such as Ford Motor Company (F) and General Motors Company (GM), are working on self-driving vehicles, Silicon Valley companies are ahead of the curve as far as the technology behind autonomous cars is concerned. 

Waymo pioneered the industry by developing self-driving car technology back in 2009. Based on latest data, the company has already logged 5 million miles testing self-driving cars on roads. In comparison, Uber is a late entrant, having disclosed its plans for a fleet of self-driving vehicles only in 2014. However, the company has inked partnerships with research facilities and made acquisitions to catch up with Waymo. (See also: Uber's Self-Driving Cars Need Intervention Every 0.8 Miles.)

Uber's hiring of Levandowski arguably accelerated its efforts in self-driving vehicles. This is because Levandowski brought with him knowledge of proprietary technology relating to Lidar sensors, according to the Waymo filing. The sensors provide millions of data points to an automobile's software for navigation purposes. However, those data points come at a significant cost – according to some estimates, the big Lidar sensors (which are the flashing lights placed on top of cars) cost as much as $85,000 per piece. Each self-driving car requires approximately five Lidar sensors (a single large sensor on top of the car and four smaller sensors that each cost $8,000 on the sides). That expense inflates average prices for self-driving automobiles and deters their adoption in mass markets. (See also: Self-Driving Cars: Shifting Gears in Key Sectors.)

Those price points are especially problematic for Uber, which has aspirations to cut down its reliance on human drivers by relying on a self-driving fleet. A shortage of Lidar sensors in the market has further exacerbated the situation and has resulted in wait times of approximately six months for the technology.  

Earlier this year, Waymo CEO John Krafcik said the company's research had reduced the cost of Lidar sensors by 90%. The suit alleges Levandowski took details of this innovation with him to Uber. "Waymo developed its patented inventions and trade secrets at great expense, and through years of painstaking research, experimentation, and trial and error," wrote the Mountain View, California-based company in its lawsuit. (See also: Waymo Cuts Self-Driving Sensor Costs by 90%.)