Roadblocks keep surfacing for Uber, which Alphabet's (GOOGL) - Get Report Waymo is suing for allegedly structuring an autonomous car project around trade secrets stolen from Waymo. Several court documents were unsealed on Monday and the judge's order kicks Anthony Levandowski off of Uber's autonomous car projects.
But the judge's ruling also means that Uber can continue to work on its self-driving projects.
"We are pleased with the court's ruling that Uber can continue building and utilizing all of its self-driving technology, including our innovation around LiDAR," Uber said in a release. "We look forward to moving toward trial and continuing to demonstrate that our technology has been built independently from the ground up."
Waymo's suit alleges that former employee Levandowski stole 14,000 files full of self-driving trade secrets when he moved on to found his own self-driving car company, Otto, which Uber later acquired for $680 million.
"The bottom line is the evidence indicates that Uber hired Levandowski even though it knew or should have known that he possessed over 14,000 confidential Waymo files likely containing Waymo's intellectual property," the judge's order says.
Much of Uber's defense rests on its claim that it didn't receive the files. Still, they could nonetheless have ended up with trade secrets without receiving the actual files.
"Uber argues that it does not have any of the 14,000 documents that Levandowski allegedly stole," Knobbe Martens partner Brian Horne told TheStreet. Horne is an intellectual property litigator who is not involved in the case.
"But although this may support Uber's independent development argument, it would not necessarily exonerate Uber. If Uber used the trade secrets contained in those documents, it can still be held liable for trade secret misappropriation -- even if it never actually possessed the documents."
Levandowski, who now works for Uber, has sought to put forward a Fifth Amendment defense against being compelled to testify.
The case is held in the U.S. District Court in San Francisco, with Judge William Alsup presiding.
Levandowski is not named in the suit.
The order contains an injunction prohibiting Levandowski from working on Uber's Light Detection and Ranging (LiDAR) project, which is key to the successful development of a self-driving car.
The order orders Uber and Levandowski to return to Waymo the 14,000 files.
Alsup's order also addresses Levandowski's invocation of his Fifth Amendment right not to incriminate himself.
"Levandowski has broadly asserted his Fifth Amendment privilege. And troves of likely probative evidence have been concealed from Waymo under relentless assertions of privilege that shroud dealings between Levandowski and defendants in secrecy," the order says.
The judge also stated in essence that Uber should not take it easy on Levandowski at this point.
If Uber were to threaten Levandowski with termination for noncompliance, that threat would be backed up by only Uber's power as a private employer, and Levandowski would remain free to forfeit his private employment to preserve his Fifth Amendment privilege ... In short, in complying with this order, Uber has no excuse under the Fifth Amendment to pull any punches as to Levandowski.
What does this mean for Levandowski?
"The Court is distinguishing a 'private' right of action from 'government action,'" Raines Feldman LLP partner Phillip Maltin told TheStreet. Maltin's expertise includes business litigation and labor and employment law.
Maltin said Levandowski's attorneys argued that if Uber pressured him to return the files the company might violate his Fifth Amendment right against self-incrimination.
"The court called this argument 'baseless.' Why? Because Uber is not the government," according to Maltin.
"The Constitution, and rights against self-incrimination, do not protect employees working in private businesses. A private employer may positively insist an employee turn over information. It may even demand that an employee testify against himself. The employee, however, has an option: he may refuse, but with consequences. The business may penalize the worker by firing him. Testify, or lose the job."
Sections of the order last week denied Uber's request for arbitration, and Judge Alsop referred the case's evidence to the Attorney General, which could lead to anything from no action to a criminal prosecution.
The judge's order referring the evidence did not take a position on whether a criminal prosecution should take place, but the development does not bode well for Uber.
"It is a big deal in that this is not common practice, and it could suggest that Judge Alsup believes that Waymo has a strong case," Knobbe Martens' Horne said.
"The U.S. Attorney's Office, however, does not have to open an investigation or file charges. But if it does, violators can face fines and up to 10 years in prison. From a criminal standpoint, it is a worse sign for Levandowski than Uber, as he is most likely to face criminal prosecution."
The judge's order also called into question some of Waymo's arguments.
The court holds that Waymo's attempts to maximize its trade secret claims are too broad and general.
"But it would be wrong to allow any company to leverage a single solution into a monopoly over broad swaths of other solutions -- for example, merely because they all fall on the side of generally favoring a particular consideration over others," Judge Alsup wrote.
"To do so would be to allow monopolization of broad scientific or engineering concepts and principles. Waymo's gamesmanship on this score undermines its credibility on this motion."