The Importance of Protecting Trade Secrets

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The Levandowski-Uber-Google Saga is a cautionary tale for all

A once-celebrated pioneer in the world of autonomous vehicle technology is getting a new title: Inmate. His downfall? Stealing trade secrets. He was convicted of taking his former employer’s proprietary information with him when he started his own business.

On August 4, 2020, a U.S. federal judge sentenced Anthony Levandowski to 18 months in prison after being found guilty on one count of stealing trade secrets from Google. He is the former head of Uber Technologies self-driving car unit and had previously been a high-ranking Google engineer.

He was indicted in August 2019 by federal prosecutors on 33 counts of theft and attempted theft of trade secrets. The whole saga is plagued by years of legal wrangling, millions of dollars in lawsuits, and major disruptions in business progress.

It shows why protecting your trade secrets is crucial to your company’s existence, and a cautionary tale about protecting your interests if you bring on new employees who are coming from rival businesses. 

Timeline of the case

  • April 2007: Levandowski joins Google as an architect of Google Street View.
  • January 2016: Levandowski resigns from Google and starts Otto, a self-driving trucking startup. It’s alleged that he took thousands of Google’s files with him.
  • February 2017: Waymo, Google’s self-driving car unit, sues Uber and Otto, alleging that Levandowski downloaded and stole more than 14,000 confidential files about crucial elements in self-driving car systems. 
  • May 2017: Uber fires Levandowski for failure to comply with a court order to hand over documents. He declined to cooperate, citing his Fifth Amendment right not to incriminate himself.
  • August 2019: Federal prosecutors indict Levandowski. According to reports, there was no doubt that he took files, but was it a crime? James Pooley, an intellectual-property law attorney, said, “The government has to prove that what Levandowski took with him was a trade secret, that it was valuable, and it was stolen, and you have to prove all that without a reasonable doubt.”
  • December 2019: An arbitration panel rules that Levandowski and another partner had engaged in unfair competition and breached their contract with Google when they left the company to start Otto.
  • March 2020: Levandowski pleads guilty in the criminal hearing. He admits to stealing trade secrets.
  • March 2020: Levandowski is ordered to pay Google $179 million to end a contract dispute over his departure.
  • April 2020: Levandowski files a motion to compel Uber into arbitration in the hopes that his former employer will shoulder the cost of at least part of the judgment against him. It was an attempt to force Uber to stand by an indemnity agreement with him that Uber signed in 2016 when it acquired Otto. Under the agreement, Uber said it would indemnify—or compensate —Levandowski against claims brought by his former employer, Google.
  • August 2020: Levandowski is sentenced to prison. The judge notes that anything less than imprisonment would give “a green light to every future brilliant engineer to steal trade secrets.”

The bottom line

To safeguard your trade secrets, those working with you must understand they are legally bound by protections you put in place, including non-disclosure and non-compete agreements. Employment and independent contractor agreements should include clauses to protect trade secrets and to clarify ownership of intellectual property.

It’s also important to know what would be considered a “trade secret” in court and what you are getting into if you hire someone from a rival company. Let’s have a conversation to help get your protections in place as soon as possible.

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