On Tuesday Uber fired Anthony Levandowski, the engineer at the center of its legal battle with Waymo, Google's self-driving car company. Uber said Levandowski failed to cooperate with the company's internal investigation into allegations asserted in a lawsuit Waymo brought against Uber: mainly, that Levandowski, who previously worked at Google and spent years working on the company's robocar effort, stole reams of intellectual property before he quit in early 2016, and that when he joined Uber six months later, used the illicit know-how to advance his new employer's technology.
But dropping the embattled engineer, one of the preeminent players in the nascent self-driving car industry, doesn't mean Uber's in the clear. “This is not a positive development for Uber,” says John Marsh, an attorney with the law firm Bailey Cavalieri who specializes in trade secret litigation. “In a perfect world, they would have been able to persuade Levandowski to come clean and demonstrate that there’s nothing there”---that he didn’t take 14,000 documents full of IP, that Uber did proper due diligence while hiring a competitor's former employee, and that no Waymo intellectual property made its way into Uber’s self-driving tech, as Waymo’s bombshell lawsuit has alleged.
The severance caps off what must be an exceedingly uncomfortable few months for both Levandowski and Uber. It started in February when Waymo accused Uber of stealing its self-driving car technology. In quick order, Uber found itself in court and Levandowski was invoking his Fifth Amendment rights, refusing to answer most questions related to the dispute, a sign he and his team of laywers believed criminal charges were at play. (Levandowski is not a defendant in the Waymo suit, but retains his own counsel.) Uber then barred the engineer from working on projects related to lidar, a sophisticated technology that helps self-driving cars see---and the one Waymo says ended up in Uber's own autonomous vehicles. Judge William Alsup of the Northern District of California, who is overseeing the case, officially ordered Levandowski off those projects earlier this month. Alsup then made the very unusual move of referring the trade secrets case to the Department of Justice for a possible criminal investigation.
Ultimately, Uber firing Levandowski does not protect the company from the explosive charges of the lawsuit. “The litigation concerns activities that took place in the past, and whether or not Uber did anything improper or was part of anything improper in connection with Levandowski joining Uber,” says Phil Bezanson, a defense attorney__ __with the law firm Bracewell. During a May hearing, Uber lawyers did not not push back against Waymo assertions that Levandowski stole 14,000 documents off of Google’s server, asserting instead that no record of those documents had made it to Uber’s system. But even if Uber did not knowingly permit Levandowski to use swiped tech in its self-driving designs, legal experts say simply being negligent and sloppy enough to let those ideas seep into its work could be grounds for a loss in court.
Though Uber's decision to fire Levandowski will not shield it from Waymo's complaint, it is a sign of some high level lawyerly strategery.__ __Earlier this month, Judge Alsup demanded Uber produce a comprehensive record of its investigations into the Waymo matter by June 23, a gargantuan task that requires the legal team to dig up and organize every document and record related to Levandowski and the company’s own lidar projects. By firing the engineer before that report is due, Uber demonstrates to the court, 'Hey, man, we’re really trying here.'
"[The firing] is a matter of necessity," says Marsh. “In order to ensure that they’re in compliance, they need to demonstrate to the court that they’ve done everything in their power to persuade, cajole or compel Levandowski to cooperate.” Now, Uber has hit the nuclear option: termination.
There might be another dynamic at play here, and that’s a possible criminal investigation into Levandowski’s alleged trade theft. When Judge Alsup recommended this case to the Department of Justice, it was a rare move---and a signal that Waymo has compelling evidence that the engineer walked off with documents he shouldn’t have. If Levandowski had remained with the company, “the government could take a pretty dim view of that and say, ‘Uber, you didn’t push as hard as you possibly could to get him to share information with you,’” says Bezanson1. “Now Uber can say, ‘We tried everything we could and he didn’t cooperate, so we fired him.’”
It appears this case has reached its cover-your-butt phase. "Uber is in a very potentially dangerous situation," says Peter Toren, an intellectual property lawyer and former Department of Justice attorney. Uber and Levandowski are now no longer on the same side, he says: "They’ve made the decision now that getting rid of Levandowski to go outside the tent is worth the risk." As the federal probe looms, it's definitely a risk. "Now he’s in it for himself to do anything he possibly can to be [not] be the fall guy in the criminal investigation," says Toren.
While Uber lawyers play poker, Waymo's legal team still has a lot of work to do. At a hearing earlier this month, Alsup indicated the Google spinoff hadn't sufficiently connected the dots between what Levandowski allegedly stole and the technology that Uber now uses in its self-driving vehicles. "I’ve given you lots of discovery, and so far you don’t have any smoking gun,” he told Waymo lawyers. That trove of Uber documents due June 23 could clarify things---or not at all. Either way, this very messy self-driving tech case just got way messier.
1UPDATE: 12:55 EST 5/31/17: This story was updated to clarify attorney Phil Bezanson's name.