Federal Circuit rejects Uber’s arbitration bid in Waymo fight
The US Court of Appeals for the Federal Circuit has rejected Uber’s bid to move its trade secrets clash with Waymo into arbitration.
Yesterday, September 13, the Federal Circuit held that the dispute should be heard at the US District Court for the Northern District of California, San Francisco Division, rather than go into arbitration.
The high-profile battle began in February this year when Waymo, formerly Google’s self-driving car division, targeted Uber and its subsidiary Otto over alleged patent infringement and theft of trade secrets.
Waymo accused former manager Anthony Levandowski, who is not a defendant in the dispute, of downloading more than 14,000 highly confidential and proprietary files shortly before resigning.
The files included Waymo’s LiDAR (a laser-based scanning and mapping technology) circuit board designs.
Waymo also claimed that Uber had infringed its patents concerning the LiDAR technology.
In March, Waymo added a new patent claim to its infringement suit, and pushed for an injunction.
District Judge William Alsup, the judge overhearing the dispute, referred the suit to federal prosecutors in May, and Waymo dropped three patent claims.
Alsup also granted an injunction against Uber, ordering the company to return all of the materials downloaded by Waymo’s former executive.
Uber was ordered to keep the executive away from any role or responsibility related to LiDAR and to conduct an investigation into the downloaded documents.
Levandowski claimed in a filing that the judge’s order was unlawfully forcing Uber to fire him and, at the end of May, he was fired by Uber, after he failed to hand over documents at the centre of the dispute, according to a letter filed by Uber.
Alsup also denied Uber’s motion to compel arbitration of its pending litigation with Waymo in May, and so Uber appealed to the Federal Circuit.
Uber argued that Waymo should be compelled to arbitrate the dispute because of the arbitration agreement between Waymo and Levandowski.
Two employment agreements between Waymo and its former-employee Levandowski, entered into in 2009 and 2012, each contain an arbitration clause.
But the Federal Circuit affirmed the lower court, finding that arbitration should not be compelled.
“While equitable doctrines permit departure from this principle when necessary to avoid inequity, California precedent guides that unless the issues of the complaint are intimately intertwined with the non-party agreement containing an arbitration clause, compulsion to arbitrate is inappropriate”, said the court.
The Federal Circuit also upheld a ruling that Waymo can see a confidential report written by risk management firm Stroz Friedberg.
Stroz Friedberg had investigated Otto employees previously employed by Waymo, including Levandowski, and the resulting report has been at the centre of the discovery dispute in the clash.
Levandowski had appealed to the Federal Circuit, but the court found that the executive hadn’t established his entitlement to a writ of mandamus.
A spokesperson for Uber said: “We did not join Levandowski’s appeal to block disclosure of the report, and we are ready to finally disclose it to Waymo today.
“While Waymo has obtained over 238,000 pages of production documents from Uber and conducted a dozen inspections over 61 hours of our facilities, source code, documents, and engineers’ computers, there's still no evidence that any files have come to Uber, let alone that they're being used."
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