Where The Rubber Hits The Road: Will Waymo Sue Google If Uber Employees Have Stolen Technology?

  • By Susan Burns
  • 28 Feb, 2017

The driverless car industry is hot and super-competitive. That’s a given. Here’s what’s not hot if you are Waymo, the self-driving car business that was spun out of Google’s parent company:

Waymo filed a lawsuit claiming that Uber is using its intellectual property that was stolen by one of Google’s former employees, who now happens to be working for Uber.

Waymo claims that while Anthony Levandowski was working for Google, he downloaded 14,000 files from Google shortly before he left to start his own self-driving car company, Otto.

Waymo also claims that a number of former Google employees became employed by Otto and had downloaded other  trade secrets before leaving. Those trade secrets included supplier lists, manufacturing details and technical information, according to Waymo.

Uber acquired Otto for more than half a billion dollars several months after Mr. Levandowski (and the others) left Google. Reading between the lines, we can guess that Uber acquired Otto for its driverless car technology.

Waymo was alerted to the possibility that Uber had its technology because one of Waymo’s suppliers inadvertently copied Waymo on an email. The email included drawings of Uber’s circuit board design for laser-based sensor technology for driverless cars. Waymo took note because the “ design bore ‘a striking resemblance’  to its proprietary and highly secret design.”

So, while Waymo seems to have some pretty convincing evidence that its proprietary information is in the hands of a competitor, it needs to prove more than that to win its claim that its trade secrets were stolen. 

Theft of information is one thing, but whether the information stolen is a trade secret is entirely different matter.

Last year, in a two-part series , I reviewed the Defend Trade Secrets Act (DTSA) [1] and its significance--specifically, the definition of a trade secret and how to protect trade secrets and business confidential information. At the expense of Google and Waymo, that two-part series has had a real-life teachable moment breathed into it.

Here is why Waymo must prove more than theft of information and why Google and Waymo may end up fighting each other:

A trade secret is information that is kept under lock and key not just because it is unique to that business, but because its secrecy provides a competitive edge. A trade secret consists of three key elements:

1. The information is not generally known to the public;

2. The information obtains its economic benefit because it is not generally known; and

3. The information is subject to reasonable measures to protect its secrecy.

To prove theft of its trade secrets, Waymo must prove all three elements. In this case, it appears that Waymo will have no difficulty proving the first two elements. Their driverless auto technology is not generally known to the public, or we would have all heard about THAT. And, I think it is reasonable to assume that the technology is valuable because it isn’t generally known. In other words, Waymo’s driverless car technology is valued because it gives Waymo a competitive advantage.

That leaves us with the third element that Waymo must prove, and that is that Google took reasonable efforts to maintain secrecy of its information (that was later transferred to Waymo). Let’s hope that Google had this lock and key part nailed down.

Why? Because even if Waymo proves that the technology was stolen by former Google employees before they left, it must also prove that the technology stolen was subject to reasonable efforts to maintain secrecy. It is not enough to prove that secret technology was stolen.

If the information was NOT subject to reasonable measures to protect its secrecy, then it is not a trade secret. Trade secret, by its definition, includes the requirement that the secret is guarded.

What does reasonable efforts to maintain secrecy mean? What is required? It can mean a number of things are required, for example, having employee agreements that include properly drafted non-disclosure clauses, restricting access to information to only employees with a need to know, classifying information as top-secret or confidential, compartmentalizing access to information, conducting exit interviews to remind departing employees of their continuing obligation of secrecy, monitoring competitors and monitoring key employee downloads of information. There may well be other measures that are standard (and therefore reasonable) in the industry for safeguarding technology.

If Waymo can’t prove that Google took reasonable efforts to maintain secrecy of the information, even if it was stolen, it isn’t a trade secret and they lose that claim. In that case their recourse would be against Google for NOT maintaining secrecy.

That’s where the rubber could meet the road … in a totally unexpected way.

 

If you are not sure that your business trade secrets are being properly protected, schedule a 20-minute power-house consultation , and let’s make sure that you #CoverYourAssets.

 

(Susan is a regular Contributor to Huffington Post, and this was also posted there.)



[1]  The DTSA was a rare piece of legislation that was largely agreed upon on both sides of the aisle and was signed into law by President Obama on May 11, 2017. Due to its bipartisan support it seems likely to stand, even under the current administration, but no guarantees.



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More Posts from Susan's Blog

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By Susan Burns 26 Oct, 2017
P.S. There has been a lot of discussion on social media about my post on reading fine print  when installing apps, specifically focused on the Grammarly app. Some people have responded with the interpretation that Grammarly can only use your content to correct your grammar and not for anything else.

I disagree. This is not a correct interpretation, in my opinion.

Even though that interpretation may be based on a provision in the TOS that states you keep ownership of
your content, they still have an unlimited, perpetual, royalty-free right to use it. I won’t repeat the prior
post, but do urge you to read it .

Others have suggested that Grammarly’s TOS are typical of SaaS (software as a service) agreements and,
somehow, that makes it okay. The TOS may be similar, but the products aren’t. Grammarly, in my
experience, crawls through everything you type. Everything.

The other argument proposed by someone is that because this is typical SaaS language, they don’t really
mean that they are going to use your content. Really? Then say so in a clearly-drafted, user-friendly
contract a/k/a TOS.

I have not heard of someone successfully arguing in court that even though they agreed to a license of
their product, they didn’t think the person was really going to use it … and therefore, they shouldn’t be
allowed to use it. If you know of such a case, send it my way.

Again, legal ethics prohibit me from using the service. That aside, I don’t choose to give Grammarly
access to everything I type.

As one person put it, “everything ever typed on the computer, so while it runs in the background, it
gathers password, credit card data, shopping habits, text conversations from Facebook, messenger
services, anything you do... recorded and stored.”

Finally, my posts are my opinion and my legal analysis. I am not your lawyer. And, I am not telling you
what to do.

One of my major focus points with clients is clarity. Fabulous decisions come from clarity. Make a
decision that’s right for you.

I love a great discussion! Keep the comments coming.

MSB
By Susan Burns 24 Oct, 2017

Recently I was engaged in a Facebook exchange among a group of successful business women. Someone asked for opinions on using Grammarly—an app that is marketed as “A FREE, ACCURATE GRAMMAR CHECKER BUILT FOR EVERYONE.”  

The comments started rolling in: “love it!” “best thing I have used in a long time.” “Cuts my writing time significantly.” And more like that.

I actually had installed the free app a few weeks before to give it a test run. I found it to be a nuisance because that little app was popping up and sticking its grammar-nose in every single thing I wrote. My emails. My blog posts. My word documents. That spelled danger to me, and I immediately deleted it.

My curiosity piqued, I checked the Terms of Service (which, admittedly, I should have done first). Here is what I found:

By uploading or entering any User Content, you give Grammarly (and those it works with) a nonexclusive, worldwide, royalty-free and fully-paid, transferable and sublicensable, perpetual, and irrevocable license to copy, store and use your User Content (and, if you are an Authorized User, your Enterprise Subscriber’s User Content) in connection with the provision of the Software and the Services and to improve the algorithms underlying the Software and the Services. (emphasis added)

Here's what you need to know:

  • Grammarly, Inc. is a Delaware corporation. They include in the definition of “Grammarly” not only the corporation, but also all of its subsidiaries AND other affiliates.
  • The definition of “Software” is “the software.
  • The definition of “Services” is … wait for it … “services.” 
  • And, although it is poorly drafted, it seems to be attempting to include any future Software and Services provided by Grammarly, which you recall also means any subsidiary or affiliate.

What does this mean for you?

It means that if you install Grammarly, whether it’s a free service or a paid service, you are specifically giving an unlimited perpetual license to your content to Grammarly and any company they affiliate with and any of their subsidiaries basically for any service they provide now and decide to use in the future.

That means that if you use Grammarly, instead of your own brain or a copy editor, you are no longer the exclusive owner of your content. That means they can republish, provide to third party affiliates, and use your data and materials any way they see fit.

The bottom line is that Grammarly has access to—and the unlimited, forever—right to use your content. Period.

And, once you install Grammarly, it is everywhere . It pops up in every document you create. Every. Single. One. If you don’t believe me, try it yourself.

Of course, lawyers and other professionals with a confidentiality responsibility to their clients are ethically prohibited from using Grammarly. (And, I hope they read the fine print.) But even if you don’t have an ethical responsibility to keep information confidential, do you really want to give up the right to your content?

Think about it! And next time, read the fine print. … or call me, and I’ll read it for you.


​*This post has been updated here .

By Susan Burns 28 Feb, 2017

The driverless car industry is hot and super-competitive. That’s a given. Here’s what’s not hot if you are Waymo, the self-driving car business that was spun out of Google’s parent company:

By Susan Burns 19 Feb, 2017

Recently, there was a trademark spat between Adidas and Tesla. The story piqued my interest because   the big players make mistakes that are instructive for small businesses (only on a grander scale)—and because it illustrates the importance of brand identity and underscores why it’s smart to register your mark.

In a nutshell, here’s what happened: Tesla filed with the US Patent and Trademark Office (USPTO) to register its Model 3, three-bar logo as a trademark. If the registration had been for the purpose of using the mark on a car, there would not have been a problem. BUT, Tesla registered to use its three-bar “E” on clothing. Adidas, a company known for rigorous policing of its brand identity, challenged Tesla’s right to register the mark as confusingly similar to the Adidas three-bar logo. Tesla withdrew its application. Adidas protected its three-bar brand identity.
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