May was a tough month for all involved in the trade secrets infringement case brought by Waymo, Google's self-driving car division, and Uber, which is also developing self-driving technology. The problem is that Uber hired a former engineer from Waymo to run its self-driving car project, and that engineer may have pilfered Waymo's trade secrets.
Unfortunately, June looks poorly for Uber. As we discussed on this blog in May, the former Waymo engineer allegedly downloaded some 14,000 proprietary files from the company before he left. Then, Waymo's trade secrets appear to have "seeped into" Uber's project. Waymo sued for patent and trade secret infringement, unfair competition and other claims. Its patent claims have been dismissed.
Last week, a federal judge dismissed Waymo's unfair competition claims, as well. Unfortunately, it had based its unfair competition claim and its claim under the California Uniform Trade Secrets Act on the same allegations. A previous appellate court decision had held that the CUTSA preempts unfair competition claims.
That was the only good news for Uber, however. The judge had previously denied its motion to resolve the case in arbitration, but Uber reiterated its motion. The judge denied it again. It also sought to put the case on hold while it appealed certain issues, but the judge ordered the case to continue.
Uber fires allegedly pilfering engineer, may have lost access to his knowledge
In early May, the judge had ordered Uber to undertake an internal investigation into the alleged trade secret violations -- and to report back. The former Waymo engineer refused to cooperate, however, and Uber fired him.
The engineer, who had previously attempted to claim his Fifth Amendment privilege against self-incrimination, accused the judge of coercing Uber into firing him in violation of his constitutional rights. No one, he insisted, should be forced to choose between self-incrimination and job loss.
As the judge is a government actor, he claimed, the order constitutes a coercive government action meant to deprive him of his constitutional rights.
The judge disagreed. First, Uber claims it fired the man on its own initiative. Even if it had not, however, Uber is a private employer with the right to fire an employee for any lawful reason, including that employee's decision to take the Fifth against the company's interests. A court has the right to order a company to undertake any action it is authorized to do. Therefore, the engineer's coercion claim was denied.
However, the engineer may be the only person who fully knows whether he transferred Waymo's trade secrets to Uber. If so, by firing him Uber may have lost its only leverage to pry that knowledge free.