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A Federal judge has ruled that Uber has to return files that were stolen from Alphabet Inc’s Waymo autonomous car division and that engineer Anthony Levandowski can play no further part in Uber’s LiDAR development program.

It could have been much worse for Uber, there was the slim possibility that the Judge could have shut down its entire autonomous division. In short, the ride hailing giant has dodged a bullet, although the case isn’t totally finished with.

Uber should have known…

Judge William Alsup concluded that Uber should have known, and probably did know, that Levandowski had taken files from Waymo and that the Google subsidiary’s technology had been incorporated into Uber’s own designs.

He referred the case to US Department of Justice and the inference is clear: Levandowski and Uber could face further charges for theft of trade secrets. Uber’s request for private arbitration was also denied, so the company cannot keep this messy case out of the public domain.

Levandowski left Waymo at the start of last year and was one of the co-founders of Otto, which developed a retrofit self-driving system for trucks that could take over the mundane work on the highway. Uber bought the startup in August for $680 million and Levandowski took over the autonomous division.

Levandowski took a lot of documents

Waymo alleged that he took more than 14,000 crucial documents about its LiDAR system with him and the judge agreed. So now Levanowski’s reputation has taken a serious hit and he has been barred from working on Uber’s LiDAR program.

“The bottom line is the evidence indicates that Uber hired Levandowski even though it knew or should have known that he possessed over 14,000 confidential Waymo files likely containing Waymo’s intellectual property,” Alsup said in his summary.

The Judge also ruled that Uber must provide a dossier of written and verbal communications between Levandowski and Uber officials, which could cause further issues. The engineer himself has taken the Fifth Amendment privilege and refused to take to the stand as he did not want to incriminate himself.

No real patent infringement

There is some good news for Uber. The Judge ruled that only a few of Waymo’s innovations had actually filtered through into Uber’s own designs and that Waymo’s claims that its patents had been infringed were simply without merit. Indeed, he suggested that a lot of Waymo’s 121 trade secrets included in the case simply don’t qualify as secrets.

This is a complex case and a lot of companies are working with similar technology, which muddied the waters on the technical front. Had the Judge concluded that Uber was guilty of large-scale infringement, he could have ordered Uber to shut down its autonomous division.

That would have been a serious problem for the ride-hailing company, which is clearly planning to eliminate owner-drivers from its balance sheet and replace them with autonomous cars in the near future.

“We are pleased with the court’s ruling that Uber can continue building and utilizing all of its self-driving technology, including our innovation around LiDAR,” Uber spokesperson Chelsea Kohler said.

It’s easy to assume that Uber will simply copy the documents before the deadline for their return on May 31st, give as little information as possible and sweep the whole affair under the rug.

Waymo has teamed up with Lyft

The Department of Justice investigation isn’t over, though, and Uber has already paid a heavy price. Waymo has now formed a partnership with Lyft, Uber’s biggest rival in the independent ride-hailing space.

The deal was announced over the weekend and the two tech giants will work on a number of autonomous pilot schemes. Uber has deals of its own, but this court case will do nothing for its reputation and major companies might not be so keen to work with the tech unicorn now they have seen how the firm treats confidential information.

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