Richard Lloyd

The lawsuit filed yesterday by the self-driving business of Google parent Alphabet against Uber and its subsidiaries Ottomotto and Otto Trucking, looks set to catapult trade secret protection and patent infringement back onto the front pages.

With the numbers involved — last year Uber shelled out more than $600 million for the months-old Otto — the high profile of the technology in question, and the sheer level of alleged trade secret and IP appropriation espionage involved, this has all the makings of a story that will play out in the media for some time to come.

At the heart of the case is the accusation that a former executive of Waymo, Alphabet’s self-driving off-shoot, stole a vast trove of trade secrets and other IP relating to the rapidly developing technology. That executive left Waymo early last year and formed his own self-driving business, known as Otto, which was acquired by Uber in August.

Google has emerged as a leader in the self-driving sector since it announced that it was focusing on the technology in 2010. Uber, in contrast, has been rapidly looking to make up significant ground and, according to Waymo’s allegations, has resorted to IP theft to improve its position.

Here are some quick takeaways from yesterday’s filing.

Alphabet on the attack 

It is rare, very rare, for Google (or its still relatively new parent) to use IP to go on the attack. The first and really only high-profile patent infringement lawsuit  Google has pursued was against BT - and even that was after BT had transferred patents to a third party which had then used them to sue the search giant. Google quickly filed a counter suit against the British telco and the conflict ultimately fizzled out. So, for a Google business to be asserting now is a very big deal indeed.    

Given that a large part of Waymo’s case is focused on the theft of trade secrets, rather than patents, that might make a settlement less likely; or at least might mean that Waymo, if it can make some of its allegations stick, can extract a very high pay-off. Trade secret cases tend to be more emotional affairs with the kind of human dynamic that is often missing from patent suits. If this case gets to the courtroom floor, it could prove to be a riveting affair.

Policy priorities

One question now is whether this case will come to be seen as the start of a change of tack by Google, Waymo and the other businesses that fall under the Alphabet umbrella. As the Google family’s horizons expand, will it find itself resorting to IP law to protect itself against competitors more than it has up to now. If so, the value that patents have to the Alphabet clan may start to increase. That, in turn, could have wider policy implications in the US, given that up to now Google’s focus has bene on reducing patent power at the legislative level.

Convergence at work

That might still be a stretch or at least some years off — it’s just not in Google’s DNA to aggressively use its patent stockpile; but an interesting dynamic to follow here is the trend of convergence taking place in a broad swath of industries. This makes patent protection even more important and infringement suits potentially more likely.

Uber’s CEO has identified self-driving technology as vital to the company’s future. However it has lagged many of its rivals, including Waymo, and has therefore been on a tear recently to bring in talent and make acquisitions (such as the Ottomotto deal). Moving into related, but new sectors can mean that a company is badly exposed in IP terms if it has not had the time to develop its own portfolio and has not prioritised acquiring assets on the secondary market. When this becomes appatent, it should mean that senior company executives start to appreciate the importance of a robust IP strategy going hand in hand with a business’s overall objectives.

With Alphabet’s Waze ride-sharing business looking to grow in new cities in the US, in a direct challenge to Uber, this dispute may not be the first between the two companies.   

The IP links between the two

The way in which senior executives move around the top technology companies is a well-established feature of Silicon Valley, which has long been about a war for talent as much as it is a fight to come up with the next new thing.   

When it comes to the two sides in this case that also goes for their IP teams. In recent years Uber has made a habit of picking up talent from Google. That has included Eric Schulman who joined Uber in early 2015 (he ultimately left and moved into private practice at Fish & Richardson), Mike Meehan who joined the ride-sharing business early last year as head of IP and Kurt Brasch who joined Google after it acquired Motorola Mobility and signed up with Uber last September.   

This case also provides an early test for Amar Mehta, a Google IP veteran who jumped to Waymo last year to become its deputy general counsel for IP and commercial. If he ever sits down with his Uber counterparts as part of this case he should see familiar faces on the other side of the table.

An IP parvenu 

At the time, Uber’s hire of Brasch looked particularly interesting and now carries even more significance. The former Motorola and Google executive is an IP deals man, and so his move looked to have all the hallmarks of a pre-IPO tech business looking to bolster its level of patent protection. Despite its valuation stretching into the tens of billions of dollars, Uber is still a relative IP parvenu with a patent portfolio that numbers less than 100 assets, according to a quick search of Google Patents. The business has slowly started to acquire rights (for instance last year it picked up a package of nine grants from PARC), but it still pales in comparison to the thousands of patents that Waymo parent Alphabet has built up. That could mean that Uber’s options in filing a countersuit are limited; so as it continues to move into new areas, Brasch’s role will only become more important.

A bonanza for trade secret specialists

Thanks to a new federal trade secret law in the US, a relatively low-profile part of the IP universe has been enjoying some time in the sun of late. This case looks set to boost its profile even further and to ensure that if they weren’t already doing so, companies are now looking feverishly at their own trade secret policies. After all there’s nothing quite like the prospect of a multi-million dollar lawsuit and potentially months of press attention to focus the minds of corporate executives.

Additional reporting by Joff Wild