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Alphabet says the executive at the center of its lawsuit against Uber had a deal before he left the company

Alphabet’s attorneys claim that Anthony Levandowski received more than five million Uber shares that vested the day after he left Alphabet. Uber says that’s not true.

Two self-driving cars, one from Way and one from Uber Waymo, Uber

Alphabet claims Anthony Levandowski, who was a key executive in the company’s early self-driving efforts, stole 14,000 proprietary files before leaving to start a company called Otto that Uber later acquired.

Alphabet sought a preliminary injunction against Uber that would force the startup to halt any use of the allegedly stolen technology, a request that if granted could theoretically put a freeze on some of Uber’s self-driving efforts until the lawsuit is resolved.

To bolster its case, Alphabet sought to prove in court today that there was “clandestine planning all along that Uber and Levandowski had a deal” before he left the company. To do that, the attorneys for Alphabet presented the judge with a document that indicated Levandowski received more than five million shares from Uber that would vest just a day after he left the company on January 27, 2016.

At the time, those shares were worth more than $280 million, according to Waymo’s attorneys.

An Uber representative said that while the shares were effective earlier, they were not awarded to Levandowski until after the Otto acquisition in August in order to give him credit for “time served” at the acquired company.

Uber further clarified that Levandowski’s vesting is based on meeting technical milestones over time. In other words, Uber says, Levandowski has zero vested shares to date.

A slide from Waymo attorney’s presentation during the injunction hearing.

The judge also pointed out that Alphabet isn’t suing Levandowski, it’s suing Uber. His question: What if Uber didn’t know Levandowski stole those documents?

“The other possibility there is that Uber realized that Mr. Levandowski was radioactive ... and came up with some series of agreements that somehow would insulate Uber from any of that material ever being used at Uber,” Judge William Alsup said.

“All that has been proven is that he downloaded 14,000 documents,” he told Alphabet’s lawyers, referring to Levandowski. “So far, you don’t have any smoking guns.”

But Alphabet claims Uber knew about the files. It also thinks Uber may have even encouraged him to take them.

The company presented emails it recently obtained between former Uber executive Brian McClendon and other internal Uber employees that dated back to October 2015 and later emails that were sent on January 12 and 13, 2016 — just a few days after Levandowski allegedly downloaded the files and a few days before he left the company without notice.

In the series of emails, McClendon discusses a potential acquisition; meeting with Levandowski and technical lidar details were discussed in another email. One email had the subject line “deliverables.” Attorneys claim this implies Otto was created with the intention of being bought by Uber.

As we first reported, Levandowski had consulted for Uber’s self-driving division around the same time that he started Otto — which is about a month after he left Alphabet.

There’s also the issue of the due diligence report a third party put together for Uber about Otto that the company has refused to produce. Waymo believes this document could prove that not only did Levandowski steal the documents, Uber knew about it.

But Uber says it is not using any of Alphabet’s technology. The company claims it has not located any evidence that it ever received the downloaded files and should not face an injunction.

However, when asked by the judge whether he denies that Levandowski ever downloaded the documents, the attorney for Uber said he had no basis for disputing that.

In fact, Waymo claims that Uber is refusing to hand over documents on Uber’s acquisition of Otto, which Alphabet’s attorneys believe could further prove its claims.

“The first point is there’s more circumstantial evidence of bad intent here,” Waymo’s attorney said.

That said, Uber’s attorneys said Uber CEO Travis Kalanick would be willing to be deposed.

“No one is hiding at Uber,” he said.

That’s in spite of the fact that Levandowski — still an executive at Uber — has asserted his Fifth Amendment rights and has now recused himself from work on all lidar-related operations at Uber.

However, the company is still adamant that they did not use any of Waymo’s secrets.

The decision to grant an injunction, then, might come down to adverse inference. Alphabet has asked the judge to apply adverse inference or to assume that Levandowski is hiding something because he has asserted his Fifth Amendment rights, and that Uber is blocking discovery.

Uber argues that adverse inference would require corroborating evidence Waymo does not have in order to be applied. The ride-hail company contends that Alphabet is only asking for this to be applied because the company has provided no other evidence that Uber is in possession of or is using any stolen files.

Alphabet says that knowingly possessing and transferring trade secrets alone, even if Uber didn’t use them, would still qualify as a “threat” of misappropriation of trade secrets. This argument could bolster Alphabet’s overall case against Uber if the Google parent company can only prove Uber possessed Alphabet’s stolen technology but abandoned it.

“The point is they're going to learn using our technology how we did it so they can get the know-how for how to do it themselves,” said attorney Charles Verhoeven, representing Alphabet.

Uber argues that a threat of misappropriation requires that Alphabet shows that Uber has either used or disclosed that it intends to use those secrets.

Further, if Alphabet can’t prove Uber is using those misappropriated trade secrets, it could hurt their case for a preliminary injunction that would theoretically put the kibosh on some of Uber’s self-driving efforts during the duration of the lawsuit.

Uber argues that there’s no basis for an injunction, particularly since Levandowski has already been sidelined from any work on lidar at the company.

An injunction could mean a lot of things — including barring Levandowski from working on self-driving at Uber — but the judge still has to decide which trade secrets Alphabet included in a list submitted to the court actually qualify as trade secrets. Once the judge decides, Uber would have to stop operating technology that incorporate those secrets if the injunction is granted.

Uber says Alphabet’s descriptions of allegedly stolen trade secrets are largely based on common concepts in lidar — light detection and ranging technology — which is a key component to most self-driving systems.

Alphabet disputes this.

“If those ideas are enforced as trade secrets, [Alphabet self-driving subsidiary] Waymo could monopolize lidar,” Uber said in a filing last week. “Waymo would like that. But it would be unwarranted and anticompetitive.”

The rest of the hearing is resuming under seal today.

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