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Alphabet doesn’t intend to settle its lawsuit against Uber just yet

The two companies are in court-mandated settlement talks.


Uber could settle its legal dispute with Alphabet, its frenemy turned foe that is suing the company for allegedly misappropriating self-driving trade secrets, now that the two companies are engaged in court-mandated settlement talks. Or at least that’s what the ride-hail company’s executives told investors during a call on Tuesday.

But as of today, Alphabet still expects to take this case — in which the company alleges former executive Anthony Levandowski downloaded 14,000 proprietary files and took them to Uber — straight to trial.

“We believe we have strong evidence to put in front of a jury about Uber’s misappropriation of Waymo’s trade secrets and look forward to trial,” an Alphabet spokesperson said in a statement.

Still, it’s not hard to see why Uber investors may have been heartened by the update.

Uber has grown more confident in its defense against Alphabet after the court delivered what it perceives to be small but needed victories. At the core of the ride-hail company’s argument is that none of the files Levandowski allegedly downloaded ever made it to Uber.

Last week, Alphabet dropped the majority of its patent claims against the embattled startup, though it’s not exactly going back on its assertion that Uber copied the design for a key self-driving technology called lidar. Instead, Alphabet agreed not to pursue these claims so long as the ride-hail company doesn’t revive the previously abandoned lidar designs that Alphabet claims infringe on those patents.

“Not only have they uncovered zero evidence of any of the 14,000 files in question coming to Uber, they now admit that Uber’s lidar design is actually very different than theirs,” a company spokesperson said last week.

Uber is also celebrating Alphabet’s narrowing from more than 100 to only 10 its list of trade secrets that it claims Uber has misappropriated. It’s worth noting that this was done because the court asked Alphabet to do so.

This seems to have been enough to alleviate some investor concern over this legal dispute that many see as a major threat to Uber’s business.

“Waymo investigators have crawled all over the company and found zero,” one longtime Uber investor told Recode. “As much as there are obviously bad facts around Anthony [Levandowski], it seems clear that he failed to taint Uber itself. The crux of the suit is that the trade secrets taken were used to accelerate Uber's own autonomous vehicle efforts. As those claims prove not to be true, the strength of the suit diminishes and drives toward settlement.”

But Alphabet isn’t folding just yet. That’s in part because the company said, contrary to what Uber claims, it has “direct evidence” that the ride-hail firm has not only acquired but has also used its trade secrets.

A July 10 filing reads:

Waymo will show that Defendants acquired Waymo’s protectable trade secrets through improper means, used those trade secrets, or disclosed those trade secrets. Waymo has direct evidence of use by Defendants, as well as evidence that Waymo’s trade secrets were acquired, used, or disclosed by agents of Defendants acting on Defendants’ behalf.

There’s also little chance Alphabet, an investor in Uber through Google Ventures, will choose to resolve its claims outside of court when there’s still — says Alphabet — key evidence that the ride-hail company has yet to produce. Without that evidence, which Alphabet has asked the court to compel Uber to produce through discovery, the company says it won’t know the full extent to which the embattled startup may have misappropriated their trade secrets.

That includes information about Uber’s alleged acquisition and use of non-lidar-related trade secrets, documents that show the number of times Anthony Levandowski accessed Uber’s network using his personal laptop where Alphabet files were allegedly stored, and all documents about Levandowski’s compensation at Uber.

In other words, Alphabet says it has little reason to settle right now. In fact, it’s unlikely Alphabet will find substantial reason to unless and until the company is satisfied with Uber’s response to its requests for information and/or the ride-hail company returns the files it allegedly has in its possession.

To be clear, Uber has disputed and continues to dispute Alphabet’s claim that the files that Levandowski downloaded to his personal computer ever made it to its servers. In fact, the $69 billion company argues the only thing it is guilty of is hiring Levandowski in the first place.

All that said, Uber is in the midst of its own discovery process — for which the company has been granted the ability to question Alphabet CEO Larry Page — and may soon find evidence that could convince Alphabet to settle.

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