Technology First Look

As lawsuit heats up, Uber requests arbitration

Unlike other recent headaches, Google’s patent-infringement lawsuit targets Uber’s strategy to prosper in the age of self-driving cars.

In this Dec. 13, 2016, file photo, Anthony Levandowski, head of Uber's self-driving program, speaks about their driverless car in San Francisco. In sworn statements filed Friday, March 10, 2017, Waymo, a self-driving car company founded by Google, presented new evidence to support its allegations that former manager Levandowski stole technology that Uber bought to help build robot-powered vehicles for its ride-hailing service.
AP Photo/Eric Risberg, File
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In his time at Waymo, Google’s self-driving car project, engineer Anthony Levandowski downloaded more than 14,000 design files for “LiDAR” technology that self-driving cars use to map the road ahead, according to a lawsuit Google filed last month.

Mr. Levandowski says he simply put the files onto his laptop to work from home. But the lawsuit claims that its former employee had more sinister goals. Similar LiDAR designs soon turned up in Otto, a self-driving truck startup that Levandowski started after leaving Google, and that Uber acquired last summer for $700 million.

Now, Uber says it plans to request that the case be sent to binding arbitration, rather than trial, USA Today reports. Arbitration is typically "quicker, cheaper and more efficient, and it's confidential and private," Hirschfeld Kraemer partner Stephen Hirschfeld told the publication.

After several months of headaches, it’s not surprising that Uber would seek to avoid the spotlight. But unlike sexual harassment claims, video of Uber’s chief executive officer Travis Kalanick arguing with a driver, or even accusations that the firm sidestepped police, Google’s lawsuit targets Uber’s strategy to prosper in the age of self-driving cars.

“The autonomous vehicle has arrived,” a group of transportation consultants wrote in a study released earlier this week. “With automakers and technology firms announcing pilot programs almost daily, it is clear that this technology is quickly becoming a reality on our roads and highways.”

Uber faces unique pressure to lead the way in this shift. “If a competitor managed to get there first, it could easily replicate Uber’s core service (shuttling passengers) without its single largest cost (paying drivers),” as Bloomberg's Max Chafkin and Mark Bergen noted Thursday.

In addition to this stick, Uber also has a major carrot pulling it forward. The “Driverless Future” study predicts that the Los Angeles area alone “could experience a shift of 36% to 44% (1.8 million to 2.2 million) from personal vehicle commuting to [autonomous vehicle] ridesourcing only or a mix.” For the first company able to capture those commuters’ loyalty, the long-term rewards could be enormous.

Google has taken a harsher-than-usual stance to take back that transformative technology that Levandowski may have helped develop. According to Bloomberg's report, Google tells new hires that it will never sue a former employee for patent infringement; Eric Schmidt, the executive chairman of parent company Alphabet, considers them “bad for innovation.” But now, Mr. Schmidt’s firm may see itself at risk of getting left behind a major technological revolution.

Could the world of self-driving cars leave room for two tech giants? Intellectual-property expert Robert Gomulkiewicz thinks so. “What Waymo probably wants is to license its patents to Uber,” he told Bloomberg. “In this kind of litigation, that’s the typical sequence of events.”

There’s precedent for this kind of outcome. Numerous tech companies have fought over intellectual property for phones, for example, as The Wall Street Journal reported in 2015. But that has become less frequent, as some companies agree to license each other's patents.

For Uber’s arbitration request to succeed, both Google and the judge will have to agree. Among a range of procedural and legal issues, the tech giant will need to decide whether its and Uber’s self-driving cars could share lanes.

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