Sun, Feb 11, 2018 - Page 16 News List

Uber to settle theft lawsuit


Uber Technologies Inc is paying US$245 million to Google’s self-driving car spinoff to end a legal brawl that aired out allegations of a sinister scheme, which tore apart the once-friendly companies.

The surprise settlement announced on Friday came as lawyers for Uber and Waymo, a company hatched from Google, prepared to wrap up the first week of a trial that had attracted global attention.

Waymo filed its lawsuit nearly a year ago, adding to Uber’s woes with allegations of a bold high-tech heist orchestrated by its former chief executive, Travis Kalanick, and a former Google engineer.

That engineer, Anthony Levandowski, subsequently went to work for Uber and was later fired when he declined to answer questions about the theft charges, citing his constitutional right against self-incrimination.

Uber had on Monday offered to settle the case for US$490 million just before the start of the trial, but that agreement did not provide Waymo with enough assurances that its technology would not be improperly used, two people familiar with the thinking of both parties in the lawsuit said.

Not long after Thursday’s trial proceedings ended, the top lawyers from both companies, Uber’s Tony West and Waymo’s Kevin Vosen, met to hammer out an agreement.

The resulting compromise cut Uber’s payment in half, but provided Waymo with the guarantees that it wanted to prevent its technology from being used in Uber’s autonomous cars.

The payment, to be made in Uber’s stock, is a fraction of the nearly US$2 billion in damages that a Waymo expert had estimated Uber’s alleged theft had caused, but US District Judge William Alsup refused to allow Waymo to use that figure in the trial.

“This has the look of two companies trying to snatch victory from the jaws of defeat,” said Dan Handman, a Los Angeles lawyer who specializes in trade secrets for the firm Hirschfeld Kraemer. “You try to structure a settlement so both sides can spin it as a win-win situation.”

However, Uber’s settlement will not necessarily help Levandowski. The US Department of Justice opened a criminal probe at the prodding of Alsup, although it has not publicly identified the targets of that investigation.

For Waymo, the settlement protects the technology that has vaulted it into the early lead in the self-driving car market and provides a measure of personal vindication for Google cofounder Larry Page.

Alphabet had another reason to settle. It was an early investor in Uber and, although it sold some of its stock late last year, it still holds a significant stake in Uber.

The settlement gives Alphabet an additional 0.34 percent of Uber’s outstanding stock, based on an investment round that placed the company’s market value at US$72 billion.

The final value of the settlement could swing up or down, depending on how much Uber is worth when it goes public.

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