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February 22, 2018

Waymo v. Uber Trade Secret Lawsuit Settles, Provides Guidance on Discovery Strategy

The blockbuster trade secret action over the future of autonomous vehicle technology is finally over. Tech titans Waymo (Google) and Uber, which had battled for almost a year over Waymo’s allegations that Uber stole scores of its self-driving vehicle trade secrets, settled their dispute today.

According to the order of dismissal, the parties reached a “confidential settlement agreement” of Waymo’s claims. Unofficial reports indicate that as part of the settlement, Uber will provide Waymo with a $245 million stock investment in the company. While that may seem significant, it is .34% - pennies on the dollar – of Uber’s estimated value of $72 billion. Moreover, Uber apparently rejected a $500 million equity settlement that Waymo offered at the outset of trial earlier this week.

Why did Waymo receive such a low settlement figure, particularly when it was seeking close to $2 billion in damages? Commentators suggested Waymo had not presented compelling evidence of trade secret misappropriation. Waymo did spotlight Uber’s destruction of text messages and other information. The settlement suggests, however, Waymo’s concern that the jury may not have been convinced Uber was responsible for Waymo’s lack of evidence.

eDiscovery Lessons from Waymo v. Uber

Waymo v. Uber offers lessons on the role of discovery sanctions in connection with the resolution of a matter. Discovery sanctions are often viewed as a game-changer; a way to tip the scales of justice against a sanctioned party and drive a matter toward settlement. In some respects, Waymo appears to have staked the outcome of this case on such a strategy. While Waymo did obtain discovery sanctions against Uber, they were limited to permissive adverse inference instructions and other curative measures. Waymo was never able to obtain a mandatory adverse inference or other dispositive sanctions against Uber.

While discovery sanctions can sometimes affect the outcome of a case, Waymo v. Uber teaches that they do not guarantee triumph for a party prevailing at motion practice. Parties must still properly marshal their evidence through discovery if they are to obtain a favorable litigation outcome.

Philip Favro
Philip Favro
Philip Favro acts as a trusted advisor to organizations and law firms on issues surrounding discovery and information governance. Phil provides guidance on data preservation practices, litigation holds, data collection strategies, and ESI search methodologies. In addition, he offers direction to organizations on records retention policies and the need to manage dynamic sources of information found on smartphones, cloud applications, and social networks. Phil is available to serve as a special master on issues related to electronic discovery. Phil is a nationally recognized thought leader and legal scholar on issues relating to the discovery process. His articles have been published in leading industry publications and academic journals and he is frequently in demand as a speaker for eDiscovery education programs. Phil is a member of the Utah and California bars. He actively contributes to Working Group 1 of The Sedona Conference where he leads drafting teams and serves as the Steering Committee project manager. Prior to joining Driven, Phil practiced law in Northern California where he advised a variety of clients regarding business disputes and complex discovery issues. He also served as a Judge Pro Tempore for the Santa Clara County Superior Court based in Santa Clara, California.
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