[BreachExchange] It’s not often Google goes on the IP attack, so its suit against Uber is a very big deal

Audrey McNeil audrey at riskbasedsecurity.com
Fri Feb 24 20:05:41 EST 2017


http://www.iam-media.com/blog/Detail.aspx?g=c94d2e3f-1438-
4f75-bb7f-e31b59e5adeb

The lawsuit filed yesterday by the self-driving business of Google parent
Alphabet against Uber and its subsidiaries Ottomotto and Otto Trucking,
looks set to catapult trade secret protection and patent infringement back
onto the front pages.

With the numbers involved — last year Uber shelled out more than $600
million for the months-old Otto — the high profile of the technology in
question, and the sheer level of alleged trade secret and IP appropriation
espionage involved, this has all the makings of a story that will play out
in the media for some time to come.

At the heart of the case is the accusation that a former executive of
Waymo, Alphabet’s self-driving off-shoot, stole a vast trove of trade
secrets and other IP relating to the rapidly developing technology. That
executive left Waymo early last year and formed his own self-driving
business, known as Otto, which was acquired by Uber in August.

Google has emerged as a leader in the self-driving sector since it
announced that it was focusing on the technology in 2010. Uber, in
contrast, has been rapidly looking to make up significant ground and,
according to Waymo’s allegations, has resorted to IP theft to improve its
position.

Here are some quick takeaways from yesterday’s filing.

Alphabet on the attack

It is rare, very rare, for Google (or its still relatively new parent) to
use IP to go on the attack. The first and really only high-profile patent
infringement lawsuit  Google has pursued was against BT - and even that was
after BT had transferred patents to a third party which had then used them
to sue the search giant. Google quickly filed a counter suit against the
British telco and the conflict ultimately fizzled out. So, for a Google
business to be asserting now is a very big deal indeed.

Given that a large part of Waymo’s case is focused on the theft of trade
secrets, rather than patents, that might make a settlement less likely; or
at least might mean that Waymo, if it can make some of its allegations
stick, can extract a very high pay-off. Trade secret cases tend to be more
emotional affairs with the kind of human dynamic that is often missing from
patent suits. If this case gets to the courtroom floor, it could prove to
be a riveting affair.

Policy priorities

One question now is whether this case will come to be seen as the start of
a change of tack by Google, Waymo and the other businesses that fall under
the Alphabet umbrella. As the Google family’s horizons expand, will it find
itself resorting to IP law to protect itself against competitors more than
it has up to now. If so, the value that patents have to the Alphabet clan
may start to increase. That, in turn, could have wider policy implications
in the US, given that up to now Google’s focus has bene on reducing patent
power at the legislative level.

Convergence at work

That might still be a stretch or at least some years off — it’s just not in
Google’s DNA to aggressively use its patent stockpile; but an interesting
dynamic to follow here is the trend of convergence taking place in a broad
swath of industries. This makes patent protection even more important and
infringement suits potentially more likely.

Uber’s CEO has identified self-driving technology as vital to the company’s
future. However it has lagged many of its rivals, including Waymo, and has
therefore been on a tear recently to bring in talent and make acquisitions
(such as the Ottomotto deal). Moving into related, but new sectors can mean
that a company is badly exposed in IP terms if it has not had the time to
develop its own portfolio and has not prioritised acquiring assets on the
secondary market. When this becomes appatent, it should mean that senior
company executives start to appreciate the importance of a robust IP
strategy going hand in hand with a business’s overall objectives.

With Alphabet’s Waze ride-sharing business looking to grow in new cities in
the US, in a direct challenge to Uber, this dispute may not be the first
between the two companies.

The IP links between the two

The way in which senior executives move around the top technology companies
is a well-established feature of Silicon Valley, which has long been about
a war for talent as much as it is a fight to come up with the next new
thing.

When it comes to the two sides in this case that also goes for their IP
teams. In recent years Uber has made a habit of picking up talent from
Google. That has included Eric Schulman who joined Uber in early 2015 (he
ultimately left and moved into private practice at Fish & Richardson), Mike
Meehan who joined the ride-sharing business early last year as head of IP
and Kurt Brasch who joined Google after it acquired Motorola Mobility and
signed up with Uber last September.

This case also provides an early test for Amar Mehta, a Google IP veteran
who jumped to Waymo last year to become its deputy general counsel for IP
and commercial. If he ever sits down with his Uber counterparts as part of
this case he should see familiar faces on the other side of the table.

An IP parvenu

At the time, Uber’s hire of Brasch looked particularly interesting and now
carries even more significance. The former Motorola and Google executive is
an IP deals man, and so his move looked to have all the hallmarks of a
pre-IPO tech business looking to bolster its level of patent protection.
Despite its valuation stretching into the tens of billions of dollars, Uber
is still a relative IP parvenu with a patent portfolio that numbers less
than 100 assets, according to a quick search of Google Patents. The
business has slowly started to acquire rights (for instance last year it
picked up a package of nine grants from PARC), but it still pales in
comparison to the thousands of patents that Waymo parent Alphabet has built
up. That could mean that Uber’s options in filing a countersuit are
limited; so as it continues to move into new areas, Brasch’s role will only
become more important.

A bonanza for trade secret specialists

Thanks to a new federal trade secret law in the US, a relatively
low-profile part of the IP universe has been enjoying some time in the sun
of late. This case looks set to boost its profile even further and to
ensure that if they weren’t already doing so, companies are now looking
feverishly at their own trade secret policies. After all there’s nothing
quite like the prospect of a multi-million dollar lawsuit and potentially
months of press attention to focus the minds of corporate executives.
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