Uber and Waymo have reached a $245 million settlement in their massive legal fight over self-driving car technology

Former
Uber CEO Travis Kalanick leaves the Philip Burton Federal
Building after testifying on day two of the trial between Waymo
and Uber Technologies on February 6, 2018 in San Francisco,
California.
Elijah Nouvelage/Getty
Images

• Uber and Google have settled a high-profile legal
  battle over self-driving car trade secrets. 
• As part of the settlement, Waymo will receive $245
  million of equity in Uber. 
• The settlement comes days before Alphabet CEO Larry
  Page was scheduled to testify in open court.

SAN FRANCISCO — Uber and Waymo have settled their high-stakes
legal battle over self-driving car technology — with Uber
agreeing to pay Waymo $245 million in equity.

On Friday morning, as the first week of testimony in the
explosive trial was drawing to a close, the two companies
announced a settlement over the allegations that Uber had
misappropriated trade secrets of Waymo, a self-driving car unit
owned by Google’s parent company Alphabet.

Uber will pay Waymo a package that includes 0.34% of Uber equity,
according to a person familiar with the settlement. That equals
about $245 million at Uber’s current private valuation of $72
billion.

Uber’s CEO Dara Khosrowshahi “expressed regret for the
actions” that led to the lawsuit in a
statement posted online. “We agree that Uber’s acquisition of
Otto could and should have been handled differently,” he
wrote.

Khosrowshahi also said Uber was committed to ensure that
self-driving car hardware it develops “represents just our good
work,” and does not include any intellectual property from
Waymo. 

The closely-watched trial started earlier this week, and
had already seen former Uber CEO Travis Kalanick testify.

At issue in the case was Uber’s 2016 purchase of Otto, a
company founded by Anthony Levandowski, a former senior Google
engineering manager and a world-class expert in self-driving
cars. Waymo alleged that he had taken gigabytes of files from
Google when he left the company, including schematics and designs
for self-driving car hardware, that Uber intended to use in its
own self-driving car program. 

The dispute has produced explosive headlines over the past year
about the accusations against Uber and has sparked debate about
the appropriateness of the “move fast and break things” Silicon
Valley ethos epitomized (though not coined) by the ride-hailing
firm.

One
of Waymo’s self-driving Chrysler Pacifica minivans navigates
autonomously around its testing facility at the decommissioned
Castle Air Force base in Merced County, California, on Monday,
October 30, 2017.
Waymo

The trial so far: ‘Greed is good’

The Hollywood-perfect storyline pitted two tech behemoths against
each other and the drama and revelations leading up to the trial
have created such a stir that William Alsup, the federal judge in
San Francisco overseeing the case, had to reiterate that this was
still, at its heart, a dispute over intellectual property.

“The central issues in this case remains whether or not Uber
misappropriated Uber’s trade secrets, not whether Uber is an evil
corporation,” he said in one pre-trial hearing. 

The trial itself veered from the serious to the surreal, with a
key moment coming when ousted CEO Kalanick took the stand to
testify. Journalists lined up for hours in advance to hear him
speak, and he was pressed on his confidential communications with
Levandowski, from cryptic messages telling the then-Google
employee to “burn the village” to a clip of the legendary “greed
is good” speech from 1987 film “Wall Street” — which was played
to the jury and the public in the surreal high-water-mark of the
trial.

The two sides each had 16 hours to present their case, starting
with the plaintiff, and the settlement comes as Waymo was drawing
towards the end of its argument. Its curtailment means the court
will no longer hear from several expected high-profile witnesses,
including Google cofounder Larry Page and Anthony Levandowski,
who was expected to invoke his Fifth Amendment right against
self-incrimination rather than testify.

Travis Kalanick and Anthony
Levandowski.
Associated
Press

Here are the announcements from Uber and Waymo: 

The full blog
post from Uber CEO Khosrowshahi:

“My job as Uber’s CEO is to set the course for the future of the
company: innovating and growing responsibly, as well as
acknowledging and correcting mistakes of the past. In doing so, I
want to express regret for the actions that have caused me to
write this letter.

To our friends at Alphabet: we are partners, you are an important
investor in Uber, and we share a deep belief in the power of
technology to change people’s lives for the better. Of course, we
are also competitors. And while we won’t agree on everything
going forward, we agree that Uber’s acquisition of Otto could and
should have been handled differently.

To our employees, in particular the great and talented people of
Uber’s Advanced Technologies Group: I am inspired by your passion
and commitment to bringing self-driving vehicles to life. Over
the last year, you’ve been distracted from your mission. For that
I am sorry.

There is no question that self-driving technology is crucial to
the future of transportation—a future in which Uber intends to
play an important role. Through that lens, the acquisition of
Otto made good business sense.

But the prospect that a couple of Waymo employees may have
inappropriately solicited others to join Otto, and that they may
have potentially left with Google files in their possession, in
retrospect, raised some hard questions.

To be clear, while we do not believe that any trade secrets made
their way from Waymo to Uber, nor do we believe that Uber has
used any of Waymo’s proprietary information in its self-driving
technology, we are taking steps with Waymo to ensure our Lidar
and software represents just our good work.

While I cannot erase the past, I can commit, on behalf of every
Uber employee, that we will learn from it, and it will inform our
actions going forward. I’ve told Alphabet that the incredible
people at Uber ATG are focused on ensuring that our development
represents the very best of Uber’s innovation and experience in
self-driving technology.

As we change the way we operate and put integrity at the core of
every decision we make, we look forward to the great race to
build the future. We believe that race should be fair—and one
whose ultimate winners are people, cities and our environment.

Dara”

Here’s Waymo on the settlement, provided by a spokesperson:

“We have reached an agreement with Uber that we believe will
protect Waymo’s intellectual property now and into the future. We
are committed to working with Uber to make sure that each company
develops its own technology. This includes an agreement to ensure
that any Waymo confidential information is not being incorporated
in Uber Advanced Technologies Group hardware and software. We
have always believed competition should be fueled by innovation
in the labs and on the roads and we look forward to bringing
fully self-driving cars to the world.”