Levandowski’s Fate May Turn on the Meaning of ‘Trade Secret’

On Tuesday, engineer and self-driving pioneer Anthony Levandowski entered a San Jose courtroom sans tie to plead “not guilty” to 33 charges of theft and attempted theft of trade secrets. Exactly 564 days earlier, his former employers Uber and Waymo reached a $245 million settlement in a lawsuit over the same alleged actions that have gotten Levandowski into trouble with the Department of Justice: downloading about 14,000 Waymo files, including circuit board schematics and details on the self-driving car company’s purpose-built lidar, to his personal laptop on his way out to door to start his own company. By the time Levandowski abruptly left what was then Google’s self-driving car project, in January 2016, the government contends that he was already deep in acquisition talks with Uber.

The Federal Bureau of Investigation and Justice Department seem bent on making an example of Levandowski, who received some $120 million in bonuses from Google’s autonomous vehicle project. “The Bay Area has the best and brightest engineers and designers, and they take big risks, and they invest a lot of money, and they disrupt the market over and over again,” Special Agent John Bennett said during a press conference Tuesday. “But Silicon Valley is not the Wild West.” Bennett called trade secrets “the crown jewels of companies,” the products of “years of research and development.”

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What exactly constitutes a trade secret, and how one might go about stealing one, will be key to the government’s case. These are not always simple questions to answer. DOJ lawyers will have to show that Levandowski meant to steal the files. They will need to prove that the information in the allegedly downloaded files wasn’t common knowledge, and that Waymo protected the information well enough to make it a “trade secret.” (If the key to your grandma’s best brownie recipe is just chocolate, or if you just leave the thing out on a park bench where anyone might see it, it might not be a trade secret.) And they’ll need to show that Levandowski meant to make money from the information, or that he meant to give it to someone that wanted to make money from it (presumably Uber).

In 2016, an administrative law judge for the US International Trade Commission dismissed claims by Jawbone that rival Fitbit had misappropriated 154 of its trade secrets, in part because she found that some of the trade secrets asserted by Jawbone weren’t legally protectable. Presaging the Levandowski incident, a federal grand jury later brought criminal charges against six Fitbit employees for trade secret theft. The case is ongoing.

In a statement on the steps of the federal courthouse in San Jose, Levandowski’s lawyer Miles Ehrlich indicated the once-star engineer’s legal team will argue that the 33 pieces of information named in the indictment weren’t trade secrets at all, and that Levandowski didn’t derive any economic benefit from them anyway.

“The downloads in question occurred at a time when Anthony was still working at Google, when he and his team were fully authorized to access the information in question,” Ehrlich said. “Not a single one of these supposedly secret files ever went to Uber or any other company or person.”

No surprise: These sound very similar to the arguments Uber lawyers made to fend off Waymo in the civil lawsuit. Ehrlich called the federal indictment a “rehash” of those charges.

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The government’s pursuit of Levandowski is a break from recent precedent, and one of the higher-profile criminal economic espionage cases concerning an American employer and an American employee in recent memory. In the last half-decade or so, the FBI has spent more time pursuing, and the DOJ has spent more time prosecuting, trade secrets cases involving foreigners, says Peter Toren, an intellectual property lawyer and former attorney with the Justice Department’s Computer Crime and Intellectual Property Section. (Levandowski is a dual citizen, and also holds a French passport.) According to the legal scholars Orly Lobel and Rochelle Cooper Dreyfuss, more than half the economic espionage indictments between 2013 and 2016 “had a China connection.” Lawyers at Perkins Coie found that the DOJ’s pursuit of criminal economic espionage charges jumped 20 percent under the Obama administration, with the trend continuing in Trump’s Justice Department.

The government’s decision to pursue this case, Toren says, may come down to two factors. One is that DOJ lawyers are always looking for high-profile slam dunks, and the Waymo-Uber civil case had already drummed up media interest, as well as thousands of pages of case filings. The other is a highly unusual choice made by the judge overseeing that 2018 lawsuit, to refer the case to the DOJ. “The government may have felt that the evidence was such that they had no choice but to indict,” Toren says.

Some critics believe that the government’s recent interest in pursuing trade secret cases, on American soil and beyond, might ultimately be bad news for tech. “There’s danger in creating the signals to employees that they’re always at risk if they move to a competitor,” says Lobel, who teaches intellectual property and labor law at the University of San Diego School of Law. “That’s harmful to employees’ rights to choose their own job and the best fit for them, and depressing mobility in markets is harmful for innovation.” Some legal scholars believe that California law preventing companies from enforcing non-compete clauses helped nurture a fledgling Silicon Valley, subtly encouraging workers to cross-pollinate ideas and strike out on their own.

Levandowski and his legal team return to court on September 4, when a San Jose federal judge will make a final determination about his bail. But the case may end up having implications well beyond Levandowski’s circle of self-driving engineers—and even well beyond Silicon Valley.

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