Published on December 1st, 2017 | by James Ayre0
Uber Attorney Admits That Board Members & Ex-CEO Knew Of Letter Stating That Employees Were Trained To Steal Trade Secrets & Cover Tracks
December 1st, 2017 by James Ayre
During a testimony on Wednesday, an Uber company attorney admitted that the company’s former CEO and a number of board members were well aware of a letter which seems to have been actively hidden by the company from investigators, but which recently came to light. The letter alleges that Uber employees were trained to steal trade secrets when possible, and to cover their tracks using communications programs with disappearing messages (Wickr; Telegram) and a separate, dedicated computer system.
As you’ll probably remember, Waymo (Google) is currently in the process of suing Uber for trade secrets theft — relating to LiDAR tech used in its self-driving vehicle program.
Notably, US District Judge William Alsup has requested that US prosecutors investigate the concealment of the letter, with the possibility of criminal charges now seeming somewhat likely.
Alsup stated in court rather bluntly while addressing Uber’s lawyers: “On the surface it looks like you covered this up. It seems like there are so many bad things that Uber has done in this case. Usually it’s more divided.”
Uber in-house attorney Angela Padilla testified that she didn’t disclose the existence of the letter to an outside law firm representing Uber in the case with Waymo or to other Uber attorneys.
She stated: “There was no effort to cover this up,” before going on to state that she took “full responsibility” for the decision to not share the letter. She then went on to claim that the letter had seemed to her “quite fantastical.”
Reuters provides more: “(Former Uber security analyst Richard) Jacobs testified in court this week that his lawyer sent a 37-page letter to Padilla describing a group within Uber called marketplace analytics aimed at acquiring trade secrets, code base, and competitive intelligence.
“Jacobs’ attorney also sent a letter with the allegations to the US Department of Justice. In his testimony, Jacobs described an intelligence operation inside Uber to research competitors and gather data about them, and use technology to avoid a paper trail.
“Alsup has agreed to Waymo’s request to delay a trial, which had been scheduled for next week, to give the Alphabet unit more time to investigate the allegations. The trial is now scheduled to begin in early February.”
In court, Padilla portrayed the situation as one whereby Jacobs was trying to extort money from the company with the letter. (If that was the case, then why did he send a letter to the US Department of Justice?)
“We felt that Jacobs was trying to extort the company,” she stated.
Uber responded in practice to the letter, though, by paying Jacobs $4.5 million (including a 1-year consulting contract) and by paying $3 million to his lawyer as well.
Judge Alsup noted: “That is a lot of money. And people don’t pay that kind of money for BS. And you certainly don’t hire them as consultants if you think everything they’ve got to contribute is BS.”
Padilla responded by claiming that the decision to pay Jacobs off, rather than dispute his claims, was made out of consideration for the possibility of a drawn-out and public legal battle with him, and also out of “concerns” for the employees named in the letter.
Part of the strategy also involved having an Uber manager, Mat Henley, testify that Jacobs had been fired for poor performance — presumably as a means to discredit what he has to say.
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