Jury Selected For Waymo-Uber Trial

Five men and five women have been selected to sit in as jury on the proceedings at San Francisco's District Court for the Northern District of California between Alphabet’s (NASDAQ:GOOGL) self-driving unit Waymo and the world’s most successful ride hailing service Uber.

The case, which thus far has proceeded smoothly enough through testimony charging ex-Waymo employee Anthony Levandowski of stealing copious amounts of data (14,000 files to be exact) from Waymo that he transferred to himself before leaving the company to found self-driving trucking company Otto. Uber quickly acquired Otto thereafter.

Uber says that it didn’t benefit from Waymo’s technology and also that it fired the employee last year. Levandowski repeatedly refused to testify on the grounds of incriminating himself, something he is expected to do again before the jury. His refusal to answer will make it difficult for Waymo to bring in important facts related to the case. However, it is likely to influence the jury in Waymo’s favor.

Presiding Judge Alsup who has a lot of experience dealing in cases between technology companies, has said a few interesting things. He’s raised the question of “the employee mobility problem,” where technology workers generally find it difficult to move between companies not only because they are privy to a lot of information that companies don’t want to lose to competition but also to keep a lid on escalating wages.

So jurors need to understand the fine line between stealing trade secrets (there hasn’t been any trade in a nascent market such as self-driving cars) and transferring knowledge engineers acquire from being part of a company’s R&D effort. Which is a rather difficult thing to do.

Alsup has also said that Waymo will not be able to present projected financial figures for the self-driving car market because they might influence the jury improperly although it would be able to introduce as evidence documents related to Uber's "Project Rubicon" that include Uber's own projections.

He has said that the case should instead remain focused on the eight trade secrets in question that Uber scoffs at: “by the way, these aren’t trade secrets anyway.”

Waymo has its work cut out: it has to prove that information passed from Waymo to Uber through Levandowski and that Uber then used that information to develop its own self-driving technology.

If Uber loses the case, it has much more to lose than Waymo. First, it will have to pay around $2 billion in damages. Second, it will have to stop using the technology, which could be a big setback for its self-driving car effort. Since Uber is basically a taxicab business, it competes against others like Lyft in the U.S. that is testing Waymo technology.

Self-driving technology could significantly lower cost for the competition, so Uber can’t afford to fall behind. Meanwhile, federal prosecutors have started a separate criminal investigation against Uber and some of its existing or former employees that may see them accused under the Computer Fraud and Abuse Act.

Alphabet currently has a Zacks Rank #3 (Hold). Other technology stocks worth investing in are The Trade Desk (NASDAQ:TTD) , Autohome (NYSE:ATHM) , Facebook (NASDAQ:FB) and Tencent (OTC:TCEHY) . TTD has a Zacks Rank #1 (Strong Buy), while the others are ranked #2 (Buy). Or, take a look at the complete list of today’s Zacks #1 Rank stocks here.

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