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Alphabet Suing Uber Over Self-Driving Car Technology

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Uber badly needed self-driving car technology because it was in danger of getting pushed out of the market if many cheaper ride-hailing services using self-driving technology (no human driver) were to enter the market. So it assumed a not-so-honest way of getting it. That’s what Alphabet (GOOGL - Free Report) is claiming after discovering the theft of its technology by a former Googler.

The Technology in Question

Google has for long held that its technology, which includes hardware and software components, is superior to others. The company, which originally used LiDAR based systems from Velodyne, later developed a number of such systems for close-range, mid-range and long-range “vision” of self-driving cars. These systems generate millions of laser images per second that offer a much clearer picture of the area surrounding the car and helps it take more accurate decisions.

Additionally, the company recently announced that it had devised a more economical system that would take its cost from $75,000, to $7,500, thus making it commercially viable.

The Accused

Anthony Levandowski has been accused of downloading 14,000 highly confidential files (9.7GB of data), including Waymo's LiDAR circuit board designs to an external disk drive using specialized software. He then downloaded a new OS to his company-supplied laptop that effectively deleted information, in a rather elaborate attempt to erase his activity. Strangely, Levandowski didn’t use the laptop much after the new OS was installed.

After quitting Google, Levandowski set up a self-driving trucking company called Otto, wooing fifteen other Waymo engineers, who brought additional supplier lists, manufacturing details and other trade secrets.

Otto quickly sold itself to Uber for $680 million.

Uber’s Response

Uber remains partners with Google for other technology despite their increased competition on the self-driving front. As an initial response, a Uber representative said, “We take the allegations made against Otto and Uber employees seriously and we will review this matter carefully.”

Later, this changed to: “We are incredibly proud of the progress that our team has made… We have reviewed Waymo's claims and determined them to be a baseless attempt to slow down a competitor and we look forward to vigorously defending against them in court. In the meantime, we will continue our hard work to bring self-driving benefits to the world.”

Other Details

The discovery of theft was intriguing: A Uber supplier had inadvertently copied a Google executive in a mail titled “Otto files.” The mail was being sent to people at Uber that Google thinks were involved with Uber’s self-driving technology. 

Google found that the replicated technology, the diagrams of which were attached to the email, bore a close resemblance to its proprietary technology and was based on Waymo trade secrets. “Moreover, the Replicated Board is specifically designed to be used in conjunction with many other Waymo trade secrets and in the context of overall LiDAR systems covered by Waymo patents,” the complaint reads.

Upon inquiry with the Nevada Governor’s Office of Economic Development and Department of Motor Vehicles, it was found that Uber said its technology was internally developed.

The Big Picture

As a Bloomberg report points out, Levandowski didn’t start out at Google. He has been working on autonomous vehicles for some time, founding a startup called 510 systems in 2001 that he later sold to Google. The technology this startup brought is the foundation of Google’s technology.

At the end of the day, engineers do like to move around because it’s more profitable and allows them liberties that aren’t available for sticking around at a big corporate house like Google. This is neither the first nor last time companies have whisked away people from competitors. All the major tech companies including Google itself, Microsoft (MSFT - Free Report) , Facebook , Twitter , Apple (AAPL - Free Report) , you name it, have done likewise.

Engineers are the life blood of companies like Google while on the other hand, the big companies are the only ones that can make engineers rich. So while Google could win this battle, the war will go on.

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