Uber: Ex-employee’s claim that we hid trade secret theft was an effort to extort money

Key Points
  • Uber's top lawyer said an allegation by an ex-employee that the company tried to hide the theft of trade secrets was an effort to extort money
  • Alphabet's Waymo is suing Uber over the alleged theft of trade secrets
Uber's headquarters, in San Francisco
David Paul Morris | Bloomberg | Getty Images

Uber's top lawyer on Wednesday denied an allegation by an ex-employee that the company deliberately used secret messaging systems in an effort to hide the theft of trade secrets -- and that the allegation was part of an effort to extort money from Uber.

Angela Padilla, deputy general counsel at the company, said in court testimony that the allegation from ex-employee Richard Jacobs that the company took steps to cover its tracks when stealing trade secrets from Alphabet's Waymo was not true. She added that Jacob's claims were an effort to extort money from the company.

The evidence in question is a letter from Jacobs' attorney alleging that Uber advised employees to use ephemeral messaging systems, like Wickr, and non-attributable devices to hide their tracks to protect the company from potential litigation.

Padilla called Jacobs' claims meritless. Jacobs — a former Uber security analyst, was later paid $4.5 million after he left the company, Padilla said.

In a statement to the Wall Street Journal, Mr. Jacobs's lawyer — Martha Boersch — said she was surprised by Uber's statement "because Mr. Jacobs's concerns about conduct at Uber have in fact been taken seriously by Uber, which is investigating and which referred those concerns to the U.S. attorney's office." Boersch further said that "Mr. Jacobs is a an honorable and honest man who found some conduct at Uber ethically troubling and potentially illegal, and he reported it."

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Jacobs' letter, provided to the court by the Justice Department just days before the trial was set to begin, prompted the judge in the case to delay the trial.

Judge William Alsup questioned Padilla on why the letter was withheld from Uber's lawyers handling the Waymo litigation even though some Uber board members, including Travis Kalanick, saw it, saying "It looks like you covered this me it does not add up."

"It was our CEO practice was to escalate everything to Travis." Padilla said.

"You said it was a fantastic BS letter, nothing to it..and yet you paid $4.5 million dollars." Judge Alsup said. "People don't pay that kind of money for BS," Alsup added.

Uber's board members all saw the letter from Jacobs' attorney, said Padilla, including Bill Gurley, Garrett Camp, Ryan Graves, David Bonderman, Wan Ling Martello, Arianna Huffington, and Travis Kalanick.

Padilla said in retrospect they should have turned over the letter to Waymo lawyers, but she denied it was purposefully withheld.

Waymo sued Uber in February, claiming that former Waymo executive Anthony Levandowski downloaded more than 14,000 confidential files before leaving the company. Levandowski later set up a self-driving truck company, called Otto, which Uber acquired.

The letter in question on Wednesday has raised questions about Uber's security practices and using communications methods like disappearing chat apps and shadow servers to hide information.

CEO Dara Khosrowshahi tweeted during the hearing that Uber employees no longer use these.

An Uber spokesperson said, "today's hearing changed nothing about the facts of Waymo's case, and did nothing to support their claims that Uber is using their alleged trade secrets. We look forward to our day in court and are as confident in the merits of our case as ever."

A Waymo spokesperson said Wednesday's hearing, "fit Uber's pattern of destroying and withholding reams of evidence relevant to our trade secrets case," and confirmed that Uber executives "were aware of these inexcusable practices. We look forward to the additional discovery granted by the Court and to presenting our case in front of a jury at trial."

This is the second time the trial has been delayed, the first in October when Waymo requested more time to go through evidence Uber had not previously disclosed.

The judge set a new trial date for February 5.

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