Originally published by Austin TX Business Law Blog.
What does the Defend Trade Secrets Act mean for employers?
The case of Waymo v. Uber was closely followed nationally by technology companies, attorneys, and many others. While the case ended suddenly in a settlement, it still provided vital insight into the realm of trade secrets law under the new Defend Trade Secrets Act. Our Austin trade secret lawyers discuss the case of Waymo v. Uber and the Defend Trade Secrets Act below.
The Defend Trade Secrets Act
In 2016, the Defend Trade Secrets Act was signed into law. This new law created a federal cause of action for the theft of trade secrets. Under the law, the owner of a trade secret can bring a federal civil action when the trade secret relates to a product or service in interstate commerce or intended for use in interstate commerce.
Prior to enactment of the law, trade-secret holders could only sue in state court for misappropriation of their trade secrets. State laws vary substantially as to what constitutes a trade secret and what remedies are available for employers and others who suffer the misappropriation of a trade secret. Since the law is fairly new, courts are still interpreting its various clauses, making large cases like Waymo v. Uber significant.
Waymo v. Uber
Last year, Waymo, a self-driving car company created by Google, filed a lawsuit against Uber. Waymo claimed that Uber was liable under the Defend Trade Secrets Act. According to the company, a former Google employee allegedly downloaded thousands of files from its hardware systems then launched Otto, a self-driving truck company, which Uber went on to purchase.
A high profile trial took place, during which evidence emerged of the employee’s alleged texts with a former Uber CEO referencing the movie “Wall Street” and referring to burning the village. The ultimate focus of the trial was whether Uber misappropriated Waymo’s trade secrets.
As suddenly as the trial began, it ended in an abrupt settlement. Uber agreed to pay Waymo .34 percent of its equity, estimated to be worth $245 million. While the case did not proceed to the jury, it still provides some takeaways for employers. The case demonstrates the potential dangers of hiring from competitors. It further shows that bringing a federal trade secrets case comes with challenges, as the judge in this matter required a high standard of proof for proving Waymo’s trade secret claims.
Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.
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