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Intellectual Property Theft Is Still Theft

Jun 1, 2020


Situation

In 2009, a team of Google employees begins work on Project Chauffeur, the name given to Google's then-top-secret autonomous vehicle initiative. One of the key members of this team is engineer and purported technology wunderkind Anthony Levandowski. Over the next several years, Levandowski is instrumental in the development and rollout of the company's self-driving vehicles, most notably in his leadership of the design team for Google's custom lidar technology, the remote measuring system enabling its autonomous vehicles to navigate traffic and detect obstacles in their paths.

In January 2016, however, Levandowski abruptly resigns from Google to start his own self-driving technology company, and he recruits two of his former Google colleagues to join him in his new venture. Six months later, this new company is purchased by rideshare giant Uber in an estimated $680-million deal, and Levandowski is tapped to lead Uber's autonomous vehicle efforts. Meanwhile, Project Chauffeur also goes through a formal change of ownership, with control of the initiative being transferred to Google's affiliated corporation, Waymo.

Later that year, an external component supplier accidentally copies a Waymo employee on an email intended for Levandowski's Uber team. The email contains a circuit-board drawing for Uber's new lidar device, and the Waymo recipient notes a disturbing degree of similarity between these drawings and the circuit boards in Waymo's own devices.

A forensic analysis of Waymo's servers reveals that, six weeks before his resignation, Levandowski downloaded some 14,000 Project Chauffeur files to his personal laptop. These files contained nearly 10 gigabytes of information about the design, assembly, and testing of Waymo's lidar sensors along with other business information related to the project. The analysis finds that the files were first downloaded to a company laptop and then copied to an external drive and that a new operating system was then installed on the company laptop to trigger a complete reformatting-evidence suggesting an attempt by Levandowski to erase all traces of this digital transfer.

In addition, internal text and email records demonstrate that Levandowski had been in regular contact with Uber's chief executive officer at the time, Travis Kalanick, while Levandowski was still employed at Google and that he had told at least one colleague that Uber was interested in acquiring the team responsible for Waymo's lidar.

Waymo promptly files suit against Uber on claims of patent infringement, unfair competition, and violation of state and federal trade secret laws, alleging that the theft of this information had "netted [Levandowski's company] over half a billion dollars and allowed Uber to revive a stalled program, all at Waymo's expense." Separately, Google also seeks damages from Levandowski himself, alleging that he built his new business by misusing confidential information and poaching employees from his former employer, in violation of employment agreements he signed while at Google.

While acknowledging that Levandowski took digital files with him when he left Google, the defense vehemently denies that the engineer ever used the information in his subsequent work or shared the contents with anyone. The defense questions the validity of Waymo labeling the files as trade secrets, arguing that the technical plans reflect "obvious configuration[s] in view of known design considerations" and that the files were of such low value to Google that the company had considered storing them on a third-party server. The defense describes Waymo as a company rife with dysfunction that is rapidly losing its technical advantage in the field because of staff turnover and bureaucratic inertia. It labels the litigation as a frivolous attempt by Waymo to obstruct a market competitor and score retribution against its talented former employee.

After a circus-like legal battle in which Levandowski and ex- Uber executive Kalanick are questioned for everything from a text exchange quoting the movie Wall Street's "greed is good" speech to meeting notes stating Kalanick had a desire to "find cheat codes and use them," Uber and Waymo reach a settlement agreement; Uber agrees to pay Waymo's parent corporation a 0.3 percent stake in Uber, representing roughly $245 million in stock.

Levandowski's own troubles, however, are far from over. A federal grand jury issues a criminal indictment against the engineer for theft of trade secrets, and an arbitration panel awards Google $179 million in damages for Levandowski's breach of his employment agreement. In March 2020, Levandowski pleads guilty to one count of trade secret theft in exchange for a sentence not to exceed 30 months in prison and is directed to pay an additional $765,000 in restitution to Waymo's parent corporation for its costs in assisting the criminal investigation.


Question

If the engineer in this case were a member of ASCE, would his conduct violate the ASCE Code of Ethics?

Discussion

Fundamental Canon 4 of the ASCE Code of Ethics reads: "Engineers shall act in professional matters for each employer or client as faithful agents or trustees, and shall avoid conflicts of interest." Guideline f under that canon dictates, "Engineers shall not use confidential information coming to them in the course of their assignments as a means of making personal profit if such action is adverse to the interests of their clients, employers, or the public."

While the overall obligation of "faithful service" is commonly understood to last only for the length of the client or employment arrangement, the obligation of confidentiality does not have a similarly precise expiration. The delivery of engineering services often requires a client or employer to disclose highly sensitive information about business plans or needs, and the trust necessary to permit such exchanges could not develop if engineers could make personal use of this information simply by walking away from a job.

A better reading might focus on the "interests" language of this ethical principle, signifying that an engineer must keep confidences for as long as disclosure might prove harmful to the public or to the owners of the information. This reading clarifies that the boundaries of confidentiality must be set in each case by the client's or employer's needs, and it also allows for circumstances in which engineers might deem that disclosure is required. (For example, when the public interest takes precedence to protect others or to comply with a legal mandate.)

Apart from Canon 4, Fundamental Canon 5 requires engineers to "build their professional reputation on the merit of their services and … not compete unfairly with others," while guideline e highlights the engineer's ethical obligation to "recognize the proprietary interests of others." This guidance offers further reinforcement for the premise that an engineer who receives sensitive information from a client or employer may not subsequently use that information to gain an unfair commercial or competitive advantage.

In the case described here, the engineer made personal copies of his employer's proprietary information, and despite his attorneys' claims, it seems unlikely that after making the effort to abscond with 14,000 digital files, he never once referred back to them or used them in connection with his development of similar designs for his new employer. In combination with his other actions before leaving Google-his conversations with Uber's chief executive and his discussions with fellow employees about Uber's hope to acquire the team-it seems likely that the engineer was already anticipating the acquisition of his new company by Uber and that he abused his access to Google's content and Google's staff to prepare a more lucrative package for Google's competitor. If ASCE's Committee on Professional Conduct were asked to review this case, it is likely it would find that the engineer had acted against his employer's interests and engaged in unfair competition, in violation of Canons 4 and 5.

While this case involves a highstakes, high-profile dispute between two titans of the tech industry, the ethical concepts illustrated by this case may be applied in any case involving the departure of a key employee to a private practice or other competitor. Engineers in such circumstances must take care to remember that while general knowledge, experience, and skills are fully portable from one workplace to another, an employer or client's intellectual property or private content is not.


Tara Hoke is ASCE's general counsel and a contributing editor to Civil Engineering.

Civil Engineering, May/June 2020, © American Society Of Civil Engineers. All Rights Reserved