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Uber to pay $245 million to settle Waymo's theft allegations

Uber to pay $245 million to settle Waymo's theft allegations

February 11th, 2018 by Associated Press in National News

FILE - In this Dec. 13, 2016, file photo, the Waymo driverless car is displayed during a Google event in San Francisco. Uber is settling a lawsuit filed by Google’s autonomous car unit alleging that the ride-hailing service ripped off self-driving car technology. Both sides in the case issued statements confirming the settlement Friday, Feb. 9, 2018, morning in the midst of a federal court trial in the case. (AP Photo/Eric Risberg, File)

SAN FRANCISCO (AP) — Uber is paying $245 million to Google's self-driving car spinoff to end a legal brawl which aired out allegations of a sinister scheme that tore apart the once-friendly companies.

The surprise settlement announced Friday came as lawyers for Uber and Waymo, a company hatched from Google, prepared to wrap up the first week of a trial that had attracted international attention.

Waymo filed its lawsuit nearly a year ago , adding to Uber's woes with allegations of a bold high-tech heist orchestrated by its former CEO, Travis Kalanick, and a former Google engineer. That engineer, Anthony Levandowski, subsequently went to work for Uber, and was later fired when he declined to answer questions about the theft charges, citing his Fifth Amendment right against self-incrimination.

Uber and its ride-hailing service had already been tarnished by the company's acknowledgement of rampant sexual harassment within its ranks, a yearlong cover-up of a major computer break-in, and the use of duplicitous software to thwart government regulators.

As with most settlements, the truce required some compromise by both sides. Uber initially offered to settle the case for $490 million just before the start of the trial Monday, but the agreement didn't provide Waymo with enough assurances that its technology wouldn't be improperly used, according to two people familiar with the thinking of both parties in the lawsuit. The people asked not to be identified because the settlement talks were confidential.

Not long after Thursday's trial proceedings ended, the top lawyers from both companies, Uber's Tony West and Waymo's Kevin Vosen, met to hammer out an agreement. The resulting compromise cut Uber's payment in half, but provided Waymo with the guarantees it wanted to prevent its technology from being used in Uber's autonomous cars.

The payment, to be made in Uber's stock, is a fraction of the nearly $2 billion in damages a Waymo expert estimated Uber's alleged theft had caused. But U.S. District Judge William Alsup had refused to allow Waymo to use that figure in the trial.

"This has the look of two companies trying to snatch victory from the jaws of defeat," said Dan Handman, a Los Angeles lawyer specializing in trade secrets for the firm Hirschfeld Kraemer. "You try to structure a settlement so both sides can spin it as a win-win situation."

A settlement in the middle of a trial is highly unusual, but both companies had motives for doing so in this case.