February 6, 2018 / 8:20 PM / 3 months ago

In trade-secrets trial, subdued Kalanick says Uber trailed in self-driving cars

SAN FRANCISCO (Reuters) - Former Uber Chief Executive Officer Travis Kalanick testified at a trial over technology trade secrets on Tuesday that delays in Uber’s self-driving car development led him to hire a star engineer from rival Waymo as part of attempts to catch up with competitors.

FILE PHOTO: Uber CEO Travis Kalanick attends the summer World Economic Forum in Tianjin, China, June 26, 2016. REUTERS/Shu Zhang

Kalanick, known to be hard-charging and combative in his work, spoke softly on the witness stand in San Francisco federal court and avoided becoming argumentative in front of the jury in what were his first public comments on allegations by Waymo that Uber stole its self-driving car technology.

The ride-hailing firm’s co-founder, Kalanick testified for less than an hour and will be questioned further on Wednesday by lawyers for Waymo, which sued Uber a year ago saying a Waymo engineer downloaded confidential documents in December 2015 before Kalanick hired him at Uber in 2016.

The 10 jurors will have to decide whether the documents were indeed trade secrets and not common knowledge, and whether Uber Technologies Inc [UBER.UL] improperly acquired them, used them and benefited from them. Their decision will influence one of the biggest technology races in Silicon Valley.

Kalanick testified that in 2015 he became unhappy with the pace of development at Uber’s Advanced Technologies Center, the hub of its self-driving car operations. He said he began negotiations with Anthony Levandowski, regarded as a visionary in autonomous technology, while Levandowski still worked for Waymo, Alphabet Inc’s self-driving car unit.

On the witness stand, Kalanick acknowledged that he was a “big fan” of Levandowski’s.

“Look, I wanted to hire Anthony and he wanted to start a company. So I wanted to come up with a situation where he could feel like he started a company and I could feel like I hired him,” said Kalanick, who appeared in court in a business suit and tie, a departure from the usual Silicon Valley casual.

How he presents himself and the company to the jury is crucial, legal experts said.

Despite Kalanick’s plan, Uber still lags in the competitive field of autonomous vehicles.

When Waymo attorney Charles Verhoeven asked Kalanick if he agreed Google is the industry leader for self-driving cars, the former top Uber executive said: “I think that’s the general perception right now.”

Levandowski is not a defendant in the case but is on Waymo’s witness list. He declined to answer questions at a pretrial deposition last year, citing his constitutional rights against self incrimination, and lawyers for both Waymo and Uber have said they expect him to do the same if called at trial.

Verhoeven has positioned Kalanick as a main figure in the case, emphasizing his competitive nature and desire to win at all costs. During the trial’s opening statements on Monday, Verhoeven said competitive pressures were so great to develop self-driving cars that Kalanick decided “winning was more important than obeying the law.”

The dispute between the companies has captivated Silicon Valley and could help determine who emerges in the forefront of the fast-growing field of autonomous cars.

Between his domineering personality, micromanaging tendencies and broad control over the company through stock ownership and governance rules, Kalanick largely made Uber in his image. He drove Uber’s 2016 acquisition of Otto, the self-driving truck startup founded by Levandowski, which merged the companies’ businesses and put Levandowski in charge of Uber’s autonomous-driving unit.

At one point, Kalanick was shown notes from another Uber executive that captured Kalanick’s sentiments about the Otto deal. According to the notes, Kalanick said some objectives of the Otto deal were gaining a “pound of flesh” as well as “IP,” meaning intellectual property.

Asked if he ever said “pound of flesh” regarding the Otto deal, Kalanick said he did not know.

“It’s a term I use from time to time,” he said.

Kalanick also said he could not recall listing “IP” as an objective. Verhoeven then asked if Kalanick knew that “intellectual property” referred to property that belongs to someone else.

“Yes, sir,” Kalanick said.

Uber bought Otto about three months after it publicly launched.

Kalanick said he promised Levandowski and his team nearly $600 million in incentive payments if they met certain technical milestones with the development of self-driving car systems.

Kalanick has stayed mostly out of public eye since he was forced by investors to resign in June. His exit followed months of scandal, including a public allegation of sexual harassment that triggered an internal investigation and resulted in more than 20 employees being fired, litigation and federal criminal probes that led shareholders to question his leadership abilities. He remains on the board of directors.

Reporting by Dan Levine; Writing by Heather Somerville; editing by Peter Henderson and Grant McCool

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