For once, Uber needs co-founder Travis Kalanick to speak up

Uber Technologies Inc has spent much of the past year confronting and atoning for business practices adopted when co-founder Travis Kalanick ran the place.As Waymo’s $1.9bn trade-secrets lawsuit against Uber goes to trial on February 5, the company’s new leaders will have to turn to Kalanick as a star witness.Kalanick has maintained a board seat — and a strained relationship with Uber’s new chief executive officer, Dara Khosrowshahi — since he was forced out as CEO last year. Khosrowshahi has been trying to move the company beyond Kalanick’s long shadow, but that’ll be tougher while Uber fights to deny claims by Waymo, the driverless-car unit of Google parent Alphabet Inc, that it stole Waymo’s technology.Uber and Kalanick have been anticipating this moment since his first deposition in July. The questions from Waymo’s lawyers closely tracked Waymo’s central claim — that Kalanick conspired with former Google engineer Anthony Levandowski to orchestrate the alleged theft. Although Kalanick isn’t a defendant in the case, to be heard in federal court in San Francisco, failure to refute the allegation would mean “it’s not just an Uber problem, it’s a Kalanick problem,” says Eric Goldman, a law professor at Santa Clara University who focuses on Internet and intellectual-property cases. “Uber and Kalanick are 100% in alignment. They have to defeat that theory.”Waymo has its own challenge: explaining to jurors how the alleged theft was buried in Uber’s acquisition of Otto, Levandowski’s driverless startup, for more than $600mn in stock. Levandowski created the company in January 2016, 12 days before he left Google, taking with him more than a dozen employees and, Waymo alleges, proprietary data. “We have accumulated significant and compelling evidence of Uber’s theft and use of our trade secrets, and we look forward to finally presenting our full case to the public,” Waymo said in a statement.Karen Dunn, a lawyer representing Uber at trial, says she’s confident that “Uber witnesses will be able to explain why you’d want to do this acquisition in ways that are very intuitive.” Kalanick declined to comment for this story.During Kalanick’s July deposition, a first grilling that lasted more than six hours, Waymo focused on a meeting he and other Uber executives had with Levandowski in March 2016. A Waymo attorney pressed Kalanick for his reaction to what he described as a surprise revelation that Levandowski “had some disks and some content” from Google.“I said that he — that we, as a whole — need to make sure that content does not make it to Uber, and that he needs to talk to attorneys to figure out how to make sure that’s done properly,” Kalanick said in July. While he acknowledged that he wanted to poach Google’s best engineers because Google had superior technology, he said he knew better than to try to steal the tech itself. Levandowski has said the disks contained confidential Google source code and software for self-driving cars and that he had them shredded after Kalanick told him to “do what he needed to do” with them, according to a report by a forensics firm that Uber commissioned to vet the Otto team when it acquired the company.Kalanick’s testimony will be all the more important because jurors are unlikely to hear Levandowski’s version of events. The engineer invoked his Fifth Amendment right against self-incrimination almost a year ago, shortly after the suit was filed, and is likely to do the same when US District Judge William Alsup compels him to take the witness stand. Levandowski may have the right idea: In December, Alsup unsealed a letter from prosecutors confirming that a criminal investigation of the alleged trade-secrets theft is under way. In July and during another deposition in October, Kalanick repeatedly said that as CEO he relied on attorneys and subordinates to handle the legal requirements of the Otto acquisition.During jury selection on January 31, Uber, via an agreement with Waymo, sidestepped the question of whether it could find jurors in its hometown unbiased by media reports about Hell, Greyball, or Ripley, methods it employed under Kalanick to, respectively, deceive competitors, elude regulators, and stymie law enforcement. (The US Department of Justice is investigating the first two.)While jurors won’t hear about that stuff at trial, they may hear how Uber was forced in November to reveal that it quietly paid $7.5mn to settle a wrongful-termination suit filed by a whistleblower who alleged the company stole trade secrets and worked to conceal evidence from discovery in potential lawsuits.Alsup scolded an Uber lawyer for not giving Waymo information about the whistleblower suit. “You wanted this case to go to trial so that they didn’t have the benefit of this document,” he said at a hearing in November. “That’s the way it looks.”The breakup between Uber and Alphabet, which still has a stake in the ride-hailing company, has taken years to get even this far. In 2014, Google’s chief legal officer, then on Uber’s board, was the one to tell Kalanick the search giant planned to compete in ride-hailing. Kalanick felt burned, he said in the July deposition, but he was still trying to partner with Alphabet’s driverless-car division as recently as October 2016, when he broached the idea in a phone call with Alphabet CEO Larry Page.Page had other concerns, Kalanick recalled in the deposition: “He kept saying that we have taken his IP.” The former Uber CEO said that was a misunderstanding: “I was trying to tell him, like, just because we have hired his people, we haven’t taken his IP.”Venture capitalists, investment banks, and employers are paying close attention to the trial, says intellectual-property lawyer Janelle Waack. If Uber loses, acquisitions such as the Otto deal are going to get a lot tougher, she says.“The people who raise the capital are going to be asking, ‘Where did your technology come from?’?” says Waack.The question for the acquirer: “What do I need to do to ensure that I don’t get hit with a $2bn lawsuit because I hired away talent from my competitor?”