Uber-Waymo trial delayed as U.S. judge raises prospect of 'cover-up'

By Heather Somerville and Dan Levine

SAN FRANCISCO (Reuters) - Uber Technologies Inc withheld evidence in a lawsuit filed by Alphabet Inc's (GOOGL.O) Waymo, a U.S. judge said on Tuesday, delaying a trial to give Waymo time to review a letter alleging Uber trained employees to steal trade secrets and hide their tracks.

The multibillion-dollar case has hobbled Uber's [UBER.UL] self-driving vehicle ambitions, and the latest setback comes as new Chief Executive Dara Khosrowshahi is working to lock in a major share sale this week and prepare for an initial public offering in 2019.

The hearing on Tuesday centred on a letter from a lawyer for former Uber security analyst Richard Jacobs that Uber did not show Waymo as both sides prepared their cases.

U.S. District Judge William Alsup agreed to Waymo's request to delay the trial scheduled for next week, saying in San Francisco federal court that "if even half of what this letter is true it would be a huge injustice to force Waymo to go to trial" as planned.

It was the second time the judge has agreed to delay a trial at Waymo's request. In October, he chided Uber layers for disclosing thousands of emails to Waymo just before the trial had been set to begin.

Alsup expressed his frustration with the company again on Tuesday.

“You’re just making the impression that this is a total cover-up," he told Uber at the hearing.

Jacobs testified on Tuesday that Uber deliberately researched competitors and used technology to avoid a paper trail.

Uber employees researching rivals were given training with the purpose to "impede, obstruct or influence any lawsuit against Uber," Jacobs said, including a communication strategy "to ensure we didn't create a paper trail that came back to haunt the company in any potential civil or criminal litigation."

Waymo has estimated damages in the case at about $1.9 billion and wants to curtail Uber's self-driving car program, which Waymo says uses its technology.

Uber has denied using Waymo trade secrets and rejects the financial damages claim, but has fired the leader of its autonomous vehicle division, who is alleged to have stolen Waymo data before joining Uber.

An Uber representative on Tuesday referred to an earlier company statement, which said Uber “has been waiting for its day in court for quite some time now” and was keen to have a jury hear the merits of the case.

Jacobs said that Uber reached a $4.5 million settlement, including a consulting contract, after he was fired. Under questioning by Uber lawyers, he described the importance of using secure communications for legitimate reasons, including ensuring the safety of workers abroad.

Waymo has accused Uber of concealing Jacobs' letter to an Uber in-house lawyer, saying the note contained important facts about the case, according to a court filing on Monday.

Jacobs testified at the hearing that the letter contained allegations that Uber's markets analytics group "exists expressly for the purpose for acquiring trade secrets, code base and competitive intelligence."

Jacobs said he learned of this activity through discussions at Uber with his manager and other colleagues.

Waymo sued Uber in February, claiming that former Waymo executive Anthony Levandowski downloaded more than 14,000 confidential files before leaving to set up a self-driving truck company, called Otto, which Uber acquired soon after.

Uber denied using any of Waymo's trade secrets. Levandowski has declined to answer questions about the allegations, citing constitutional protections against self-incrimination.

The trial had been scheduled to begin on Dec. 4. Waymo said it learned of the new evidence last week after the U.S. Department of Justice shared it with Alsup.

The ride-hailing service is the most valuable private U.S. company, but its aggressive expansion has been dogged by scandals.

A consortium led by Japan's SoftBank Group Corp(9984.T) this week is launching a multi-billion dollar tender offer for Uber shares, a deal that would bring the ride services company a well regarded, deep-pocketed investor.

Most recently, Uber revealed that the data of 57 million Uber customers and 600,000 drivers had been stolen in a breach more than a year ago, and that the company had paid two hackers $100,000 to cover it up. Governments across the globe have launched investigations into the incident.

(Reporting by Heather Somerville; Writing by Dan Levine and Peter Henderson; Editing by Meredith Mazzilli)