Uber Technologies, Inc. (“Uber”) has been no stranger to the news these days as the technology company finds itself increasingly embroiled in legal battles. Recently, the company was in the spotlight over the massive data breach and theft of millions of users’ personal information. Additionally, Uber has long been involved in a high-profile trade secrets theft case, defending itself against Waymo, an autonomous-car company under the parent company of Alphabet, which is also the parent company to Google.  Waymo alleges that a former engineer, Anthony Levandowski, downloaded more than 14,000 confidential Waymo files before resigning to start his own autonomous truck-driving company; a company which was later acquired by Uber.

The latest chapter in the legal saga, however, focuses on Uber’s use of encryption and messaging applications.  Uber has long relied on the defense that Waymo has no evidence of the alleged theft of trade secrets.  While this defense generally holds merit on its own, Uber’s use of a messaging application, Wickr, has added a new wrinkle to the case.

Wickr is a mobile messaging application that allows for the auto-deletion of messages and requirement of passcodes to retrieve messages.  While there is no law that prohibits companies from using such applications, rules of evidentiary procedure generally require companies to preserve records that may be deemed relevant to litigation.  As such, Uber’s mere use of Wickr is the first major case to raise the issue of encryption and automated-deletion within companies.

U.S. District Judge William Alsup has already stated that failure to turn over relevant evidence such as these specialized communication tools could equate to malpractice.  Alsup has also stated that the mere use of an application that automatically deletes its chatlogs makes it appear as though evidence destruction was intentional from the start.  And because federal law allows judges to determine and tell jurors whether they may presume that evidence destruction was negative, such a ruling could devastate Uber’s defense as it has repeatedly relied on the stance that Waymo has not been able to provide concrete proof of theft.  Therefore, if the jury believes that the use of Wickr ultimately destroyed evidence that may have proven the theft, Waymo may succeed on its claims without finite proof.

Many experts in this field believe that it is reasonable to presume that a company’s mere use of an automatic-deletion application demonstrates an intent to cover up nefarious dealings.  And as such, the use of forensic software to retrieve deleted messages or decrypted encrypted applications is on the rise. Because even minor conversations between executives may be relevant to any legal disputes a company is involved in, such software is often used to procure or retrieve deleted evidence in such legal disputes.

Two employees at Uber have already testified that multiple teams at Uber used Wickr, including Anthony Levandowski.  However, Uber’s new chief executive officer, Dara Khosrowshahi, has stated that he directed Uber employees to discontinue their use of such applications since he began his tenure in August.

While only time will tell how courts will rule on the use of such messaging applications and their impact on litigation, it would behoove clients to consult experienced intellectual property counsel regarding proper evidentiary procedure when faced with litigation.

Related articles:
Managing Principal Gary Sorden Pens Priori Legal Article on Trade Secrets

For more information on this topic, please visit our Corporate Governance & Counseling service page, which is part of our Corporate & Commercial Practice.

Klemchuk LLP is an Intellectual Property (IP), Technology, Internet, and Business law firm located in Dallas, TX.  The firm offers comprehensive legal services including litigation and enforcement of all forms of IP as well as registration and licensing of patents, trademarks, trade dress, and copyrights.  The firm also provides a wide range of technology, Internet, e-commerce, and business services including business planning, formation, and financing, mergers and acquisitions, business litigation, data privacy, and domain name dispute resolution.  Additional information about the corporate law firm and its corporate attorneys may be found at www.klemchuk.com.

Klemchuk LLP hosts Culture Counts, a blog devoted to the discussion of law firm culture and corporate core values with frequent topics about positive work environment, conscious capitalism, entrepreneurial management, positive workplace culture, workplace productivity, and corporate core values.

Also published on Medium.