Employee ran side businesses, is accused of taking
driverless-car secrets
By Jack Nicas and Tim Higgins
Anthony Levandowski, the former Google engineer at the center of
a battle between the tech giant and Uber Technologies Inc., was
never a typical employee. And for years, Google was fine with
that.
Weeks after Google hired him in 2007 to work on a global photo
database called Street View, Mr. Levandowski, then 27 years old,
registered a startup to sell a sensor system to Google for the same
project, according to public records and former employees of both
companies.
For the next four years, Mr. Levandowski split his time between
his day job at Google and the startup, 510 Systems LLC, an hour
away in Berkeley, Calif., where he directed employees to develop
technology related to his Google projects, including self-driving
cars, according to former 510 Systems employees.
After Google discovered the side business, instead of
reprimanding Mr. Levandowski for a potential conflict of interest,
it ultimately bought 510 Systems for about $20 million.
Now Google parent Alphabet Inc. and Uber are embroiled in a
legal fight over driverless-car technology, with Mr. Levandowski
playing a starring role. The two firms, along with several other
companies, are locked in a race to automate cars, a contest that
could affect the future of transportation.
A look back at Mr. Levandowski's nine years at Google shows an
employee who sometimes operated at the edge of what a typical
company would accept -- even one like Google that encourages
entrepreneurialism among its workers. While Google's approach helps
it create new businesses, it also can spark disagreements between
the company and its employees over who owns certain technology.
Alphabet accuses Mr. Levandowski of stealing its driverless-car
technology and bringing it to Uber, which he joined as its head of
its driverless-car project last year after earning more than $120
million at Google. Alphabet has filed two arbitration claims
against Mr. Levandowski and is suing Uber for allegedly conspiring
with him.
Last week, the judge handling the civil lawsuit asked federal
prosecutors to investigate Alphabet's allegations that Mr.
Levandowski stole the trade secrets.
Uber, a ride-hailing company, denies wrongdoing and is
contesting the accusations in court. It isn't clear how Mr.
Levandowski has responded to the arbitration claims, which are
private. Uber declined to make him available for an interview and
he didn't respond to requests for comment.
This account of Mr. Levandowski's tenure at Google and
simultaneous work for his own companies is based on interviews with
a dozen former 510 Systems and Google employees, and on court
filings and other public records.
Google encourages employees to spend 20% of their work time on
side projects of their choosing that benefit the company, and it
has created a so-called incubator for employees to found startups
inside the company. Some eventually leave to start their own
ventures, such as social-media firms Instagram and Pinterest Inc.
Even Google's co-founders, Larry Page and Sergey Brin, have
launched their own outside companies in recent years, including
firms developing flying cars and an airship.
Mr. Levandowski's outside companies benefited Google for years.
Technology developed by 510 Systems helped Google create its own
maps and avoid paying for third-party data. When Google launched
its self-driving car program in 2009, one of its first vehicles was
a Toyota Prius that Mr. Levandowski and 510 Systems engineers had
rigged up for a TV show.
The employment agreements signed by many Google employees bar
them from starting outside companies that conflict with Google's
interests, such as online advertising. It isn't known when Google
learned about Mr. Levandowski's initial side project, 510 Systems,
or whether his employment agreement permitted his activities
there.
Mr. Levandowki started other businesses later in his Google
tenure, public records indicate, including an online game for
betting on stock-market trends and a California factory building
prefabricated housing. Two of the other later startups led to
Alphabet's claims against Mr. Levandowski and Uber.
Mr. Levandowski, who stands 6 feet 6 inches tall, was born in
Brussels and came to the U.S. in the early 1990s, at age 14. As a
teenager in Marin County, north of San Francisco, he created a
digital map of his school and started a company to provide
technical support for local businesses' websites.
He caught the bug for robots as an industrial-engineering
student at the University of California, Berkeley, where he made
one with Lego pieces that could sort Monopoly money. He also began
experimenting with driverless vehicles, organizing classmates to
enter a 2004 Defense Department competition to race autonomous cars
across the Mojave Desert. To save money, the team built a
driverless motorcycle, dubbed Ghostrider. It crashed within seconds
but is now displayed at the Smithsonian Institution.
Around 2006, before he joined Google, Mr. Levandowski was part
of a digital-mapping project called VuTool, which used sensor
technology developed for the Defense Department race.
Google's Mr. Page was looking for a similar tool for its
burgeoning maps service. He believed Google's mission to "organize
the world's information" needed a lot more data from streets,
according to employees who worked on the project, which became
Street View.
Google's team was struggling with an expensive high-resolution
camera. Sunlight streaked through images. VuTool was moving faster
by using off-the-shelf parts and a system built by Mr. Levandowski
and a few classmates that combined information from multiple
sensors.
Google hired Mr. Levandowski and the VuTool team in the spring
of 2007. A few weeks later, Mr. Levandowski registered 510 Systems,
named after Berkeley's area code. He soon began selling his
sensor-fusion system to Google via a middleman.
The black-and-yellow box became the brains of the Street View
system. It synchronized information from multiple sensors,
including cameras, satellite data and the cars' wheels, so images
gathered as the vehicles drove through neighborhoods would
precisely match where they were taken.
During 510 Systems' first several months, Google was its only
customer. Former 510 Systems employees say the transactions
occurred through a middleman that branded the devices, sold them to
Google and eventually manufactured them directly. Google bought
more than 100 over the first year. Former 510 Systems employees
said they kept quiet about their high-profile customer, giving
Google the code name Aspen.
Mr. Levandowski told few employees at 510 Systems about his
Google job, although some figured it out because he often wore
Google apparel, the former employees say. Fellow engineers on
Google's Street View team knew of Mr. Levandowski's connection to
510 Systems, a former Google employee says.
Alphabet lawyers have suggested Google executives initially
didn't know they were buying technology from one of their own
employees.
"You did not disclose to Google your involvement with 510
Systems...before Google discovered your involvement with them,
correct?" an Alphabet lawyer asked Mr. Levandowski in a deposition
last month, according to a transcript. Mr. Levandowski declined to
answer, invoking his Fifth Amendment rights.
At 510 Systems, Mr. Levandowski appeared sporadically, often
scheduling meetings with managers late at night, former employees
say. He brought on his stepmother, Suzanna Musick, as chief
executive to help manage the dozen or so employees. Former
employees described Ms. Musick, a former consultant, as a competent
manager but unschooled in the technology. Ms. Musick didn't respond
to requests for comment.
By 2008, 510 Systems' devices were helping Google offer
street-level images for dozens of U.S. cities. Then Google halted
its purchases. It had reverse-engineered the system and built its
own, according to employees of both companies.
By that time, 510 Systems was selling its sensor systems to
surveying firms and later to Microsoft Corp. Through the middleman,
510 Systems sold Google camera rigs similar to the Street View ones
for about 20 small planes Google used to take aerial images for its
maps.
Mr. Levandowski's passion for robots hadn't faded. In 2008, he
was asked to make a driverless vehicle to deliver a pizza for a
Discovery Channel show. He formed another startup, Anthony's Robots
LLC, and assembled a few 510 Systems engineers to modify a Toyota
Prius to make it drive on its own. Weeks later, the car --
emblazoned with 510 Systems and Anthony's Robots decals -- drove
over San Francisco's Bay Bridge with a police escort and pizza
inside.
Months later, in 2009, that car became a seed vehicle for
Google's driverless-car project, a bold new venture for a company
based on internet search and advertising.
Over the next year, Mr. Levandowski quietly shifted 510 Systems'
focus toward driverless cars, pulling 510 Systems engineers onto
driverless-car projects. 510 Systems quietly began supplying Google
with self-driving technology, including a modified sensor-fusion
box and a system that connected computers to a car's steering
wheel, gas and brakes.
Photographs viewed by The Wall Street Journal show three of
Google's self-driving vehicles at 510 Systems' headquarters in late
2010.
The companies' unusual relationship hardly registered with 510
Systems employees. "Amongst ourselves we said, 'That's a little
strange, isn't it?'" said former 510 Systems software engineer Ben
Discoe. "But that was extent of it. We liked our jobs."
At last month's deposition, an Alphabet lawyer asked Mr.
Levandowski: "You used confidential information from Google to help
develop technology at 510 Systems, correct?" Then, "You brought
Google Street View source code to 510 Systems...correct?" Mr.
Levandowski invoked the Fifth Amendment.
Two former 510 Systems employees said in interviews Mr.
Levandowski often would return from a day at Google and suddenly
have answers to engineering questions the 510 Systems team had been
struggling with.
One day in early 2011, 510 Systems employees awoke to an email
from Mr. Levandowski calling a companywide meeting. At the
headquarters, they lined up to sign a nondisclosure agreement at a
desk manned by Mr. Levandowski. Then he announced Google was buying
510 Systems and Anthony's Robots for its driverless-car
program.
The 510 Systems team gathered at Google headquarters that
afternoon for barbecue, beers and rides in self-driving cars. The
mood soured when the deal's details came out. Mr. Levandowski had
sold the company for about $20 million, just below the threshold at
which employees would have shared in the proceeds. Google
eventually hired about half of the company's 50 or so
employees.
Mr. Levandowski signed a noncompete agreement that for two years
barred any outside involvement in a variety of areas, including
sensors, robotics and driverless cars.
The relationship between Google and 510 Systems "was completely
tangled, " says Mr. Discoe, the former 510 Systems software
engineer. "I guess the decision to be bought or not be bought was
basically: Are we going to untangle this or are we just going to
give up and merge it?"
More than five years later, the most valuable piece of the
acquisition is 510 Systems' lidar system, a laser sensor crucial to
driverless cars because it allows them to effectively see their
surroundings. The system was the predecessor to the lidar that
Waymo, Alphabet's recently renamed autonomous-vehicle unit, now
uses on its most advanced driverless cars.
That lidar, one of Waymo's most valuable technologies, also is
at the center of the claims Alphabet has filed against Mr.
Levandowski and Uber.
Alphabet has alleged that Mr. Levandowski continued his side
dealings in violation of his noncompete agreement. In August 2012,
a year after the 510 Systems acquisition, a new business making
lidar was founded at 510 Systems' former headquarters, a building
owned by Mr. Levandowski, Alphabet alleges. Public records show the
new company, Odin Wave LLC, was originally registered by Mr.
Levandowski's personal lawyer. That lawyer didn't respond to
requests for comment. At the time, Mr. Levandowski ran the lidar
team at Google.
Mr. Levandowski quit Google in January 2016, days after
launching his own driverless-car venture, Ottomotto LLC. Alphabet
alleges that when he left, he took 14,000 confidential files about
Google's lidar system, and some top engineers. Mr. Levandowski then
merged Ottomotto with the lidar business housed at the former 510
Systems headquarters, Alphabet alleges.
In August, Uber bought the new company for $680 million in
stock. Court documents show Mr. Levandowski received more than $250
million.
Write to Jack Nicas at jack.nicas@wsj.com and Tim Higgins at
Tim.Higgins@WSJ.com
(END) Dow Jones Newswires
May 24, 2017 02:47 ET (06:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Alphabet (NASDAQ:GOOG)
Historical Stock Chart
From Apr 2024 to May 2024
Alphabet (NASDAQ:GOOG)
Historical Stock Chart
From May 2023 to May 2024