August 5, 2020

Former Google engineer Anthony Levandowski was sentenced this week to 18 months in prison after admitting he stole trade secrets from Google related to self-driving car technology.

In sentencing Levandowski to jail time, U.S. District Judge William Alsup sent a clear message to would-be IP thieves: brilliance is no excuse for theft. In denying the Levandowski defense team’s request for home confinement in lieu of jail, the Court refused to “give a green light to every future brilliant engineer to steal trade secrets.”

The severity of the Levandowski sentence is remarkable and serves as a stark reminder of the importance of protecting trade secrets in the workplace. In an age of ever increasing job mobility, the temptation by employees to take potentially valuable information with them when they leave is a constant reality. In the case of Levandowski, shortly after leaving Google he joined Uber Technologies to continue his work in the development of driverless car technology.

Before leaving Google, Levandowski downloaded approximately 14,000 files to his personal computer. These files contained development schedules and product designs for Google’s driverless car technology.

Though he claims he never used any of the information with Uber, that didn’t stop Google from suing Uber for theft of trade secrets. That lawsuit was resolved in 2018, with Uber agreeing to a $245 million settlement.

The lesson here: It may be tempting to “go after” your competition’s top talent, and that’s okay. But there can be a fine line between using the talent, skills and instinct of your new hire and using the information gathered from his former employer. Failure to understand where that line was drawn, cost Uber $245 million.

What steps should employers take to protect intellectual property and trade secrets from theft by a potentially disgruntled employee? Well, there is a lot you can and should do to protect your company. Here are a few places to start:

Nondisclosure agreements
All employees with access to confidential information should be made to sign a nondisclosure agreement (NDA). Your NDA should be as specific and as narrowly tailored as possible. Broad, overly general language can be left up to interpretation if a matter goes to court. You want to spell out exactly what trade secrets your employee cannot disclose. An employer that assumes broad language will cover all bases, may expose his organization to trouble down the road.

Protect your trade secrets
When hiring a new employee ask yourself, does this person need to have access to this information to successfully do her job? If the answer is no, then restrict access. Limiting who has the ability to steal your materials is one of the easiest ways to protect your IP.

Invest in technology
Invest in the technology to make your trade secrets and intellectual property hard to steal. Protect your information behind security walls that will easily identify anyone who accesses the information. Create a system where every employee who comes in contact with proprietary information leaves as many digital fingerprints behind as possible. Likewise, conducting regular audits of your systems may help detect irregular activities before a theft takes place.

Remote Acces
Thanks to COVID-19, this one is trickier than ever. Once you allow an employee to access your confidential materials from home, there is an inherently greater risk of a breach. Ideally you want to limit access to your sensitive materials to company-owned equipment only. However, the reality in 2020 is that millions of employees are working remotely. Review your policies to make sure they cover remote work, offer retraining to employees regarding handling company materials remotely, and regularly monitor your remote employees.

Update HR Policies
Many employers allow an employee full access to everything until his final day on the job. That’s an unwise gamble. If an employee gives notice, or you have to terminate, access to sensitive information should be immediately blocked. Employers may be hesitant to restrict access for fear it will appear they don’t trust the soon-to-be former employee. This isn’t about personal feelings, it is about sound business practices. Don’t think about it as potentially offending one individual; view as protecting the entirety of your organization.

Google’s attorneys took the right steps to protect the company with a strong employment agreement on the front side, and when things went bad with Levandowski, they were able to obtain a judgement and a settlement totaling more than $400 million on the back end.

With the economic uncertainty the country faces thanks to COVID-19, there are record numbers of employees being furloughed and laid off. This could lead to a rise in the number of employees attempting to steal trade secrets and intellectual property. Now is the time to sit with an attorney and review your processes to make sure your organization’s intellectual property assets are protected before a theft occurs.

B. Kevin Burke Jr. is an attorney with Gross Shuman, P.C. He focuses his practice on the litigation of contract disputes, labor and employment issues, intellectual property protection, and trade secret cases. He can be reached at 716.854.4300 ext. 292 or [email protected].