U.S. District Judge William Alsup in San Francisco also partially granted Alphabet's self-driving Waymo unit's bid for an injunction against Uber's self-driving efforts, and rejected Uber's arguments that Waymo's trade secret allegations should proceed in private arbitration.
"It is very rare for a judge to refer a matter over to the USA attorney and signals the judge's displeasure with Uber in the trade secrets civil lawsuit", said Carl Tobias Williams, chair in law at the University of Richmond School of Law.
The court takes no position on whether a prosecution is or is not warranted, a decision entirely up the USA attorney. He recently agreed to step down as Uber's top self-driving auto executive, though he still works at the company. Otto was later acquired by Uber.
Its decision to assert a separate case against Uber in federal court "was not only reasonable but also the only course available, since Waymo had no arbitration agreement" with Uber, said Alsup, who elsewhere in the opinion said Waymo had "dutifully" gone to arbitration against Levandowski.
After leaving Google past year, Levandowski's self-driving truck start-up, Otto, was soon acquired by Uber - which, Waymo alleged in court proceedings, was a ruse to help Uber get its hands on Google's self-driving secrets. Although he will remain at Uber, Levandowski said he will no longer work on certain autonomous vehicle technologies for the company. Alsup, in his filing, said the case that Levandowski stole trade secrets seemed clear-cut to him.
One, at least some parts of Uber's self-driving-car business (likely the its LiDAR division) will have to come to a halt until the case ends - Judge Alsup placed parts of Uber's automated auto business on hold with a preliminary injunction, though kept which parts secret to protect Uber's intellectual property. The document is sealed so it's unclear to what extent Uber will be affected.
All of this will likely burden Uber should its dispute with Waymo proceed to a public trial.
Arbitration would have benefited Uber primarily by keeping the case out of the public spotlight and also by limiting the scope of information sharing, or discovery.
Instead of waiting for a court decision that could squash Uber's ambitions to deploy autonomous vehicles, a number of its engineers are looking for other opportunities. The company said it welcomed the court's decision and looked forward "to holding Uber responsible in court for its misconduct".
"It is unfortunate that Waymo will be permitted to avoid abiding by the arbitration promise it requires its employees to make".
"These accusations are unwarranted", Alsup wrote, pointing out that Waymo is already arbitrating claims against Levandowski for poaching its employees for Otto.