For Uber, its intellectual property theft tug-o-war against Waymo might be a losing battle. William Alsup, the U.S. judge in the high-stakes case, has ruled that the ride-hailing service can't tell the jury a key argument in its defense against the lawsuit.

That's certainly a significant setback for Uber's defense. Waymo, which Google owns, alleges that Uber's Anthony Levandowski stole 14,000 files from the company's autonomous driving technology unit before resigning. When Uber bought Levandowski's startup later on, those files were allegedly used in the development of Uber's own self-driving tech.

However, as Recode reports, Uber has prepared a different story: Levandowski downloaded those files as a way to secure his bonus payment from Google. Simply put, Uber admits to downloading the files, but under a different motivation.

I Needed To Ensure My Bonus: Levandowski

Alsup ruled that Uber may not present such a narrative to the jury since Levandowski revealed his intention to former Uber CEO Travis Kalanick in a conversation with Angela Padilla, the company's assistant general counsel. This means the conversation was privileged.

Uber remains hopeful in spite of the potential setback.

"The fact remains, and will be demonstrated at trial, that none of those files came to Uber," said an Uber spokesperson.

Uber has argued that Padilla wasn't providing Levandowski legal advice, hence, their conversation doesn't fall within privileged communications. Still, Alsup isn't buying the company's argument.

Alsup said Uber includes lawyers in meetings to effectively render them as privileged communications — and that Uber uses it to its advantage under claims of privilege. This time, however, Uber is now saying the lawyer present during such conversation wasn't acting in its capacity, so that it may reveal to the jury the contents of those meetings.

Google, meanwhile, has rejected Levandowski's explanation, saying that it had already paid the engineer his bonus even before he downloaded the files. Waymo calls Levandowski's reasoning "entirely made-up."

Uber vs. Waymo: Who's Winning?

At present, the case certainly seems leaning toward Waymo's favor. Levandowski hasn't been entirely consistent in his narrative. He had pleaded the Fifth on earlier occasions, but the judge later ruled he can't use such protections against self-incrimination to prevent Uber from turning over the documents. Levandowski was fired in May.

It's easy to imagine how important it is for Uber to win this case. A verdict that would favor Waymo will effectively blow Uber's broader plans to develop its self-driving tech, which is seen as the crucial next step in maintaining its ride-hailing business.

ⓒ 2021 All rights reserved. Do not reproduce without permission.