Companies grow wary of disappearing-message apps after Waymo-Uber trade secret case

14 February 2018 6:04pm
Golden Gate Bridge in Fog

12 February 2018. By Amy Miller.

Companies seeking guidance about how to prove trade secret theft in court may be disappointed that Waymo settled its case against Uber Technologies over self-driving car technology last week.

But companies have learned one key data security lesson from Waymo v. Uber: letting employees use disappearing, encrypted messages to discuss sensitive information might not be a good idea. Now, the companies are seeking advice from lawyers.

Disappearing-message apps have become increasingly common in the workplace, and courts have been wrestling with these new forms of electronic communications, including US District Judge William Alsup in San Francisco, who was overseeing Waymo’s trade secret case against Uber.

According to Waymo, intelligence teams at Uber were specifically tasked with gathering sensitive information about competitors, and then they used apps such as Wickr and Telegram to cover their tracks.

Wickr itself recommends "proactively" making its app part of corporate governance "in your information governance policy as part of your business practice and security posture," CEO Joel Wallenstrom said on Monday.

Former Uber employees also used disappearing messages to discuss trade secrets, Waymo claimed, saying that could explain why thousands of documents that were allegedly downloaded by a former engineer were never found. Waymo also introduced evidence and testimony to try to prove that more evidence than just text messages had disappeared.

Waymo asked Alsup to impose sanctions on Uber, but Alsup took a more moderate approach. Alsup ruled that Waymo can “explain gaps in Waymo’s proof that Uber misappropriated trade secrets” by asserting in court that Uber used apps such as Wickr. 

But evidence will not be permitted that "becomes cumulative, invites improper speculation, vilifies Uber without proving much else, or threatens to overwhelm the trial and distract from the merits of the case,” he said. Uber should be allowed to defend itself by referencing Waymo’s use of disappearing messages as well, Alsup said.

The arguments over so-called 'ephemeral' messaging have led some tech companies to question whether letting employees use such technologies is a good idea, lawyers say. Businesses may have good reasons for using the apps, but they can create headaches when a company is sued.

Companies aren’t obligated by law to keep every record of their digital communications. But when a company is sued, or thinks it will be sued, it is required to keep records of written communications, which makes the growing use of ephemeral messaging a problem.

Corporate communications aren’t just limited to email systems anymore, and there is so much information produced during discovery now that lawyers will often agree on a set of search terms to scan databases, and both sides will produce any files that turn up.

But if those terms are discussed on texts, message apps, or ephemeral chat services, they can evade review, lawyers say.

And after the issue of disappearing messages was raised in Waymo v. Uber, more companies are seeking advice on how to restructure their document retention strategy so that those communications can be taken into account — or even on whether to allow the use of such apps, lawyers say.

“Having companies become more sensitive to the data trails they leave in their past is a good thing,” says Eric Goldman, a professor at Santa Clara University School of Law.

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