Google's driverless car division, Waymo LLC, is getting its holy grail of discovery.

The U.S. Court of Appeals for the Federal Circuit on Wednesday rejected Anthony Levandowski's attempt to block production of a due diligence report in which he may or may not have acknowledged illegally downloading driverless car technology files from Google before leaving the company. Levandowski formed his own autonomous vehicle companies in 2016 and sold one of them to Uber for $680 million.

Diego M. Radzinschi / The National Law Journal

“Mr. Levandowski fails to articulate any persuasive reasons why disclosure of the Stroz report should be barred in this civil litigation, for the possibility of admissions against his interest is a valid function of civil discovery,” Judge Evan Wallach wrote for a unanimous panel in Waymo v. Uber Technologies. Judges Pauline Newman and Kara Stoll concurred.

Levandowski, who was fired from Uber earlier this year after asserting his Fifth Amendment rights, had argued that his communications with investigative firm Stroz Friedberg were privileged under the common interest doctrine because he and Uber had anticipated IP suits by Google when arranging the sale of Ottomotto LLC.

In a separate ruling authored by Newman, the court also declined to order the case into binding arbitration.

The upshot of the rulings is that Waymo will now receive a potentially explosive report potentially linking Levandowski's conduct to Uber, which has maintained that it never acquired or used any Waymo trade secrets. But Waymo has little time to use the report, as trial is scheduled to begin Oct. 10.

Michael Brophy, a partner at Withersworldwide whose practice includes IP litigation, said Waymo will have an interesting decision to make, since discovery is closed and the report is likely to point toward new chains of inquiry. “I imagine the plaintiffs are not going to want to push off the trial date,” he said. But “nonetheless, they would have pretty good grounds” for postponement if necessary to take more discovery.

A spokesman for Waymo said the company and its lawyers are “still reviewing materials received late in the discovery process and we look forward to reviewing the Stroz report and related materials.” Even before Wednesday, the company has already “found significant and direct evidence that Uber is using stolen Waymo trade secrets in its technology,” he said.

An Uber spokesman noted that the company had not joined Levandowski's appeal on the Stroz report. “We are ready to finally disclose it to Waymo today,” he said. “While Waymo has obtained over 238,000 pages of production documents from Uber and conducted a dozen inspections over 61 hours of our facilities, source code, documents, and engineers' computers, there's still no evidence that any files have come to Uber, let alone that they're being used.”

U.S. District Judge William Alsup of the Northern District of California, who's presiding over the case in San Francisco, entered a cryptic order Thursday that called for a sealed hearing Sept. 18 to discuss “recent developments.” No further detail was provided.

How to handle the Stroz report will likely be high on the list. It's also worth noting the parties have held a series of settlement conferences with U.S. Magistrate Judge Elizabeth Laporte over the summer. Discussions in April and July were under court order, but the parties elected to continue them on Aug. 9 and Sept. 6. No deal was reached at the Sept. 6 hearing, according to the court's docket.

Uber's former CEO Travis Kalanick, who once said Uber had to be first in autonomous vehicle technology or “it is no longer a thing,” stepped down as CEO in June. Dara Khosrowshahi, previously of Expedia Inc., took over Sept. 5.

Given the new management and the possibly damaging revelations in the Stroz report, it wouldn't be surprising if the calculus for Uber has started tilting more toward settlement, Brophy said.

“Particularly if the new leadership is less enamored of being a leader in this technology,” Brophy said. “Why fight and spend all this money if this is a technology you're not going to use?”