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How a Deal to Bring Autonomous Vehicles to Walt Disney World Blew Up

Illustration: Sam Woolley (GMG)
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Walt Disney once mused that it’s “kind of fun to do the impossible,” so it’s likely the animation mogul would’ve been impressed by last year’s reports that fully-autonomous vehicles could soon be shuttling passengers around the amusement park in Florida that bears his name. Driverless cars are, after all, one of the most challenging—impossible, perhaps—technological tasks of our time. But the Disney project has fallen into disarray, Jalopnik found, after the companies aiming to bring the idea to fruition ended up in court accusing one another of stealing blueprints for the crucial technology needed to make driverless cars work.

And more than just an interesting look at how a new way to shuffle around the Magic Kingdom fell through, it’s an example of just how contentious this technology is right now.

With billions of dollars at stake, tech companies and automakers have taken an aggressive, hyper-protective approach toward their plans for deploying self-driving cars to the public. The approach has routinely materialized in the form of explosive lawsuits carrying accusations of trade secrets theft.

This year alone, Uber settled a series of trade secrets theft claims brought by Google’s self-driving car unit, Waymo, for $245 million; electric car startup Faraday Future sued a former exec for allegedly leaving his job with sensitive documents; and an Apple engineer wound up indicted by the feds after investigators found that he’d attempted to download a circuit board for a self-driving car to a personal laptop.

There wasn’t, though, a whiff of concern surrounding an effort to launch driverless cars at Walt Disney World, when the Los Angeles Times first reported on the project in April 2017. Disney, the Times said at the time, was in “late-stage” negotiations with at least two manufacturers to launch driverless shuttles that “could cart passengers through parking lots and around its theme parks.” If a pilot program went smoothly, the driverless shuttles could launch within months.

But the project was apparently doomed before the Times even caught wind of it, Jalopnik found.

The fallout appears to stem from a disagreement between Meridian Autonomous and Phoenix Wings, two relatively unknown companies in the industry that inked a temporary deal in 2016 to bring autonomous shuttles to Walt Disney World, according to court records obtained by Jalopnik.

Phoenix has a founder with a long history in working on self-driving tech, while Meridian appears to have been itching to break into the field as a financial backer. (It’s unclear if Disney had other discussions ongoing at the same time with other self-driving tech companies, but no shuttles have launched since the Times broke the story about the project.)

Court records show the relationship between Meridian and Phoenix deteriorated in the days leading up to a planned demo in April 2017 at the Florida entertainment resort, and eventually resulted in litigation over alleged trade secrets theft that remains ongoing today.

The previously unreported legal battle also sheds new light on Disney’s ambitions for utilizing self-driving car technology, which included deploying “up to 100" vehicles at the amusement park in Orlando.

Meridian, in a federal lawsuit filed last fall, described the project as an extremely lucrative opportunity for the company, saying it believed a successful Disney demo would’ve developed into $595 million of annual sales by 2021, from selling shuttles and licensing the technology.

From Meridian’s point-of-view, Phoenix Wings “orchestrated a scam” and stole intellectual property to score multi-million dollar business deals at the company’s expense. The company is seeking $70 million in damages.

Phoenix Wings sees things differently. The company alleges in a November 2017 suit of its own that Meridian concocted a “classic bait-and-switch scheme.” Meridian had a preliminary offer on the table to acquire Phoenix in 2016, but when the former sent the latter a final deal the following spring, Phoenix declined, claiming in its suit that it carried “substantially different” terms from Meridian’s original deal.

“This case is about the attempted hijacking of valuable intellectual property related to self-driving [autonomous] transportation technology by an opportunist and the companies that he controls,” Phoenix said in its lawsuit, “and [Meridian’s] continuing efforts to try to wrongfully ‘cash-in’ on the intellectual property even after their larger scheme to completely hijack the technology failed.”

Disney reportedly still hopes to deploy autonomous shuttles in some fashion, but the company hasn’t confirmed if and when that will happen. A Disney spokesperson didn’t respond to repeated requests for comment. Neither did attorneys representing Meridian, Phoenix Wings, and Coast Autonomous, which, according to court records, wound up acquiring Phoenix’s autonomous vehicle intellectual property. Neither did the companies themselves.

Walt Disney World
Walt Disney World
Photo: Jacqueline Nell (Getty)

‘Disney Wanted Up to 100 Vehicles’

There’s one thing both Meridian and Phoenix agree on: In November 2015, both sides began discussions on working together to develop autonomous vehicles.

Phoenix is led by Pierre Lefevre, an engineer with a long-running history with autonomous vehicles that dates to the 2007 DARPA Grand Challenge, the well-known competition for autonomous vehicles. (Anthony Levandowski, the former Google and Uber engineer whose alleged trade secrets theft sparked the major lawsuit between both companies, also made a name for himself through the DARPA Challenges.)

In court records, Phoenix describes Lefevre breathlessly as a “scientist and visionary.”

“He is the father of low speed autonomous transportation,” the company said in its lawsuit. “He has invented and developed technologies related to autonomous transportation for well over a decade.” As far back as 1995, the lawsuit notes, Lefevre led a team that built a Citroën Evasion capable of connecting to the internet and was personally delivered to Bill Gates.

Lefevre, in November 2015, linked up with Tharmalingam Satkunarajah, described in court records as CEO of Global Resources Management Consultancy, a New York City-based consulting firm. Satkunarajah, according to GRMC, has over three decades of experience working on highway and transportation systems and has a masters of science degree from City, University of London.

Lefevre had spent most of 2015 looking for financial backers to support the development of his autonomous driving tech, court records indicate, and that’s what it appears Satkunarajah brought to the table: money. (Satkunarajah later incorporated Meridian Autonomous as the name for the endeavor, court records show, with the intention of acquiring Phoenix and its intellectual property.)

Talks between Lefevre’s team and Satkunarajah progressed over the intervening months, and in March 2016, Meridian and Phoenix entered into a deal to develop autonomous vehicles together. A month later, a term sheet—described it in court filings as “non-binding”—had been signed by both sides, along with a separate, Lefevre-connected LIDAR startup called Viametris. (Like Google/Uber’s Levandowski, Lefevre has a penchant for starting a dizzying amount of startups, and, yes, Viametris is named in yet another lawsuit—this one filed by GRMC—that remains pending.)

It’s here that both sides depart on what transpired. But what’s clear from court records is that Meridian and Phoenix saw an opportunity to generate significant revenue from the project.

Meridian claims it dumped more than $1 million into personnel costs and secured a private facility in Florida to house the ongoing project helmed by Lefevre and his crew. That included three electric vehicles from third-party manufacturers to be outfitted with the Meridian-designed autonomous system, the Meridian complaint says.

From what Meridian outlines in its suit, the company seems to have believed it struck gold with Lefevre.

By June 2016, Meridian’s lawsuit says, Lefevre had already begun corresponding with Disney. A month later, Lefevre allegedly proposed partnering with Local Motors, makers of the Rally Fighter, to outfit the startup’s Olli shuttle with autonomous tech. (Local Motors is one of the two companies identified by the Los Angeles Times report as being involved with the Disney project. A spokesperson for the company declined to comment.)

With Disney in the picture, Lefevre and his associates led Meridian to believe it would generate more than a half-billion dollars worth of sales in just a few short years, Meridian’s suit claims.

By October 2016, Corey Clothier—at the time a Meridan employee, and a named defendant in Meridian’s suit—allegedly calculated the Disney World demonstration alone would generate $4 million of sales in 2017, before incrementally climbing to $595 million by 2021. A demo was planned for that same month, and Clothier reported that Disney wanted “up to 100 vehicles” from Meridian, the complaint says, for parking and other various operations.

It’s unclear whether the October demo at Disney occurred, but Meridian’s complaint says another demo involving an autonomous Local Motors’ Olli shuttle was scheduled for February 2017.

Meridian asserts it paid 4,000 euros that month for engineers to set up a server to use at the Disney demonstration, but the demo appears to have been delayed until that April.

The ‘Olli’ shuttle.
The ‘Olli’ shuttle.
Photo: Local Motors

‘A Classic Bait-and-Switch Scheme’

While Meridian argues that Lefevre and Clothier were essentially acting as employees of the company, Phoenix Wings argues that wasn’t the case at all. Phoenix says Lefevre and his cohort were acting as “independent” contractors, and it claims the reason everything fell apart was due to Meridian’s final offer to acquire the company.

Phoenix called it “a classic bait-and-switch scheme.”

“When [Meridian] presented its final offer to consummate a deal, the terms of the offer were substantially different from, and inferior to, the terms that [Meridian] previously presented to Lefevre and Phoenix Wings in the Non-Binding Term Sheet,” according to Phoenix’s complaint.

Phoenix claims that Meridian refused to renegotiate, and a deal never materialized.

So in March 2017, just weeks before the alleged demo at Walt Disney World, Lefevre and his colleagues abandoned the Meridian-financed Florida facility that housed its autonomous vehicle project.

After it became evident that no deal would materialize with Meridian, the Phoenix complaint says, Phoenix Wings struck a deal with Coast Autonomous, in which Coast would acquire all of Phoenix’s intellectual property. California records show Coast was incorporated on March 27. (Lefevre is listed on Coast’s website as its chief technical officer.)

Despite a lack of any substantive demonstration or evidence the shuttles even work, word of an autonomous vehicle shuttle deployment at Walt Disney World managed to trickle down to Los Angeles Times journalist Russ Mitchell, who reported on April 28, 2017 that “Walt Disney World in Florida appears poised to launch the highest-profile commercial deployment of driverless passenger vehicles to date.”

Citing unnamed sources who asked not be identified “to avoid offending Disney,” Mitchell reported that “the company plans a pilot program later this year to transport employees in the electric-drive robot vehicles,” Mitchell wrote. “If that goes well, they said, the shuttles would begin transporting park visitors sometime next year.”

Behind the scenes, however, Meridian and Coast Autonomous’s were already piecing together the early stages of a still-ongoing, ugly legal battle.

Coast Autonomous shuttle demo in Times Square in 2018
Coast Autonomous shuttle demo in Times Square in 2018
Screenshot: Coast Autonomous (YouTube)

Patent and Trade Secret Theft Accusations Fly

Three days after Mitchell’s story broke, Lefevre and Coast Autonomous sued Meridian in federal court, claiming that Meridan was utilizing stolen intellectual property.

“Plaintiffs’ counsel has asked for an explanation and proof of the intellectual contributions made by Defendants to the intellectual property of Phoenix Wings, Mr. Lefevre and/or Mr. Royere,” the suit claimed. “Defendants have refused to provide any such explanation or proof in response.”

But Meridian was building a case of its own. As Lefevre and his team cut ties from Meridian in March of 2017, Meridian alleges, his crew stole property from the Florida facility that it described as “critical software systems and hardware.” To date, Meridian claims, the property hasn’t been returned.

“The property removed included all of the demonstration shuttles, including the shuttle intended for use at the Disney Demonstration,” Meridian says in the complaint.

Phoenix describes Meridian’s characterization as misleading in its suit. After Lefevre and his team departed the Florida facility, Phoenix says in its complaint, they found they had a “number of microprocessors that had been purchased from a third party using a trade account in Meridian’s name.” The microprocessors were eventually returned at Phoenix’s expense, according to the Phoenix complaint.

But Meridian also asserts that Phoenix made off with intellectual property that, according to Meridian, doesn’t belong to it. In June 2017, Lefevre formed yet another company named eMAPscan (also a named defendant in the case), “for the purpose of pursing his illegal use of [Meridian’s] trade secrets, property, and intellectual property,” the complaint alleges. That includes an apparent computer that Meridian alleges has been used by Coast Autonomous, as well as a mobile mapping system that Coast is utilizing.

Coast Autonomous offer, of course, a different perspective in court pleadings. Lefevre allegedly met with Meridian and its CEO, Satkunarajah, during multiple meetings at which autonomous vehicle technology was discussed. Lefevre claims the information was confidential and says Satkunarajah had signed a non-disclosure agreement in order to discuss the tech.

According to Lefevre, once the deal to acquire Phoenix Wings fell through, Meridian asked him to “assign to Meridian the intellectual property” related to autonomous vehicles that he owned. That never happened, Lefevre asserts. Coast claims Meridian then filed patent applications using the allegedly stolen I.P., but no records with the U.S. Patent and Trademark Office could be immediately located.

Meridian, Phoenix goes on, “falsely advertise[s] on its website that Meridian presently provides autonomous transportation products and/or services that, on information and belief, Meridian does not have the ability to deliver.” The vehicles on Meridian’s website, Phoenix claims, also don’t exist, “as they are artist designs.”

The company claims at one point that it believes Satkunarajah doesn’t possess “even a rudimentary understanding of the basic concepts concerning autonomous transportation.”

Tampa officials ride in a Meridian-branded autonomous vehicle in 2016.
Tampa officials ride in a Meridian-branded autonomous vehicle in 2016.
Screenshot: City of Tampa (YouTube)

‘Damages of at Least $70 Million’

And so the shattered promise of autonomous shuttles at Disney World lies in limbo a thousand miles away in the U.S. District Court’s southern district of New York.

For Lefevre’s part, he and Coast Autonomous hope to push the case to arbitration, claiming that’s the proper venue for the case. Meridian says it belongs in federal court.

Meridian, meanwhile, portrays itself as having lost out on a golden opportunity. In one confidential document filed in federal court, the company laid out just how much it expected to make. Between 2017 and 2021, the company said, it planned to build a driverless 12-passenger shuttle, a four-passenger pod car (at $120,000 each), a delivery van, and a logistics flatbed.

Late last month U.S. District Judge Vernon Broderick dismissed several counts in Meridian’s complaint against Lefevre and Phoenix Wings, and asked both sides to provide additional arguments on whether the case belongs in arbitration and out of the public eye.

A decision could be handed down at any time.