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Apple, OpenAI Clash Over Trade Secrets as New Evidence Emerges

OpenAI has rejected Apple’s trade secret theft allegations, blaming the dispute on Apple’s security and employee exit procedures. Apple claims former employees used confidential information at OpenAI and destroyed evidence as the companies compete in AI hardware

Written By : Kelvin Munene
Reviewed By : Manisha Sharma

OpenAI has rejected Apple’s claims that it benefited from stolen trade secrets as a legal fight between the two technology companies intensifies. Apple alleges that former employees took confidential information to OpenAI, while the ChatGPT maker argues that Apple’s own security and employee exit procedures caused much of the dispute.

Both companies filed new arguments on Monday, August 31. The filings offer sharply different accounts of how former Apple employees handled company information after joining OpenAI.

OpenAI Calls Apple Trade Secret Case Baseless

OpenAI asked the court to reject or limit Apple’s claims. It argued that the iPhone maker is using the lawsuit to restrict employee movement and slow a potential competitor in consumer hardware.

“This dispute is a mess of Apple’s own making,” OpenAI said in its filing.

The company also accused Apple of blaming former workers for keeping access to personal accounts that Apple had allowed them to use for work. OpenAI said Apple’s employee exit and data-security procedures contributed to the situation.

OpenAI also pointed to the more than 400 former Apple employees who now work at the AI company. It argued that Apple cannot treat employees’ decisions to join a competitor as unlawful.

Apple Claims Former Engineer Used Confidential Material

Apple, however, presented new allegations involving former employee Chang Liu, who joined OpenAI in January. The company claims forensic analysis of Liu’s former Apple-issued MacBook found evidence that he accessed confidential information after leaving.

According to Apple, Liu ‘not only downloaded a confidential Apple circuit schematic but also used it in his work’ at OpenAI. Apple also alleges that Liu used a tool at OpenAI with the same name as an internal Apple engineering application.

The company further claims Liu instructed an OpenAI colleague to destroy evidence after learning about Apple’s investigation. Apple described the laptop findings as ‘shocking evidence’ supporting its request for faster discovery.

OpenAI disputes Apple’s account. It says Liu accessed Apple documents only after former colleagues contacted him for help finding files they needed. The company also maintains that the documents were unrelated to Liu’s work at OpenAI.

Tang Tan Allegations Add to Apple-OpenAI Dispute

Apple’s lawsuit also names OpenAI chief hardware officer Tang Tan, another former Apple employee. Tan spent 24 years at Apple and held a senior role on its product-design team before leaving.

Apple alleges that Tan transferred confidential information before his departure. OpenAI denies that characterization. It says Tan emailed himself nonconfidential documents, personal notes and a manager checklist that was widely available inside Apple.

Apple also claims Tan encouraged prospective OpenAI employees to bring physical components to interviews. OpenAI says any components shown during interviews were old or publicly available and served only as engineering demonstrations.

Apple Seeks Court Restrictions on OpenAI Hardware Work

Apple is seeking a preliminary injunction that could restrict OpenAI from using technology or information allegedly taken from Apple while the lawsuit continues. It has also requested expedited discovery and monetary damages.

OpenAI has urged the court to reject the injunction or ‘significantly narrow’ its scope. It argues that broad restrictions could limit employees’ ability to move between competing technology companies.

The case comes as OpenAI expands into consumer hardware with former Apple design chief Jony Ive. OpenAI says its first planned hardware product will be ‘a new type of consumer device that differs materially from known Apple products.’

The dispute also marks a change in the relationship between Apple and OpenAI. The companies previously worked together to integrate ChatGPT into Apple services. They are now facing each other in federal court as both pursue competing AI and hardware products.

A federal judge is scheduled to hear arguments on Apple’s preliminary injunction request on October 1.

Also Read: OpenAI Ads Hit $1 Billion Run Rate as Company Prepares for Potential IPO

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