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OpenAI promises not to use trade secrets Apple claims were stolen, as lawsuits see both sides accuse each other of st...
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On Wednesday local time, at a hearing held in the U.S. District Court for the Northern District of California in San Jose, OpenAI voluntarily promised not to use, during the litigation of the legal dispute between the parties, trade secrets that Apple alleges were stolen by employees who left the company. Presiding Judge Edward Davila said he was "very likely" to side with Apple and issue an injunction against OpenAI. The agreement largely satisfied Apple's core demand, namely ensuring that OpenAI must not use Apple's proprietary information in its own technology development.
The agreement also requires OpenAI to collect forensic images from the devices of 14 employees that may contain Apple confidential information. But Davila also said he would not fully grant Apple's requests, saying Apple's demand for a forensic investigation of all devices and repositories containing Apple trade secrets was "excessive." Apple lawyer John M. DeMarrais responded that the scope of the investigation would be limited to a small number of employees who moved to OpenAI, "not four hundred problematic employees, just a few."
This dispute has lasted for months. Although Apple and OpenAI reached a partnership two years ago to integrate ChatGPT into Apple software, hundreds of Apple employees defected to OpenAI, causing tensions to erupt. In a lawsuit filed in July, Apple alleged that OpenAI, its hardware chief, and a former Apple iPhone hardware engineer conspired to obtain confidential information related to product design, manufacturing, component technology, testing methods, and supply chains from former Apple employees, and used that information to advance its own plans to enter the consumer hardware market.
OpenAI firmly denies the allegations, arguing that Apple sued in order to restrict employees from moving to competitors, and is also trying to characterize "ordinary job interviews as acts of trade secret theft." In court filings submitted in October, the company said OpenAI is developing an entirely new line of devices for the AI era and has "no need and no intention to obtain Apple's trade secrets."
Hours before the hearing began, OpenAI counter-accused Apple. Its court filing said that a former employee who first left Apple for OpenAI and later returned to Apple sent "hundreds of highly confidential documents" about at least one unreleased OpenAI device to a personal account, including images of unreleased hardware, engineering and manufacturing data, and supplier information. The employee also showed OpenAI's product plans to Apple executives. OpenAI asked the judge for time to investigate whether Apple possesses or uses this information, and, if so, to allow it to file a counterclaim.
Apple responded that the company already has systems in place to prevent the use of confidential information from former employers, has found no evidence supporting OpenAI's allegations, and accused the AI company of trying to divert attention from the "abundant evidence" that its employees took Apple product materials.
For OpenAI, the agreement allowed it to avoid a direct loss in its first substantive courtroom confrontation with Apple. The startup led by Sam Altman is aiming for a $1.4 trillion valuation and preparing for an IPO, and the lawsuit casts a shadow over its prospects. Bloomberg reported that its first consumer hardware product is a ring-shaped smart speaker priced at more than $300, which the company internally believes is unlike anything Apple is about to launch.
The case number is Apple v. Liu (5:26-cv-07078), heard by the U.S. District Court for the Northern District of California (San Jose). The investigation into the scope of discovery and potential counterclaims will continue.
