Apple and OpenAI Head to Court Over Alleged Hardware Trade Secret Theft

Apple Inc. and OpenAI are appearing before US District Judge Edward Davila in San Jose on Wednesday for the first major hearing in Apple's July lawsuit alleging a scheme to steal proprietary hardware information. The court will hear arguments on two competing motions: Apple's request for a preliminary injunction barring OpenAI from using allegedly stolen trade secrets, and OpenAI's demand to dismiss the lawsuit entirely. On Tuesday, Judge Davila ordered OpenAI to expedite turning over documents regarding the alleged theft of trade secrets to advance forthcoming consumer hardware products. The legal battle follows the defection of hundreds of Apple employees to OpenAI as the startup targets a $1.4T valuation and prepares to go public. Bloomberg News previously reported that OpenAI's first consumer hardware product will be a doughnut-shaped smart speaker priced at more than $300. Apple alleges that OpenAI, its hardware chief, and former iPhone hardware engineer Chang Liu conspired to extract confidential details on product design, component technologies, and supply chains. Apple claims OpenAI leaders instructed job candidates to bring prototypes and design artifacts to interviews for "show and tell" sessions, and alleges Liu exploited an authentication flaw to download confidential files from Apple's network storage. OpenAI denies the allegations, arguing in court filings that Apple failed to identify specific stolen trade secrets and is attempting to restrain employees from joining a competitor. OpenAI also contends the dispute stems from Apple's own security and offboarding weaknesses, alleging Apple encouraged staff to use personal iCloud accounts for work and continued messaging Liu for technical help after he joined OpenAI in January. "OpenAI is developing a new family of devices designed for the AI era. OpenAI has no need or desire for Apple’s trade secrets." — OpenAI October court filing.