Apple and OpenAI are facing a legal battle in the United States over allegations of stealing trade secrets related to the development of artificial intelligence devices. A hearing could determine the course of the case, either by maintaining potential restrictions on OpenAI throughout the litigation or by dismissing the lawsuit entirely.
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A federal judge in San Jose, California, is scheduled to consider competing motions filed by the two companies on Wednesday. Apple is seeking to prevent OpenAI from using any confidential information it allegedly obtained from the company, while OpenAI is asking for the lawsuit to be dismissed in its entirety.
On Tuesday, Apple secured partial approval of its request to expedite access to evidence and documents related to the case, while the court rejected another part of the request.
According to Bloomberg, Judge Edward Davila is overseeing the two motions in the first substantive hearing since Apple filed its lawsuit last July.
Dispute over trade secrets
Apple is seeking a court order requiring OpenAI to stop using any confidential information obtained from the company and barring it from seeking additional information.
OpenAI, meanwhile, argues that the lawsuit lacks a specific legal basis, maintaining that Apple has failed to identify particular trade secrets that were allegedly stolen and has instead referred to broad categories of device-related information.
The lawsuit also names two individuals in their personal capacities: Tang Tan, OpenAI’s head of hardware, and Zhang Liu, a former engineer on Apple’s iPhone team. Apple accuses them of involvement in coordinated efforts to obtain the company’s proprietary information.
The design firm io Products is also named in the lawsuit.
Court allows access to additional documents
On Tuesday, Judge Davila issued a ruling granting Apple early access to certain evidence, including forensic copies of data, checklists and interview scripts used when interviewing candidates coming from Apple, summaries of those interviews, and messages exchanged between Liu and a former colleague since January.
However, the judge rejected a request to expedite the production of research documents concerning metal finishes, power management and battery functions, leaving them subject to the standard discovery process.
According to 9to5Mac, the judge described Apple’s use of the category “information originating from Apple” in its request as overly broad and insufficiently defined.
OpenAI holds Apple’s systems partly responsible
OpenAI’s defense points to Apple’s internal information-security practices, noting that the company encouraged employees to use their personal iCloud accounts for work purposes.
It also argues that an authentication-system error allowed former engineer Zhang Liu to retain access to certain information after leaving the company.
In August, OpenAI told the court that Apple could not treat the foreseeable consequences of its internal policies as evidence of information theft.
Apple rejects that interpretation, maintaining that information stored on iCloud is not central to its allegations. Instead, the case concerns Liu’s alleged exploitation of an authentication flaw to access storage systems on the company’s network and download files.
New AI device at the center of the dispute
The legal dispute is linked to OpenAI’s plans to develop a new generation of devices designed for the AI era.
The company says it is working on a range of new devices, beginning with a ring-shaped smart speaker priced at more than $300, which is expected to launch in 2027.
Apple’s lawsuit links certain information about metal finishes to the exterior design of the anticipated device, making engineering details a key part of the dispute.
According to the report, the lawsuit has slowed work on the project since it was filed in July, as OpenAI prepares for a potential stock market listing and targets a valuation of $1.4 trillion.
Differences between US and European laws
The dispute also highlights differences in legal protections for trade secrets and the movement of employees between competing companies.
In California, non-compete agreements are generally unenforceable, requiring companies to prove that actual trade-secret theft occurred after an employee moved to another employer.
In Germany, however, restrictions on competition can be imposed for up to two years, provided the employer pays compensation amounting to at least 50% of the employee’s previous salary.
The significance of the case therefore extends beyond the future of OpenAI’s planned AI device to broader questions about the protection of confidential information and employees’ rights to move between technology companies, amid growing competition to develop the next generation of smart devices.
Source: Al-Ghad.