OpenAI says Apple’s own security practices undermine its trade secrets case

OpenAI has filed a motion to dismiss Apple’s trade secrets lawsuit, arguing that Apple’s own security practices and offboarding procedures weaken its claim that the information in question qualifies as legally protected trade secrets. The filing, made public this week, shifts the focus from whether former Apple employees at OpenAI accessed confidential data to how Apple managed its own internal information security.

Background of the lawsuit

Apple’s complaint, filed in July, accuses OpenAI of orchestrating a scheme to obtain confidential hardware information from former Apple engineers. This week, Apple asked the court to expedite discovery, citing its internal investigation that suggests additional former employees may have participated in or witnessed the alleged theft of trade secrets.

OpenAI’s defense strategy

In its motion, OpenAI argues that Apple allowed employees to use personal iCloud accounts for work and failed to properly revoke access after they left the company. The filing includes text message records showing that an Apple manager remained logged into the personal iCloud account of defendant and former Apple engineer Chang Liu after his departure, using it to transfer files and later asking him for technical help on Apple projects.

OpenAI also accuses Apple of omitting the consequences of its own “inexplicable information-management practices” from the original complaint, suggesting that Apple’s failure to secure systems upon employee departures created confusion and unauthorized access that Apple now characterizes as theft.

Legal implications

While this may sound like a “the door was unlocked, so it wasn’t really stealing” defense, the argument aims to strengthen OpenAI’s position that former employees were simply assisting prior colleagues. It also supports the narrative that the information might not qualify as trade secrets if it wasn’t adequately secured.

OpenAI further argues that Apple hasn’t specified which trade secrets or confidential components were allegedly stolen, referring instead to “generic categories of the product-development process—such as component manufacturing, product testing, vendor and supplier relationships, and distribution channels.”

Competitive motives alleged

OpenAI’s filing posits that Apple is using the lawsuit to slow down a competitor innovating in AI-powered hardware, rather than focusing on its own product plans. “OpenAI has no use, need or desire for Apple’s trade secrets,” the motion argues. “OpenAI is building something entirely new and different from anything at Apple.”

The motion adds: “Apple might not like that… Apple should not be permitted to use a baseless and pretextual lawsuit to make up for its shortcomings in the market for talent and retaining its employees, and its failures to integrate AI into its products.”

Why this matters

This case highlights the increasing tensions between tech giants over talent and innovation, particularly in the competitive AI hardware space. The outcome could set precedents for how trade secrets are defined and protected in the tech industry, especially when employee mobility is high and security practices are scrutinized.

Conclusion

As the legal battle unfolds, the court will need to weigh Apple’s allegations of theft against OpenAI’s claims of lax security and pretextual litigation. The case underscores the complexities of intellectual property in the fast-moving tech sector, where the line between confidential information and general knowledge can blur.

FAQs

Q1: What is the core of OpenAI’s defense?
OpenAI argues that Apple’s own security practices, including allowing personal iCloud use and failing to revoke access, undermine its claim that the information constitutes protected trade secrets.

Q2: What did Apple allege in its original complaint?
Apple accused OpenAI of orchestrating a scheme to obtain confidential hardware information from former Apple engineers, with the complaint filed in July.

Q3: How might this case affect the tech industry?
The case could influence how trade secrets are defined in tech, especially regarding employee mobility and security practices, and may impact competition in AI hardware development.