OpenAI rejects Apple trade-secret allegations in employee dispute

OpenAI (NASDAQ:OAI) has denied allegations from Apple (NASDAQ:AAPL) that it misappropriated trade secrets through former Apple employees, arguing that the iPhone maker has not demonstrated that confidential information was taken.

“This dispute is a mess of Apple’s own making, and it is trying to blame everyone else,” OpenAI said in a filing late Monday in the U.S. District Court in San Jose, California.

Apple filed a lawsuit against OpenAI and former employees Tang Tan and Chang Liu in July, alleging the misappropriation of trade secrets involving hardware design, manufacturing and supply-chain operations as OpenAI develops consumer devices.

OpenAI disputes claims over employee hiring

OpenAI, led by CEO Sam Altman, contends that Apple is using the litigation to limit competition and discourage employees from leaving the company. This represents OpenAI’s position in the dispute and has not been established as fact.

Court filings from the companies state that OpenAI has recruited approximately 400 Apple employees for its hardware initiative.

OpenAI also cited California law allowing employees to move between competing companies.

The dispute follows a partnership announced between the companies two years earlier that was intended to expand ChatGPT’s availability and support Apple’s artificial intelligence capabilities.

Apple alleged in its original complaint that OpenAI’s recruitment of its employees formed part of a strategy to obtain information about a competitor. The company also alleged that Tan and Liu accessed internal Apple files after leaving their positions.

OpenAI raises questions over Apple document procedures

In Monday’s filing, OpenAI argued that Apple encourages employees to use personal iCloud accounts to access work-related documents and perform job functions. OpenAI claimed that this practice can make it difficult for departing employees to separate personal information from company materials.

OpenAI also argued that Apple’s practice of immediately escorting departing employees from its premises does not provide sufficient time to return company devices, transfer internal files or hand over responsibilities.

These statements form part of OpenAI’s defence against Apple’s allegations.

Liu said in the filing that any access to Apple documents following his departure was intended to assist former colleagues in locating files or answering work-related questions. He also said Apple employees repeatedly contacted him for assistance after he left the company.

Tan, who worked at Apple for 24 years, said he returned Apple prototypes before leaving and retained only materials that he described as non-confidential, including an employee departure checklist.

OpenAI challenges Apple’s claims over employee departures

OpenAI also disputed the broader argument that employees moving from Apple to a competing technology company could support allegations of unlawful conduct.

Employees “can leave a company like Apple that has struggled to adopt AI and move to an exciting startup that builds innovative products,” OpenAI wrote. “Apple may not like those choices. But it cannot claim those choices are unlawful, and it cannot use its own sloppy procedures to blame others for its own mess.”

Apple’s allegations remain subject to the ongoing legal proceedings, and the court has not established that OpenAI or the former employees misappropriated Apple trade secrets.

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