Apple has filed its response to OpenAI’s motion to dismiss the lawsuit in which it accuses two former employees, as well as OpenAI and io Products, of stealing its trade secrets. Here are the details.
A bit of context
A few days ago, OpenAI filed a motion to dismiss the lawsuit Apple brought against the company, io Products, Chang Liu, and Tang Tan, alleging trade secret theft.
In its request, OpenAI says Apple filed the lawsuit “without adequate investigation,” and goes on to present its version of the events that led to Apple’s lawsuit.
OpenAI structures its rebuttal around three main arguments: that Apple “has failed to demonstrate it owns a protectable trade secret,” that the company “has failed to allege conduct that plausibly supports a claim of misappropriation,” and that it “fails to plausibly allege any injury or ongoing harm.”
It claims, for instance, that contrary to Apple’s accusations, former Apple employee Chang Liu was consulted by former colleagues after leaving the company, rather than accessing Apple information without authorization, while former Apple VP Tang Tan retained Apple’s offboarding document to help ensure new hires complied with its security procedures.
The company also argues that Apple’s own information-management and offboarding practices were partly to blame, claiming that employees were encouraged to use personal iCloud accounts for work and that Apple failed to properly cut off access to company data after they left.
’Apple’s Complaint is about specific individuals taking specific Apple trade secrets in specific ways’
Today, Apple filed its response to OpenAI’s motion to dismiss the lawsuit, where it picks apart OpenAI’s counter-arguments, and says that “[s]imply put, Defendants do not grapple with the shocking allegations at the core of the Complaint. “
Apple argues that its original complaint “sufficiently identifies specific trade secrets that defendants misappropriated,” and cites previous cases where courts found similar levels of detail sufficient to let trade secret claims move forward.
Apple also says that OpenAI’s allegations that it didn’t do enough to protect its trade secrets “are likewise not credible,” adding that OpenAI “trivialize[s] Apple’s trade secrets as mere ‘supplier relationships’ and then question[s] whether all ‘supplier relationships’ are confidential.”
The company further argues that OpenAI is also misusing the motion-to-dismiss mechanism altogether. From the document:
Defendants’ arguments about the individual defendants ignore the legal standard on a motion to dismiss. Again and again, Defendants rely on attorney argument or extrinsic evidence, hypothesize about implausible explanations for a Defendant’s “innocent” misconduct, and ask the Court to draw inferences in their own favor. That is not how a motion to dismiss works. As long as Apple has alleged “enough facts to state a claim to relief that is plausible on its face,” Defendants’ disagreement on the merits is irrelevant.
In its response, Apple also directly addresses a heavily redacted exchange that OpenAI published on its website, a conversation in which a former colleague who still works at Apple contacted Chang Liu to clarify some information about Apple projects.
OpenAI argued that the conversation proved that Apple’s characterization of Liu’s post-departure access as theft was misleading, because Apple employees had themselves asked him for help retrieving information.
The Complaint does not allege that Mr. Liu answered his former manager’s questions or that Apple employees accessed his personal iCloud account; it alleges that after his departure, Mr. Liu exploited an authentication bug to “access Apple’s network storage”—a cloud-based file repository containing Apple’s confidential [materials],” celebrated the discovery (“LOL… so funny”), and then spent weeks downloading dozens of confidential files while developing hardware for OpenAl. A manager’s transition question is not authorization to raid Apple’s confidential repository-and Defendants cite nothing suggesting that anyone at Apple knew of or approved such conduct. At most, Exhibit A offers an innocent explanation for conduct the Complaint does not accuse, while ignoring the problematic conduct.
Apple goes on to more clearly defend its trade secrets theft allegations against Tang Tan, and against OpenAI’s “own independent conduct.” That includes countering OpenAI’s arguments that Tan had asked job candidates to bring parts anyone could buy for “show and tell” sessions, rather than confidential components:
Mr. Tan did not ask candidates to bring parts anyone can buy; he directed a then-Apple employee to bring ‘some parts [she] worked on’ such as ‘[b]atteries,’ ‘mlb’ (multi-layer or main logic boards), and ‘shields’—internal components from her confidential Apple work, for ‘show and tell’ before the OpenAI hardware team.”
No one needs “show and tell” for “consumer products” that are, as Defendants put it, “widely available and in the public domain.” Plus, hours before one interview with Mr. Tan, a candidate was screenshotting and downloading files about a highly confidential Apple project that Mr. Tan then probed during the interview. On a motion to dismiss, the reasonable inference from these allegations-that Mr. Tan solicited and obtained Apple’s confidential hardware information-belongs to Apple.
Apple closes out its response by “respectfully request[ing] that the Court deny Defendants’ Motion in its entirety.”
You can read Apple’s full response below:
Apple_Inc_v_Liu_et_al__candce-26-07078__0089.0Download
What’s your take on Apple’s response? Let us know in the comments.
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