In July, Apple sued OpenAI and said, roughly: you hired our hardware people, and they took our secrets with them. On Wednesday, a few hours before a court hearing in that case, OpenAI filed papers that say, roughly: funny you should mention that.
According to the filing, as Business Insider reported, the story goes like this. An unnamed engineer spent six months at Apple, then joined OpenAI, then went back to Apple. On his last day at OpenAI in June, he sent himself “a hundred highly confidential files” (other accounts of the filing say more than 100) about at least one device OpenAI hasn’t released yet. OpenAI says the files covered “highly confidential engineering and manufacturing data about the device(s)” as well as “supplier information and project files, standards for cosmetic finishes, and reports regarding coating and sealing of hardware components.” OpenAI also says it understands that the engineer later briefed “Apple’s senior leadership, including Apple’s vice president of operations in Asia” on OpenAI’s product plans.
That presentation appears to have happened months ago—and now, armed with that information, Apple is making a new push into AI-enabled products.
That is from OpenAI’s lawyers, and the timing helps them. On Tuesday Apple announced HomeView, a $299 display that runs on Siri AI and is the company’s first smart home device. It came alongside a batch of smart home products Apple built with LG Electronics and Schneider Electric, and it ships on November 13. OpenAI’s filing linked to Apple’s new devices, HomeView included, in a footnote. Note what the footnote doesn’t do: it doesn’t claim HomeView contains anything of OpenAI’s. It just leaves the link sitting there and lets the reader draw the line.
The filing doesn’t really make a claim at all. It says OpenAI is worried:
OpenAI is very concerned that its trade secret and confidential information is now circulating inside Apple, where Apple engineers can shape Apple’s upcoming products based on OpenAI’s confidential and innovative work. OpenAI has raised these issues directly with Apple, but to date, Apple has not provided OpenAI with the requested assurances that Apple is not in possession of, and has not used, OpenAI’s trade secret and confidential information.
That passage was reproduced by MacRumors. As for what OpenAI actually wants, it asked the court for permission to investigate and, if the investigation turns something up, to file counterclaims. Apple told Reuters it had found no evidence to support OpenAI’s claims and that it has policies meant to keep new hires from using confidential information from their old employers. Apple also said the filing is an attempt to distract from its own claims that former Apple employees took its trade secrets to OpenAI.
Meanwhile, in the actual lawsuit
The original case is Apple’s, and so far this week has gone Apple’s way. Apple sued OpenAI, two people who used to work for it, Chang Liu and Tang Tan, and io Products, according to Bloomberg Law. It accuses them of “a coordinated pattern of misconduct at an institutional level” to get hold of Apple’s hardware secrets. OpenAI called it a “careless, aggressive and oddly personal” lawsuit and said it does not “have, nor want, any of their trade secrets” because it is “much more interested in building innovative products and technologies that push the frontier.”
On Tuesday, US District Judge Edward Davila partly granted Apple’s request for expedited discovery. OpenAI has up to two weeks to hand over forensic evidence and the materials it used when interviewing former Apple employees. Once Apple has those, Liu, Tan and Alyssa Peng, a former Apple colleague of Liu’s, will sit for depositions. At Wednesday’s hearing, Davila said he was “highly likely” to grant a preliminary injunction barring OpenAI from using the trade secrets Apple says were stolen. Bloomberg said that would “mark a potential setback” for OpenAI’s hardware plans.
So OpenAI made a deal with itself. According to Bloomberg, as relayed by 9to5Mac, OpenAI voluntarily agreed, while the case goes on, “not to use trade secrets that Apple Inc. claims were stolen” and to collect forensic images of devices belonging to 14 employees “that may contain Apple’s confidential information.” The judge can enforce the promise. Davila also pushed back on Apple asking to inspect every device and repository that might hold its secrets, calling it a “huge ask.” Apple’s lawyer, John M. Desmarais, said Apple would narrow the inspection, because OpenAI doesn’t have “400 bad apples” but “a few bad apples and know who they are.”
The promise is cheap for OpenAI, in a sense. Its whole position is that it doesn’t have Apple’s secrets and doesn’t want them, and agreeing not to use things you say you don’t want costs you nothing. The real cost is everything else: depositions, forensic imaging and lawyers going through your interview notes to see whether candidates were asked about prototypes they shouldn’t have discussed.
The mirror
This is why the counter-filing makes sense, whatever you think of its merits. A trade-secrets case between two companies competing for the same hardware engineers is never one-way, because the engineers aren’t. Here’s a hypothetical: you design device enclosures in Cupertino. The things you know about coatings, seals and suppliers sit in your head whoever is paying you, and the industry’s answer is a set of policies telling you not to use what you know. Apple says it has those policies. So, presumably, does OpenAI. Each company is now arguing that the other’s policies didn’t work.
OpenAI’s engineer is the perfect example of the problem: six months at Apple, then OpenAI, then back to Apple. If OpenAI’s account holds up, he has taken part in both sides of the dispute. And if Apple gets to read OpenAI’s hiring files, OpenAI would very much like to read Apple’s HomeView files. Discovery is expensive and embarrassing, and a counterclaim means both companies have to sit through it. That tends to make people more open to settling.
Anyway, Apple’s position is that its trade secrets walked out the door to OpenAI. OpenAI’s position is that its trade secrets walked out the door to Apple. Both may be right, and it may have been the same few doors.