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Apple Alleges Theft of Trade Secrets in New Suit

by Chris Brook on Thursday May 5, 2022

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The company claims a stealth startup has poached 40 of its former employees, who in turn have stolen designs on its tech.

In Silicon Valley, where a company's tech can make or break it, it's not a surprise to see organizations defend their trade secrets. That's especially the case when the company has spent billions of dollars on them over the past few years.

One of the world's big five tech giants, Apple, appears to be doing just that; it filed a lawsuit late last week alleging a new start up, still in stealth mode, has been poaching its employees and with them, some of the company's trade secrets on its computer chips.

In the suit, filed in the United State District Court of the Northern District of California and reported on by Reuters on Monday, Apple accused Rivos, a company based in nearby Mountain View, it claims is planning on marketing competing system-on-chip (SoC) designs, for stealing its proprietary and trade secret information.

While the term system on a chip (SoC) may sound foreign to some, it’s the term for chips that power devices; for Apple, think iPads, MacBooks, etc. Examples include the bionic A15 chip, a 64-bit ARM-based SoC that found its way into the company's iPhones beginning with iPhone 13 and its M1 chip, which began popping up in the MacBook Air in 2020 and the iPad Pro in 2021.

Apple claims the company made a point to hire Apple employees with access to information about these SoCs. After the workers accepted job offers at Rivos, it alleges the employees took "gigabytes of sensitive SoC specifications and design files," some using USB drives and collaboration apps to transfer files to their personal devices.

Some even used Apple's own AirDrop service to transfer files. Another ex-employee went as far as to make a full Time Machine backup of his entire Apple device onto a personal external drive.

While information on Rivos is scant - its website is pretty bare bones, outside of showing that its hiring employees in Mountain View, Austin, Portland, and Colorado - the suit claims the startup’s goal is to design a full stack computing solution based on SoCs that will compete with Apple.

Apple alleges that 40 ex-Apple employees have joined Rivos since June 2021. Among them, the company named two in particular, Bhasi Kaithamana and Ricky Wen, in its lawsuit. Both worked in CPU design engineering while at Apple and both signed a series of confidentiality agreements that prohibit them from disclosing confidential company information, during and after their employment at the company.

According to the suit, Apple is resolute in its stance that the defendants stole trade secret data. It claims it has proof: "Apple's forensic analysis of the Individual Defendants' computing devices has revealed that they took and retained Apple's proprietary and trade secret information when they departed Apple," it reads, adding that that the data was protected by the intellectual property agreement they signed.

The court filing suggests Wen may have been the most egregious with his alleged theft, reportedly transferring 390 gigabytes from his Apple-issued computer to a personal hard drive over the course of just a few days in July 2021. To follow that up, in August, he reportedly transferred "400 files associated with Apple SoC development projects" to his personal Google Drive.

As is the case with most trade secret lawsuits, Apple is asking the company to stop using its trade secrets, have its former employees return its property, and award it “exemplary damages.”

“Apple welcomes and values open competition and the innovation that can result. But that competition cannot be built on the back of trade secret theft,” the lawsuit reads.

It's business as usual for the company, which in the past has worked to combat alleged leaks to the press involving stolen trade secrets and the purported theft of self-driving car diagrams.

Tags:  IP theft

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