Trade Secrets Theft: Blame Game Begins As OpenAI Accuses Apple Of Mishandling Employee Exits

OpenAI has rejected Apple’s allegations that the AI firm and two former employees misappropriated trade secrets, arguing that the iPhone maker has failed to demonstrate that any confidential information was actually taken.

OpenAI made the argument in a filing submitted late Monday in the US District Court in San Jose, California, as per Reuters.

"This dispute is a mess of Apple's own making, and it is trying to blame everyone else," OpenAI said in the filing.

Apple sued OpenAI and former employees Tang Tan and Chang Liu in July, alleging that they had taken trade secrets covering hardware design, manufacturing and supply-chain operations.

The dispute marks a significant deterioration in relations between the two companies. Apple and OpenAI had formed a partnership two years ago aimed at expanding ChatGPT’s reach through Apple products, while helping the iPhone maker strengthen its position in artificial intelligence.

The lawsuit came as OpenAI expands its push into consumer hardware. OpenAI has hired about 400 former Apple employees for its hardware initiative.

The AI company said California law permits employees to move between competing companies and argued that Apple was using the case to hinder a potential rival and discourage its staff from leaving, as per Reuters.

Apple had alleged that the hiring of its former employees formed part of an effort by OpenAI to gain access to proprietary information. It also said Tan and Liu accessed internal Apple files after leaving the company.

OpenAI disputed that account and pointed to Apple’s own handling of employee data. According to the filing cited by Reuters, the company encourages employees to use personal iCloud accounts to access work documents, creating difficulties in separating personal and corporate information when employees depart.

Former Employees Defend Their Actions

OpenAI also criticised Apple’s practice of immediately escorting departing employees from its premises. It argued that the process can leave insufficient time for workers to return devices, move files back to the company or complete handovers.

Liu said in the filing that any access to Apple documents after his departure was intended to help former colleagues find files or respond to questions about work he had previously handled. He said former Apple employees continued to contact him for assistance after he left, as per Reuters.

Tan, who worked at Apple for 24 years, said he returned Apple prototypes before leaving and retained only non-confidential materials, including an employee departure checklist that he said was not confidential.

"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," OpenAI said in the filing, as per Reuters.