The Japan Times - Apple and OpenAI escalate legal battle over devices

Apple sued OpenAI last month in San Jose, California, accusing the AI company of orchestrating a campaign to steal the iPhone maker's trade secrets via former employees as it tries to develop its own consumer hardware device.

In a new court document filed Monday, Apple described OpenAI's actions as "repeated instances of deliberate theft."

"OpenAI should not be permitted to use Apple's secrets to gain an unjust head start in its hardware ambitions," the iPhone-maker says.

OpenAI hit back on Wednesday and called for the case to be permanently dismissed, which would bar Apple from filing another lawsuit on the same grounds.

"Apple built its reputation by paying close attention to the smallest details. This lawsuit does the opposite," OpenAI's lawyers say in their filing, which continues to describe Apple's complaint as "rotten to its core."

Federal judge Edward Davila will consider both requests at a hearing on October 1.

- Partners and rivals -

Meanwhile, the two companies remain partners, since ChatGPT has been integrated into Apple products since 2024.

"Apple should not be permitted to use a baseless and pretextual lawsuit to make up for its shortcomings in the market for talent and retaining its employees, and its failures to integrate AI into its products," OpenAI's lawyers say.

They invoke California laws that “encourage” employees to take new jobs – policies that are "credited with powering the tech revolution that has made companies based in this state the envy of the world."

More than 400 former Apple employees currently work at OpenAI, according to the initial complaint.

"The harm is happening now," Apple's lawyers say, and "every day that passes without an injunction allows OpenAI to embed their knowledge of Apple's stolen information into its hardware development efforts."

– Smart speaker –

To convince the judge of the urgency, Apple’s lawyers submitted a TechCrunch article describing leaked details about OpenAI’s highly anticipated first device: a screenless smart speaker designed in collaboration with LoveFrom, a studio founded by Jony Ive, Apple’s famed former head of design.

On Thursday, Bloomberg reported that the device would be circular like a donut, about the size of a hockey puck, and cost between $300 and $400, with a launch planned for 2027.

OpenAI has never confirmed these leaks.

"OpenAI has no use, need or desire for Apple's trade secrets," the creator of ChatGPT says in a court document, which continues that Apple hasn't named any specific products, such as an iPhone, that has allegedly been copied. "OpenAI is building something entirely new and different."

Apple, for its part, accuses OpenAI’s head of hardware Tang Tan, a former vice president of design at Apple, of using his knowledge of unreleased Apple products to extract information from job candidates.

OpenAI asked candidates to bring “prototypes” and design files to interviews for “show and tell” sessions, an American classroom exercise where students present objects to their classmates, Apple alleges.

In its response, OpenAI says it follows standard industry practices.

According to his lawyers, Tan "repeatedly instructed recruits and his team not to bring or disclose former employers' confidential information."

OpenAI also defends itself by accusing Apple of failing to properly protect its own data, claiming that the Cupertino company has "encouraged employees to use personal iCloud accounts for work, intermingling company and personal data, while failing to manage access cleanly across multiple Apple systems when employees departed."

The case comes at a sensitive time for OpenAI, which is worth a reported $852 billion as it works towards a potential IPO. The lab is also locked into a fierce competition with Anthropic, a rival AI lab in San Francisco that was founded by a group of former OpenAI employees.

Y.Hara--JT