US District Judge Edward Davila is set to consider two big swings at once. Apple wants a preliminary injunction that would force OpenAI to stop using any confidential information it allegedly obtained and to halt efforts to gather more. OpenAI is asking the judge to dismiss the lawsuit outright.
A day earlier, Davila directed OpenAI to accelerate production of documents tied to the alleged trade secret misuse linked to forthcoming consumer hardware.
Apple's complaint targets OpenAI, OpenAI's head of hardware, and a former iPhone hardware engineer, saying they coordinated to extract proprietary insights from former Apple employees across product design, manufacturing, component technologies, testing, and supply chain operations. Apple says the information was used to "advance OpenAI's efforts to enter the consumer hardware market." Apple also alleges OpenAI used interviews with current and former Apple workers to solicit secret details, including asking candidates to bring prototypes and other "design artifacts" to "show and tell" sessions.
OpenAI flatly rejects the accusation, arguing Apple is trying to discourage departures to a rival and to turn "ordinary job interviews as acts of trade secret misappropriation." In an October filing, the company added, "OpenAI is developing a new family of devices designed for the AI era," and said it has "no need or desire for Apple's trade secrets."
Platform disputes decide which AI products reach consumers. Market Briefs covers that litigation free every weekday.
Hours before the hearing, OpenAI informed the court that a onetime staffer who left Apple for OpenAI and subsequently rejoined Apple forwarded "over a hundred highly confidential files" to personal accounts concerning at least one OpenAI product that has not yet been released. According to OpenAI, the trove contained pictures of hardware that has not been disclosed publicly, along with technical details for engineering and production plus records about suppliers. OpenAI also asserts the individual later showed product roadmaps for OpenAI to senior Apple executives. OpenAI asked for time to determine whether Apple holds or used any of the materials and, if so, to allow counterclaims.
OpenAI also says Apple's filing highlights Apple's own security and HR practices. OpenAI says Apple employees kept reaching into Liu's personal iCloud and asked him to find files and answer technical questions even after his departure, and it posted private message excerpts in August that it says show those interactions. Apple counters that whatever was in Liu's personal iCloud is "entirely separate" from its central claim that he later used an authentication flaw to get into Apple's network storage and retrieve confidential files.
This showdown comes even as a two-year partnership put ChatGPT into Apple software and after hundreds of Apple employees moved to OpenAI. The fight hangs over OpenAI as it pursues a $1.4 trillion valuation and prepares for an initial public offering. According to Bloomberg News, OpenAI's first consumer gadget might take the form of a doughnut-shaped smart speaker costing more than $300, described internally as an AI-focused device unlike anything Apple is expected to offer.
If Apple wins a preliminary injunction, it would remain in effect while the case plays out. Bottom line for your wallet: legal twists around a high-profile AI name and a potential blockbuster IPO can add uncertainty that shows up in headlines and investor sentiment, even if you are not trading the ticker.
Docket: Apple v. Liu, 5:26-cv-07078, US District Court, Northern District of California (San Jose Division).
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