Apple Drags Startup to Court for Stealing Trade Secrets through Former Employees

BY Chandraveer Mathur

Published 2 May 2022

Apple Unsplash

Apple has filed a lawsuit against a self-professed “start-up in stealth mode” called Rivos. The company allegedly hired several senior Apple staffers but didn’t stop at that. The iPhone maker claims Rivos also coordinated with its employees to steal the company’s trade secrets.

Much isn’t known about Rivos, except that it is a start-up that primarily hires silicon design engineers. According to a Reuters report, Apple’s lawsuit filed last Friday alleges that the start-up intends to design and build chips to rival the A-series and M-series chips. However, the Mac maker also believes Rivos uses data it stole from the company to accomplish its goals.

“Starting in June 2021, Rivos began a coordinated campaign to target Apple employees with access to Apple proprietary and trade secret information about Apple’s SoC designs.”

According to the legal filing, at least two former Apple engineers (Wen “Ricky” Shih-Chieh and Bhasi Kaithamana) stole several gigabytes of “SoC specifications and design files” from work computers. The duo allegedly used AirDrop, USB drives, cloud backups, and Time Machine backups to transfer the confidential data onto other computers for their personal use. The Cupertino-based company alleges that the staffers who stole the data also tried to wipe their devices to destroy evidence of their actions.

“Between July 26, 2021, and July 29, 2021, Mr. Wen transferred approximately 390 gigabytes from his Apple-issued computer to a personal external hard drive. Among the data transferred are confidential Apple documents describing Apple trade secrets, including aspects of the microarchitecture for Apple’s past, current, and unreleased SoCs.”

“Some used multiple USB storage drives to offload material to personal devices, accessed Apple’s most proprietary specifications stored within collaboration applications, and used AirDrop to transfer files to personal devices. Others saved voluminous presentations on existing and unreleased Apple SoCs—marked Apple Proprietary and Confidential—to their personal cloud storage drives. One even made a full Time Machine backup of his entire Apple device onto a personal external drive.”

Apple says it sent Rivos a letter detailing confidentiality agreements that bound the former engineers before initiating legal proceedings. However, the start-up did not respond to the letter.

Apple has sought a jury trial and an injunction against its former employees that Rivos poached, so they don’t continue leaking sensitive data. The company also demands compensation for the losses stemming from the misappropriation of data. Additionally, Apple says Rivos should pay it “a reasonable royalty rate.”

[Via Reuters]