Copyright infringement

Apple sues chip startup Rivos for alleged trade secret theft

Apple has sued a startup company accused of stealing business secrets to build a competitive line-up. Company filed a complaint over the weekend in California, the nomination of Santa Clara based in Rivos as well as two former Apple employees, Bhasi Kaithamana and Ricky Wen. It alleges the company conducted a “coordinated campaign” to attract Apple employees and encourage them to copy confidential documents before leaving, violating their contract with Apple.

The case comes as one of the world’s biggest technology companies opposes the new rivalry, in which Apple claims it has unfairly made a profit by hunting down dozens of its employees to gain internal files.

Rivos was established May 2021 and has been working undercover for months, hiring from a number of large technology companies. Apple says it includes more than 40 of its engineers, many of whom were familiar with Apple’s system-on-a-chip (SoC) designs. But in addition to simply having general knowledge of SoCs such as M1 and A15, the lawsuit alleges Rivos encouraged employees to copy work-related documents before leaving.

“Rivos has launched a coordinated campaign targeting Apple employees to access Apple’s proprietary and business information on Apple’s SoC designs,” she said, hoping to reap an unfair advantage. Rivos did not respond to a request for comment.

Kaithamana and Wen, the special staff named Suits, have both been longtime Apple engineers. Kaithamana has been working for the company for almost eight years and Wen for almost 14 years. Both have signed an intellectual property agreement (or IPA) that prohibits the disclosure of ownership information. The complaint alleges that prior to his release in August 2021, Kaithamana had copied a series of sheets, displays, and text files to an external USB drive under the name “APPLE_WORK_DOCS.” Wen was also accused of entering files related to Apple’s trade secrets – including “files related to Apple’s undisclosed SoC designs” – and then making a copy of the hard drive provided by his company before exporting.

“The sheer volume of information taken, the sensitive nature of that information, and the fact that these employees are now performing the same duties for a competitor constantly gaining some of Apple’s most valuable business secrets,” goes Apple for a few other things, ”the suit says. Apple is seeking financial compensation and an order requiring Rivos to return any proprietary information.

Technology companies have stepped up their efforts to crack down on trade secrets in recent years. Congress adopted the 2016 Defend Trade Secrets Act (DTSA), which in many cases moved from state to federal court. One of the most notable cases involved former Google and Waymo CEO Anthony Levandowski, who was sentenced to 18 months in prison for violating ownership of a new company that was later sold to Uber. (Morrison & Foerster, the legal firm currently representing Apple, represented Uber in the case.)

Sharon Sandeen, principal of Mitchell Hamline School of the Institute’s Audit Act, says Apple’s case would have happened in the same way or without DTSA. Sandeen was a criticism of the law before it is passed, removing the clauses as part of the takeover of corporate assets will be easier – a rule that says the latest version of the DTSA has been relaxed and seldom applied.

“There are not many cases that have led to the treatment of civil anesthesia, and those that have not been very successful,” Sandeen said. Instead, she said, federal courts are sometimes more complex in their interpretation of the law than state courts – leading to a narrowing of trade secrets cases.

Confidential business cases sometimes involve serious claims, such as a case has now been resolved accusing Meta chief Mark Zuckerberg of stealing Facebook ideas from Cameron and Tyler Winklevoss. In this case, Apple can point out what it describes as a copy of a large document as well as a visible attempt to erase the copy evidence after the fact. But keeping documents from private companies is not a secret trade-off, although it can be a breach of employee contracts. Apple has to prove that the information was confidential, that it had financial value, and that Apple has made reasonable efforts to stop it from becoming public.

That could involve focusing on claims about unreleased chips and the specific price of Apple’s hand-held chip building – which Apple has accused of being as secretive as Rivos’ design. using. That makes the case stronger than claiming everything related to Apple chips is a protected secret. “They are doing a good job of pointing out the high level of what they are claiming trade secrets,” Sandeen said.

But Sandeen also maintains that large companies such as Apple and Google can use trade secrets to undermine competitors, waiting until there is a clear risk that could arise and then file a lawsuit. “What surprised me both Waymo v. Uber In this case there was a significant delay between when the staff left and when the case was filed, she said. Apple and other Big Tech companies have experienced an increase in reliability scrutiny over the past few years – although Apple’s controversies have mostly involved the local system of the app, not the hardware components.

Apple’s lawsuit, meanwhile, alleges it had already informed Rivos of the theft in a letter, and it was not heard again. “If Apple does not act to protect sensitive privacy right now, Apple could lose its trade secret status altogether,” she said. “That result is unsustainable.”