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Apple sues start-up, claims it hired employees to steal chip secrets

Apple sues start-up, claims it hired employees to steal chip secrets

Apple has filed a lawsuit against a Santa Clara-based company called Rivos and two former Apple employees.

(Photo: Reuters) (Photo: Reuters)

Apple has filed a lawsuit against a start-up for “allegedly stealing trade secrets to build a competing chip lineup”. The lawsuit was filed late last week in California against a Santa Clara-based startup called Rivos, as well as against two former Apple employees - Bhasi Kaithamana and Ricky Wen.

Apple mentioned in the lawsuit that Rivos mounted a “coordinated campaign” to “attract Apple employees and encourage them to copy confidential documents before leaving, violating their contract with Apple”.

As The Verge points out, this pits Apple, one of the largest tech companies, against a “much newer rival” which has been accused of gaining an “unfair advantage” by poaching dozens of its employees “to get access to internal files”.

Founded in May last year, Rivos has reportedly been operating on “stealth mode” for months, hiring employees from many other major tech companies besides Apple. Apple alleged that these hirings included more than 40 of its engineers, “many of whom were familiar with Apple’s system-on-chip (SoC) designs”. The lawsuit also alleges that Rivos encouraged employees to “copy troves of work-related documents before leaving”. “Rivos began a coordinated campaign to target Apple employees with access to Apple proprietary and trade secret information about Apple’s SoC designs,” the lawsuit claims.

The two employees named in the suit, Kaithamana and Wen, have been Apple engineers for a while. Kaithamana has worked for Apple for eight years, while Ken has worked for almost 14. And both of them had signed an IPA (intellectual property agreement) that banned them disclosing “proprietary information”.

The lawsuit alleges that before Kaithamana left the company in August last year, a series of spreadsheets, presentations, and text files were copied onto an external USB drive under the name “APPLE_WORK_DOCS”. Wen “also allegedly accessed files related to Apple trade secrets — including “files related to Apple’s unreleased SoC designs” — and then made a copy of his company-issued computer’s hard drive just before he departed”.

“The sheer volume of information taken, the highly sensitive nature of that information, and the fact that these employees are now performing the same duties for a competitor with ongoing access to some of Apple’s most valuable trade secrets, leave Apple with few alternatives,” the lawsuit detailed.

The company has sought for monetary damages and an order “that would require Rivos to return any proprietary information”. The suit also mentions that Apple had previously informed Rivos of its theft in a letter, but did not hear back. “If Apple does not act to protect its most sensitive secrets now, Apple could lose trade secret status over them entirely. That outcome is untenable,” the lawsuit added.

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Published on: May 05, 2022, 5:23 PM IST
Posted by: Jhinuk Sen, May 05, 2022, 5:20 PM IST