Labor & Employment Law Daily Wrap Up, LITIGATION NEWS, TRENDS—OpenAI, former Apple employees move to dismiss misappropriation claims against them, (Aug 13, 2026)

By Thomas Long, J.D.

Defendants contend that Apple failed to identify protectable trade secrets or unlawful acts in its complaint alleging that OpenAI stole Apple secrets to help it develop hardware products.

OpenAI and two former high-level Apple employees accused of bringing Apple trade secrets to the artificial intelligence company have moved to dismiss the tech giant’s complaint, contending that Apple has failed to plausibly plead any of the elements of trade secret misappropriation under the Defend Trade Secrets Act. The defendants assert that the complaint fails to adequately describe Apple’s asserted trade secrets and that much of the information referred to in the complaint is publicly available and therefore not protected. They also argue that Apple’s allegations of unlawful conduct by all defendants are speculative and contain misleading and mischaracterized accounts of events surrounding the former employees’ departure from Apple (Apple Inc. v. Liu, No. 5:26-CV-07078-EJD (N.D. Cal. Aug. 5, 2026)).

Trade secrets dispute. Apple Inc. alleged that OpenAI and the former employees engaged in a complex and far-reaching “strategy to extract Apple’s confidential information” regarding computer hardware components and systems. OpenAI has recently taken steps to enter the hardware market, and Apple asserts that OpenAI has taken unlawful shortcuts to bring its first hardware products to market, including reliance on large-scale misappropriation of multiple categories of proprietary Apple information.

Employee defendants. Along with OpenAI, the defendants in Apple’s trade secrets suit are two former Apple employees: Chang Liu, who served as a senior system electrical engineer for Apple’s iPhone product line for at least part of his eight-year tenure there, and Tang Yew Tan, who worked at Apple for over 24 years and served as Vice President of Product Design for Apple’s iPhone and Apple Watch product lines.

Trade secrets. Among the asserted trade secrets detailed in Apple’s complaint are hardware engineering information such as circuit and system design specifications, component architecture, and power management innovations; proprietary product designs; product roadmaps, milestone schedules, and development timelines; AI and machine learning integration data developed for Apple’s hardware products; and proprietary coexistence and electromagnetic interference engineering data. Apple also asserts trade secret status for information relating to its manufacturing design, product design, and process engineering.

Alleged misappropriation. The complaint alleges that Liu and Tan were recruited, directed, and rewarded by OpenAI for “stealing Apple’s most sensitive information for a would-be competitor.” Liu allegedly failed to return at least one Apple-owned computer when he left the company. He allegedly accessed Apple’s network storage and downloaded dozens of confidential files from Apple’s network repository. As for Tan, Apple asserts that its former executive has unlawfully exploited Apple’s trade secrets and other confidential information in recruiting Apple employees for OpenAI, including the use of Apple’s internal information to solicit trade secrets from job candidates. Tan allegedly directed candidates to bring physical hardware components and product samples from their Apple work to their OpenAI interviews for “show and tell” sessions.

Motion to dismiss. The defendants argue that Apple has not adequately alleged any of the elements of its claims. “Its trade secret ownership allegations rely on sparse, conclusory statements that are generic categories of product development information—which Apple’s own assertions confirm are neither secret nor subject to reasonable measures to maintain secrecy,” the motion states. The defendants also contend that the allegations do not point to any wrongdoing by Liu or Tan, and do not plausibly allege that OpenAI actually acquired, used, or disclosed any Apple trade secrets.

Ownership of protectable information. Apple’s Complaint fails to sufficiently describe the information for which it claims trade secret protection, assert the defendants. “Apple alleges that its trade secrets encompass a laundry list of generic categories that could encompass any and all information relating to development of any hardware product,” the motion states. “Those are not trade secrets. And the invocation of those generic and non-specific categories does not help ascertain the boundaries of the information at-issue.”

The defendants also contend that Apple’s complaint itself indicates that the categories and examples are not secret and that Apple has not taken reasonable measures to maintain secrecy of them. They state that “the information Apple asserts as trade secret is readily ascertainable by proper means.” They argue that it is impossible to distinguish “what information within these categories it alleges to be trade secret and which it concedes has been disclosed.” In addition, even if the information described in the complaint were confidential, the defendants contend that the complaint fails to allege that these “purportedly co-developed technologies are owned by Apple.”

Acts of misappropriation. The defendants further argue that Apple’s complaint fails to allege conduct by any defendant that would plausibly support a claim for misappropriation. With respect to the allegations against Liu, the motion to dismiss asserts that any access and download of Apple information was requested and authorized by Apple itself. Apple allegedly failed to disable Liu’s access to cloud storage systems when he left the company, and Apple itself instructed Liu to retrieve information from his time with Apple. “Beyond conclusory allegations lacking factual support, Apple does not allege that Mr. Liu ever disclosed a file to OpenAI or used one in OpenAI’s hardware work,” the motion states. According to the motion, Liu only discussed Apple’s information with Apple employees.

With respect to Tan, the motion contends that Apple’s complaint “never identifies any particular trade secret, at any level of detail, that Mr. Tan supposedly acquired, used, or disclosed.” It characterizes the allegations against Tan as speculative and asserts that the degree of detail in the complaint “comes nowhere close to the pleading requirements for trade-secret claims.” Furthermore, the defendants argue that the complaint fails to allege that any candidate allegedly coached by Tan actually disclosed an identified trade secret.

Finally, the motion contends that “scattershot” allegations against OpenAI do not contain sufficient facts indicating any involvement by OpenAI in the alleged misappropriation. According to the defendant, Apple “admits outright that it has ‘virtually no visibility’ into whether either individual defendant acted to benefit OpenAI.” Nothing in the complaint would support a finding that OpenAI received any secret information from prospective hires from Apple, or that its pre-interview guide sent to candidates mentioned Apple or asked for confidential information. The motion also denies Apple’s accusations that OpenAI sought to access proprietary Apple information from suppliers. “OpenAI has no need or desire for any information involving the hardware design or supply chain for Apple’s products,” the motion states. “It is seeking to make hardware that is untethered by traditional interfaces such as Apple’s and is unlike any known Apple product.”

The defendants ask the court to dismiss Apple’s complaint with prejudice. A hearing on the motion to dismiss has been scheduled for October 1. The court will also hear arguments with respect to Apple’s motion for a preliminary injunction.

The Case is No. 5:26-CV-07078-EJD.

Judge: Davila, E.

Attorneys: Gabriel S. Gross (Weil, Gotshal & Manges LLP) for Apple Inc. Andrew H. Schapiro (Quinn Emanuel Urquhart & Sullivan, LLP) for OpenAI Foundation, OpenAI Group PBC, IO Products, and Tang Yew Tan. Kate Ellis Lazarus (Kwun Bhansali Lazarus LLP) for Chang Liu.

Companies: Apple Inc.; OpenAI Foundation; OpenAI Group PBC; IO Products

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