On Friday (July 10, 2026), fresh off the heels of having xAI’s case against it dismissed, OpenAI was sued again — this time by Apple.
Nothing of substance has happened yet in the lawsuit. (Just a few pro hac motions and related orders.) But it still made headlines. Why? Mostly because it involves Apple and OpenAI. But also because it’s about AI.
But that’s not why I’m talking about it.
I’m discussing it because the allegations — if true — present a paradigmatic example of employee trade secret misappropriation and how it escalates.
The Core Allegations and What They Mean
The Complaint is quite typical.
It starts (not surprisingly) with a bit of (mostly deserved) self-aggrandizement:
Apple has invested hundreds of billions of dollars and decades of effort in developing groundbreaking consumer hardware products like iPhone, Apple Watch, and MacBook, along with the business acumen and infrastructure to bring them to market at scale. This sustained and focused investment of time, talent, and resources has produced engineering breakthroughs, manufacturing and supply chain innovations, and a global network of strategic partnerships—all built on confidentiality and trust. Apple surprises and delights its customers each year with innovative new hardware products, keeping much of its work secret until the moment its finished products are ready to be revealed.
The Complaint then describes (at a high level) Apple’s claimed trade secrets and approach to secrecy:
Behind the scenes, Apple keeps its product development, manufacturing, supply chain, technology research, and other innovations confidential. The trade secrets spanning Apple’s hardware operations collectively constitute one of the most valuable intellectual assets in all of American business. They enable Apple to bring new products with unique features to consumers at extraordinary speed and scale. Apple takes the confidentiality of its trade secrets seriously. In the rare situation where Apple becomes aware that its confidential information may have been compromised—by a third party, a partner, an employee, or anyone else—it investigates and works to contain and resolve any issues. This case arises from such an investigation. Apple has uncovered a pattern of theft of Apple’s trade secrets by OpenAI employees who were formerly at Apple.
With that background, the Complaint then identifies the defendants (OpenAI and two former Apple employees, Chang Liu and Tang Yew Tan) and describes the alleged misconduct.
Instructively, Apple claims that defendant Liu, an engineer who is alleged to have worked with some of Apple’s key trade secrets, ignored requests to complete standard exit procedures: signing a confidentiality reminder, scheduling an exit interview, and confirming that he returned company property. This is a red flag — and a very common one at that. Employees who fail or refuse to compete basic exit procedures (often needlessly) give rise to (often unjustified) suspicion, resulting in increased scrutiny and potential problems — precisely as happened here.
Not surprisingly, the Complaint alleges that this led to an investigation.
Apple asserts that the investigation revealed that, while working for OpenAI, Mr. Liu exploited a security flaw and “surreptitiously accessed and downloaded dozens of Apple’s confidential hardware-related files, including voluminous, detailed information about unreleased products, engineering presentations, technical specifications, and proprietary project data.” Relatedly, the Complaint also asserts that other former Apple who later joined OpenAI employees accessed and took information from Apple on the way out the door. These allegations identify recurring themes in trade secret/employee mobility cases — specifically, accessing and taking files in anticipation of leaving. Such conduct is typically a serious problem, potentially constituting trade secret misappropriation in violation of state and federal law (among other things). And doing so after leaving is worse. And doing so while working for a competitor is even worse. This is the very type of misconduct that can quickly turn a successful defense into a losing one. (This issue is so frequent and significant that it is one of the main reasons we put together The Exit Plan: Being a Good Leaver video.)
Apple also alleges that Mr. Liu recruited, encouraged, and coached a former colleague about which confidential information to study for interviews with OpenAI and “directed” the former colleague to communicate with him through a separate messaging app. These allegations highlight three additional common themes in trade secret cases: First, anytime a departing employee involves another person, communications with that person may become evidence. Second, in contexts like these, the interests of the two individuals can quickly diverge — especially if one of them remains employed and helps the company in its case against the departing employee. And third, efforts to move communications to non-work platforms will very likely be viewed (and characterized) as reflecting a consciousness of guilt and an intent to conceal misconduct.
Although the Complaint does not explain precisely how Apple’s investigation broadened, apparently it did. And, based on the investigation, Apple claims that it discovered that other individuals, including defendant Tang Yew Tan, and OpenAI engaged in a broader range of misappropriation. Among other things, Apple alleges that some unspecified number of the over 400 former Apple employees who went to OpenAI “emailed themselves Apple’s confidential information to personal accounts on their way out the door.” Emailing documents to a personal email account is one of the most common methods of trade secret misappropriation, though it is surprising that a company like Apple would not have picked up such alleged misappropriation in the ordinary course of operations or through data-loss prevention systems, as opposed to in the context of a long-after-the-fact investigation.
Apple also claims that Mr. Tan asked employees to bring and disclose Apple’s confidential information in job interviews. Whether or not that in fact happened here, it’s hard to disagree with the notion that no one should be disclosing another party’s trade secrets in a job interview — and no one should be asking them to.
Again not surprisingly, Apple aggregates these incidents to turn its gaze to OpenAI. And when it does, it makes a variety of additional allegations, including that OpenAI “instructs new hires on how to avoid scrutiny when they leave Apple. For example, Mr. Tan warns them not to tell Apple that they have taken jobs at OpenAI, so they can stay at Apple as long as they can.” The Complaint makes a variety of other accusations involving Mr. Tan’s and Mr. Liu’s conduct, and also claims that OpenAI uses some of Apple’s suppliers and sub-suppliers, whose identities, roles, relationships, and related information Apple claims were confidential. Two observations here. First, much of Apple’s evidence is Mr. Liu’s and Mr. Tan’s alleged conduct, as opposed to OpenAI’s separate conduct. That raises an important question: If Mr. Liu and Mr. Tan did what Apple alleges, were they acting as rogue employees or implementing OpenAI policy — a distinction that may or may not matter. Second, whether employees should disclose the identify of their new employer or not is a recurring theme in trade secret litigation. And, when employees do not disclose and remain in their job during a transition period, there will inevitably be an accusation that they failed to disclose so they could stay and act as a double agent. Indeed, perhaps most notably, the employee’s lack of candor about where he was going was one of the key facts articulated by the 7th Circuit in its seminal inevitable-disclosure decision, PepsiCo v. Redmond. (The question of disclosure is such a critical, recurring issue that it is another of the main reasons we put together The Exit Plan: Being a Good Leaver video.)
Takeaway
For now, these are only allegations — and OpenAI and the individual defendants have yet to respond.
But the allegations illustrate how an employee-mobility dispute can quickly escalate: A failed exit process leads to an investigation that uncovers suspicious downloads and communications that leads to other employees, to improper recruiting practices, to misuse of supplier relationships and information — and what began as one employee’s alleged misconduct suddenly becomes a claim of institutional misappropriation.
Whether Apple can prove that broader case (or even the narrow case) remains to be seen. But the alleged progression is a familiar one, and an important reminder that small warning signs at departure should not be ignored.