Apple Sues OpenAI for Orchestrating Trade Secret Theft Through Departing Employees: Why Your Exit Procedures Matter

Apple filed a 41-page complaint in the U.S. District Court for the Northern District of California in July 2026, accusing OpenAI and its hardware subsidiary IO Products of orchestrating a systematic campaign to steal Apple's confidential product designs, manufacturing processes, and supply chain strategies. At the center of the lawsuit is Tang Tan, Apple's former Vice President of Product Design for the iPhone and Apple Watch, who left Apple after 24 years to become OpenAI's Chief Hardware Officer. The case offers critical lessons for any business that depends on keeping its proprietary information confidential when employees depart.

The Dispute

Apple alleges that the trade secret theft was not the work of a single rogue employee but a coordinated effort involving multiple former Apple engineers. According to the complaint, Tang Tan directed job candidates who were still employed at Apple to bring "actual parts" from Apple to their interviews at OpenAI for "show and tell" sessions designed to extract confidential information. The lawsuit also names Chang Liu, a former senior electrical engineer who allegedly failed to return his company-issued laptop and later exploited an authentication vulnerability to access Apple's internal network, downloading dozens of confidential hardware files.

Apple claims that more than 400 of its former employees now work at OpenAI and that the company systematically targeted Apple's engineering talent to acquire proprietary knowledge it could not develop on its own. In September 2026, Apple filed a supplemental brief citing forensic evidence from a MacBook that showed downloads of highly confidential power-converter circuit schematics and subsequent circuit simulations synced to external accounts. Apple is seeking expedited discovery and a preliminary injunction to prevent further use of its confidential materials.

How Trade Secret Misappropriation Works in the Employment Context

Under the federal Defend Trade Secrets Act and state trade secret laws, a company can bring a misappropriation claim when someone acquires, discloses, or uses its trade secrets through improper means. In the employment context, this often occurs when departing employees take confidential files, share proprietary knowledge with a new employer, or fail to return company devices and materials. Courts evaluate several factors to determine whether information qualifies as a trade secret, including whether the company took reasonable steps to maintain its secrecy through measures such as non-disclosure agreements, access restrictions, and return-of-property policies at the time of departure.

What makes this case particularly notable is the allegation that the misappropriation was directed by someone in a leadership position at the hiring company. If proven, this could expose OpenAI not only to significant damages but also to findings of willful and malicious misappropriation, which can result in enhanced damages and attorneys' fees under both federal and state law.

Key Takeaway for Business Owners

This case is a reminder that protecting trade secrets starts long before a dispute arises. Every business should implement clear confidentiality agreements with employees who have access to sensitive information, maintain strict policies requiring the return of all company devices and materials upon departure, conduct exit interviews that reinforce confidentiality obligations, and monitor for unusual data access or downloads in the weeks leading up to an employee's departure. If your business is on the hiring side, understand that actively soliciting confidential information from candidates who are still employed by a competitor creates serious legal liability.

Whether you are trying to protect your own trade secrets or avoid liability when hiring new talent, having the right policies and procedures in place is essential. Schedule a free consultation with Diorio IP Law Group to discuss how to safeguard your business's most valuable confidential information.