Key TakeawaysApple launched legal action against OpenAI and two former staff members in federal court FridayFormer Apple VP of product design Tang Yew Tan and engineer Chang Liu face accusations of misappropriating proprietary informationThe iPhone maker alleges OpenAI leveraged stolen technical data to develop competing consumer hardwareAccording to Apple, the company attempted to address concerns with OpenAI in February without successOpenAI refutes the allegations, stating it has “no interest in other companies’ trade secrets”The Cupertino-based technology giant initiated legal proceedings Friday in the U.S. District Court for the Northern District of California, targeting OpenAI, two former Apple personnel, and hardware venture io Products.$AAPL sued OpenAI in federal court, alleging trade secret theft tied to OpenAI’s consumer hardware push.Apple named OpenAI hardware chief Tang Tan and former Apple engineer Chang Liu in the suit, alleging confidential hardware files and unreleased product materials were taken.… pic.twitter.com/qJKR7X6vDq— Wall St Engine (@wallstengine) July 11, 2026The complaint alleges a systematic scheme by OpenAI to obtain Apple’s proprietary data through strategic recruitment, supplier relationships, and unauthorized access to protected documents.The defendants include Tang Yew Tan, who previously served as Apple’s VP of product design overseeing iPhone and Apple Watch development, and Chang Liu, a senior electrical engineer. Tan dedicated nearly a quarter-century to Apple before transitioning to OpenAI in the role of chief hardware officer.Apple Inc., AAPLAccording to the filing, Liu allegedly retained an Apple-issued laptop and exploited a security vulnerability to extract “dozens of confidential hardware-related files” from the company’s protected systems.The lawsuit claims Tan transmitted supplier details and proprietary industry analyses to his personal email account prior to his departure from Apple.Apple further alleges that OpenAI recruitment practices included requesting job applicants to bring actual Apple hardware components for demonstration purposes during interviews. One prospective hire reportedly expressed surprise, stating they “didn’t even know we could take those from the office.”OpenAI has categorically rejected these claims. Company spokesperson Drew Pusateri emphasized that the organization remains “focused on building innovative technology that empowers people everywhere.”Apple’s legal filing indicates more than 400 former Apple personnel currently hold positions at OpenAI. The complaint clarifies that this employee exodus does not authorize OpenAI to exploit confidential information obtained during their Apple tenure.What’s at Risk: Hardware Competition and Deteriorating RelationsThis legal battle emerges amid OpenAI’s expansion into consumer electronics. The AI company completed a $6.5 billion acquisition of io Products last year, a startup co-founded by legendary Apple designer Jony Ive, who is not implicated in the current litigation.Industry observers anticipate OpenAI will unveil its debut hardware offering—an AI-powered keyboard—within weeks. Market analysts suggest the company is simultaneously developing a smartphone or alternative standalone device.The two companies previously maintained a collaborative relationship. Throughout 2024, Apple incorporated ChatGPT functionality into its ecosystem via Siri integration. However, this year saw Apple redirect substantial AI capabilities toward Google’s Gemini platform.Stanford Law professor Mark Lemley characterized the litigation as potentially “very big,” while acknowledging that California law permits hiring from competitors. He emphasized, however, that appropriating confidential materials would create significant legal exposure for OpenAI.Apple seeks injunctive relief preventing OpenAI from utilizing any allegedly misappropriated information, plus monetary damages to be determined.The complaint asserts that Apple’s hardware operations “now rest on the shakiest of foundations” if competitors build products using stolen intellectual property.This lawsuit represents a dramatic reversal in what had been a cooperative business relationship. Apple CEO Tim Cook announced his planned retirement later this year, with OpenAI’s Sam Altman praising him as “a legend” during the April announcement.The post Apple Takes OpenAI to Court Over Alleged Theft of Trade Secrets by Former Staff appeared first on Blockonomi.