When the Trade Secret Is Actually a Trade Secret

Quoted allegations are from the complaint in Apple Inc. v. Liu, No. 5:26-cv-07078 (N.D. Cal. filed July 10, 2026) — read the complaint or follow the docket. OpenAI’s statement is from its public response to the filing.

On Friday, Apple sued OpenAI, two former Apple employees, and OpenAI’s hardware affiliate over alleged trade-secret theft. The filing is in the Northern District of California under the Defend Trade Secrets Act, plus contract claims. In Apple’s words: a “coordinated pattern of misconduct at an institutional level.”

OpenAI says it has “no interest in other companies’ trade secrets.” The defendants have not answered. Allegations are not proof. Courts sort proof later.

What can be said now is narrower, and more useful.

This is not the usual trade-secret complaint.

The cases that waste everyone’s time

If you defend companies for a living, you have seen the other kind.

A sales manager leaves for a competitor. The old employer files. The “trade secrets” turn out to be a customer list that lives on LinkedIn, pricing that went out in every bid, or “relationships” that are just the job description. Sometimes the real complaint is that a competent person left and took their competence with them.

The word “secret” is doing marketing work, not legal work.

Those cases clog dockets. They chill ordinary hiring. They train judges to squint hard at the next plaintiff who waves the DTSA around. They also teach a bad lesson inside companies: that the label is the asset. It isn’t. Secrecy is the asset. Independent economic value from that secrecy is the asset. Reasonable efforts to keep it secret are the asset. Everything else is ordinary competition dressed up as theft.

Apple’s complaint does not read like that.

What Apple says happened

According to the complaint, the story is not “our former VP knows how to design phones.” Of course he does. That is general skill and experience. The law lets people take that with them. It has to.

Apple alleges something else.

Physical things. Job candidates still employed at Apple were allegedly told to bring “actual parts” from Apple to OpenAI interviews for “show and tell.” One candidate, Apple says, remarked that he “didn’t even know we could take those from the office.”

Files. Former senior system electrical engineer Chang Liu allegedly kept an Apple laptop after he left, exploited an authentication bug to re-enter Apple’s systems, and downloaded dozens of confidential hardware files: unreleased products, specs, manufacturing detail, a compilation Apple says ran over a thousand pages. The complaint says he joked about the bug in messages (“LOL,” “so funny”) instead of reporting it. It also says he coached another Apple engineer interviewing at OpenAI on what confidential materials to study, and how to avoid the security team’s attention while copying them.

Interviews as intake. Former Apple VP Tang Tan, now OpenAI’s chief hardware officer, allegedly used Apple project codenames in interviews, asked for updates on unannounced products, and pressed candidates for CAD artifacts, prototypes, subsystem choices, integration tools, and vendor relationships. In one alleged sequence, a candidate screenshotted and downloaded files on a confidential project hours before interviewing with Tan, who then asked about that same project.

Exit hygiene as a playbook. Apple alleges Tan possessed and circulated an internal Apple “Need to Know” security document so new OpenAI hires could dodge Apple’s departure checks. Apple says it found a pattern among employees leaving for OpenAI of steps taken to evade those processes.

Suppliers. Apple alleges OpenAI used insider knowledge to approach Apple partners, including asking one to run a proprietary metal-finishing technique while misleading the partner into thinking it had Apple’s blessing.

Apple says it raised concerns with OpenAI in February and got silence. Then it sued.

OpenAI denies interest in others’ secrets and says it is focused on building. Its best answers, when they come, will almost certainly stress lawful talent competition, residual knowledge, and the absence of any license Apple can claim over people who leave. Discovery will test both sides.

Why this is a different animal

Trade secret law draws a line employment lawyers live on every week: what is free to walk out in a person’s head, and what is not free to walk out in a bag, a laptop, or a “show and tell” bin.

General skill walks. A manufacturing process document that Apple never published does not. Vendor maps built under NDA do not. Unreleased product specs do not. A proprietary finishing technique does not. Physical prototypes from a closed lab do not.

That line is not sentimental. It is the bargain that makes employee mobility possible. If every former engineer were treated as a walking injunction, labor markets freeze. If every laptop full of unreleased board designs is treated as “just know-how,” investment in hard secrets dies. The doctrine works when courts police both errors.

Most weak trade-secret cases fail the first element: there was never a secret, or the plaintiff never treated it like one. The customer list was public. The process could be reverse-engineered from the product on the shelf. The company emailed the “confidential” deck to half the industry.

Apple’s pleaded facts, if proven, hit the other end of the spectrum. They describe information valuable because it is not public, protected by systems people allegedly tried to route around, and extracted not as residual memory but as deliberate acquisition. Bringing “actual parts” to an interview is not residual memory. Downloading a thousand-page technical compilation after you have left is not residual memory. Circulating the exit-security memo so others can evade it is not residual memory.

There is a second distinction that matters for anyone who hires.

Weak cases often rest on “inevitable disclosure”: the claim that the hire will necessarily use secrets in the new job. Many jurisdictions dislike that theory. It can become a backdoor non-compete. Apple’s complaint, as written, does not need it. It alleges affirmative solicitation: coaching, show-and-tell, file downloads, supplier approaches. That is a different case. Harder to dismiss as anxiety about competition. Harder for a defendant to recharacterize as ordinary recruiting.

A third distinction: pattern versus one-off. One departing employee with a USB drive can be a rogue. A complaint that walks from technical staff to a chief hardware officer, from interviews to exit coaching to suppliers, is trying to show the pipeline was the product. Whether Apple can prove that is open. As a pleading, it is not the “we lost a salesperson” template.

The partnership does not dissolve the secrets

Apple and OpenAI are not strangers. ChatGPT sits inside Apple’s ecosystem. That commercial relationship will get plenty of ink. It should not confuse the legal point.

A distribution deal is not a license to take manufacturing know-how. A partnership does not convert a competitor’s unreleased designs into fair game for interview show-and-tell. You can integrate a partner’s model and still own your own board layouts.

For in-house counsel, the practical lesson is simple. Partnerships with talent magnets create dual risk: your people leave, and the people who leave know what is still locked behind the badge. Exit procedures, access cutoffs, device return, and supplier firewalls are not HR theater. The authentication-bug story, if true, is every security team’s problem in miniature: the account that should have died, and didn’t.

On the hiring side, the lesson cuts the other way. How you structure interviews can become Exhibit A. Asking a candidate for CAD artifacts, prototypes, and vendor selection detail is not clever diligence. It is a discovery gift to the former employer. It invites the inference that you were hiring the secrets, not the person.

What this is not asking you to believe

Not that Apple is the hero of intellectual property. Apple litigates hard. It always has. Some of that is earned. Some of that is strategy.

Not that OpenAI did what Apple says. Defendants get to answer. Facts move. Early complaints are maximal. Discovery is where maximal claims shrink or solidify.

Not that courts should freeze talent movement in AI. People should be able to change jobs. Hardware experience should travel. What should not travel is the other company’s hardware.

The useful claim is simpler. Trade secret law is abused often enough that serious cases get met with a shrug. That shrug is a mistake when the complaint describes parts, files, exit-evasion coaching, and supplier misuse rather than “our guy was good and now he works for them.”

If the public record later shows less than Apple pleaded, say so then. If it shows what Apple pleaded, the doctrine is doing the work it was written to do: protecting real secrets so ordinary competition can stay ordinary.

For the people who own these problems

If you run legal or HR at a company that makes anything hard to copy, three questions are worth a staff meeting this week:

1. When someone resigns for a direct competitor, what dies on day one (laptop access, VPN, badge, shared drives), and who confirms it in writing?
2. Do your exit interviews and return checklists assume good faith, or do they assume a motivated person with a private chat app?
3. If you are the one hiring, what do your interviewers ask for, and would you want that request read aloud in a federal courtroom?

Most of the case is written before anyone sues. That is true of employment disputes. It is true of commercial ones. It is especially true when the asset is a secret that only stays valuable while it stays secret.

Apple’s filing is one company’s version of events. OpenAI will have another. Between them is a line every employer and every high-velocity hiring shop lives on: skill moves; the company’s work product does not.

This complaint, as pleaded, is about the second half of that sentence. That is why it is not the usual noise.