Apple Inc’s (“Plaintiff”) principal cause of action as against OpenAI and others, arose under the federal Defend Trade Secrets Act of 2016. This statute creates a private civil remedy for the misappropriation of trade secrets related to a product or service used in, or intended for use in, interstate commerce.[i] The Plaintiff has pleaded a parallel breach-of-contract claim against the two individual defendants, namely Mr. Liu and Mr. Tan, premised on confidentiality and proprietary-information obligations said to arise from their respective employment agreements with the Plaintiff. By way of relief, the Plaintiff seeks injunctive relief restraining further use or disclosure of Plaintiff’s confidential information, an award of damages and recovery of attorneys’ fees.

Background

On  July 10, 2026, the Plaintiff commenced proceedings against OpenAI Foundation and OpenAI Group PBC (“OpenAI”), io Products LLC, and two former Apple employees Chang Liu and Tang Yew Tan (collectively “Defendants”), in the United States District Court for the Northern District of California, San Jose Division.[ii] The Plaintiff contends that a coordinated misappropriation scheme of trade secret and breach of contract, have arisen from the Defendant’s act to develop its own consumer hardware device per se. The dispute highlights a major shift between two companies that have had a high-profile commercial relationship since the year June 2024, since they integrated ChatGPT into Plaintiff’s Intelligence platforms, particularly Siri.[iii]

Factual Allegations

The Plaintiff alleged that the misappropriation on the part of Defendants was not the product of isolated rogue actors but was embedded within OpenAI’s institutional culture. Further, Plaintiff alleged that Mr. Liu failed to complete its standard off-boarding process and retained a laptop issued by Plaintiff previously authenticated to the Plaintiff’s internal network. Plaintiff also alleges that upon commencing employment with OpenAI, the Plaintiff’s authentication vulnerability was exploited to gain access to a former colleague’s Plaintiff-issued laptop and repeatedly downloaded confidential hardware files.

A second strand of the Plaintiff concerns Mr. Tan and OpenAI’s recruitment practices more broadly. The Plaintiff alleges that Mr. Tan having knowledge of unreleased projects by the Plaintiff during OpenAI recruitment interviews, and that prospective hires, including individuals still employed by the Plaintiff.[iv] The complaint also alleges that departing employees were provided with an internal document modeled on Plaintiff’s own off-boarding-security checklist, together with advice designed to minimise scrutiny during their exit from the Plaintiff company.

The Motion for Preliminary Injunction

On August 3, 2026, the Plaintiff filed a motion for a preliminary injunction under the Federal Rule of Civil Procedure 65, before J.Davila on October 1, 2026.[v] The motion seeks to restrain the Defendants along with their officers, employees and agents, from accessing, acquiring, using or disclosing the Plaintiff’s trade secret information pending final resolution of the case. The Court has not yet ruled upon the preliminary injunction motion.

Analysis and Significance

The proceeding is important for a number of reasons:

First, it shows the increasing tendency of incumbent tech firms to use trade secret litigation as a competitive barrier on well-funded entrants into adjacent hardware markets, with commentators noting the suit will probably complicate OpenAI’s device aspirations long before a final adjudication on the merits.

Second, the specificity of the Plaintiff’s factual allegations extending to particular authentication bugs, named individuals and an identified supplier, distinguishes the pleading from a more generalised trade secret complaint, and increases the practical stakes for OpenAI in contesting the preliminary injunction motion.

Third, the Plaintiff’s claim being based on a federal statute that provides specific injunctive and fee-shifting remedies means that the outcome of the October 2026 injunction hearing will likely be a major early indicator of the overall direction of the complaint, regardless of how the case is ultimately resolved on the merits.[vi]

It should be emphasised that the matter, at this stage, along with the allegations contained in Apple’s complaint and supporting declarations have not been tested at trial, and the Defendants dispute the suit’s merits.

Conclusion

The case currently concerns allegations of misappropriation at the device, employee and supplier levels and its near-term trajectory will be materially impacted by the outcome of the Plaintiff’s motion for a preliminary injunction, set for hearing on October 1, 2026.

References:

[i] Defend Trade Secrets Act of 2016, S.1836(a).
[ii] Apple Inc. v. Liu, Case No. 5:26-cv-07078-VKD (ND Cal, complaint filed 10 July 2026).
[iii] Ryan Browne, ‘Apple Sues OpenAI Alleging Trade Secret Theft, Says Scheme Was “At Every Level”‘ (CNBC, 10 July 2026),   accessed 5 August 2026.
[iv] Browne (n. 3).
[v] Plaintiff Apple Inc’s Motion for Preliminary Injunction, Apple Inc. v. Liu, No. 5:26-cv-07078-EJD (ND Cal, filed 3 August 2026).
[vi] Defend Trade Secrets Act of 2016.