Apple v. OpenAI Trade Secrets Lawsuit Escalates as OpenAI Demands Complete Dismissal with Prejudice

Apple v. OpenAI Trade Secrets Lawsuit Escalates as OpenAI Demands Complete Dismissal with Prejudice

The high-stakes legal battle between Apple and OpenAI has reached a critical juncture. On August 27, 2026, OpenAI, its former employees Chang Liu and Tang Yew Tan, and Jony Ive’s hardware startup io Products filed a joint rebuttal brief asking the federal court to dismiss Apple’s trade secret misappropriation complaint with prejudice. The filing represents a major escalation as both sides complete their briefing ahead of a crucial preliminary injunction hearing.

Core Allegations in Apple's Complaint

Apple’s lawsuit, filed in July 2026 in the Northern District of California, alleges that OpenAI systematically recruited key hardware talent to improperly acquire Apple’s proprietary hardware designs and supplier data.¹ The primary claims focus on two key figures:

• Chang Liu (Former Apple Senior Systems Electrical Engineer): Apple alleges that after joining OpenAI, Liu discovered and exploited an authentication bug to access Apple's internal network for weeks, downloading confidential files concerning the manufacture and testing of main logic boards.
• Tang Yew Tan (Former Apple VP of Product Design / OpenAI Chief Hardware Officer): Apple claims that Tan coached prospective hires on how to bypass Apple’s security systems and requested that candidates interviewing at OpenAI bring proprietary physical components—including batteries, systems-in-package, main logic boards, and shields—for "show and tell" sessions.

In response to these allegations, Apple has sought a preliminary injunction to freeze OpenAI's hardware business and requested expedited discovery to determine the scope of the alleged theft.

OpenAI's Demand for Dismissal with Prejudice

In their August 27, 2026 filing, OpenAI and its co-defendants argued that Apple's complaint fails to clear the basic legal thresholds established under the Defend Trade Secrets Act (DTSA). They claim that Apple’s case is built on "vague categories and catch-alls" and relies on speculation rather than concrete facts.

In its brief, OpenAI stated:

"To state a DTSA claim, Apple must connect three propositions concerning the same information and the same Defendant: what the particular asserted trade secret is; why that information qualifies for protection; and how a defendant improperly acquired, disclosed, or used it. Neither Apple’s Complaint nor its opposition ever completes that chain."

OpenAI also accused Apple of asking the court to make unreasonable inferences, arguing that Apple's attorneys are attempting to substitute speculation for missing facts:

"A request that a candidate bring 'parts' becomes assumed receipt of confidential information. Pre-interview downloading becomes assumed disclosure during the interview. A question about an Apple project becomes assumed receipt of trade-secret information."

Next Steps and Upcoming Hearing

With the completion of OpenAI’s rebuttal filing, briefing on the motion to dismiss is officially complete. The federal court is scheduled to hold a combined hearing on OpenAI’s motion to dismiss and Apple’s motion for a preliminary injunction on October 1, 2026. The outcome of this hearing will determine whether Apple can freeze OpenAI’s hardware ambitions or if the lawsuit will be thrown out entirely.