What Apple v. OpenAI Reveals About Confidentiality Agreements

A confidentiality agreement protects specific, identifiable information — not the general skill and experience a person builds up doing their job. That single line is what the whole Apple v. OpenAI trade secrets case turns on, and it is the distinction that shows up in almost every confidentiality agreement we draft for founders.

This is a US federal case, not Canadian law, and Ruby doesn't represent either party. It's also not the kind of dispute Ruby handles day to day. What it illustrates cleanly is worth understanding on its own terms.

Key takeaways

• Apple is suing OpenAI, and two former Apple employees, alleging a coordinated scheme to take confidential hardware designs, code names, and physical prototypes on the way out the door.
• The case turns on one legal line: general skill and experience a person builds on the job is theirs to take anywhere; specific, identifiable confidential information is not.
• Apple's complaint is built almost entirely around concrete detail — documents, code names, components — precisely because that distinction is what a court will actually test.

What was filed

In July 2026, Apple filed suit in the Northern District of California against Chang Liu and Tang Yew Tan, two former Apple hardware engineers, along with OpenAI itself and io Products, the hardware startup OpenAI acquired for roughly $6.4 billion.

Media shorthand calls it "Apple v. OpenAI." The complaint alleges something more specific: that OpenAI's leadership directed a recruiting effort that used Apple's own internal code names in job conversations, asked candidates to bring physical Apple components to interviews, and coached departing employees on how to get past Apple's exit security review.

OpenAI is not taking this quietly. It has moved to dismiss, twice, and argues the real story is Apple struggling to retain engineering talent, not trade secret theft. It disputes specific factual claims in the complaint, including saying Apple's own outside lawyers confused two employees with similar last names. It has called the suit "careless, aggressive and oddly personal."

None of this has been tested by a court. Both sides' accounts are contested, and Apple's complaint is an allegation, not a finding.

The one distinction the entire case rests on

Every employee who signs a confidentiality agreement — standard practice at almost any company — is agreeing to something narrower than it sounds. Not "never use anything you learned here." The law draws a real line between two different things.

General skill and knowledge, the expertise a person builds simply by doing their job, belongs to them. They can take it anywhere, use it at their next company, and no confidentiality agreement can lawfully stop that.

Specific confidential information — actual trade secrets, proprietary designs, unreleased product details — is different. That belongs to the employer, and a departing employee genuinely can't take it or use it elsewhere.

Apple's whole case depends on proving this is the second kind, not the first. That's exactly why its complaint leans so heavily on concrete detail: internal code names, physical components, documents that turned up on personal devices after employees left.

A vaguer claim — that these engineers simply knew a lot about how Apple builds hardware — wouldn't get anywhere near an injunction. The law doesn't protect a company from a former employee being smart and experienced. It protects specific secrets, and only if the company actually took reasonable steps to keep them secret in the first place.

What Apple actually has to prove

Trade secret law in the US, under the federal Defend Trade Secrets Act, requires three things:

1. Information that's genuinely secret and derives real value from staying that way.
2. Reasonable steps by the owner to protect it.
3. Improper acquisition or use by the defendant — through a breached duty of confidentiality, not independent invention.

Apple has pleaded four separate claims under that statute, one against each defendant, plus two breach of contract claims against the two individual former employees.

What it's asking for so far is an injunction and the return of its materials, plus damages to be proven at trial. No dollar figure has been attached. That's a meaningful detail on its own: this is currently a fight about stopping conduct and getting documents back, not a quantified damages claim.

The lesson for anyone building a team

Take the specific companies out of it, and this is a story every founder eventually runs into from one side or the other.

A well-drafted confidentiality agreement doesn't — and shouldn't try to — stop a departing employee from using the general expertise they built up. Trying to write one that broad is usually unenforceable, and it makes the agreement look overreaching rather than protective. What it can and should protect is specific, identifiable information: source code, unreleased designs, client data, pricing models, the things that actually give the business its edge. That's the job of a mutual NDA at the start of a conversation, and of the confidentiality terms inside a standard employment agreement once someone joins.

Confidentiality is also only half the protection. It stops information walking out; it doesn't decide who owns what your team creates while they're there. That's what an IP assignment agreement is for, and its absence is one of the most common gaps we see in diligence.

The practical lesson is about proof, not just drafting. If you ever need to enforce a confidentiality agreement, vague claims that someone "knew too much" won't get you an injunction. Concrete, specific detail will. That means keeping real records of what's confidential, who had access to it, and when — long before there's ever a dispute about it.

And if you're the one hiring, the mirror image matters just as much. Recruiting a competitor's talent is completely normal and not remotely risky on its own. Asking a new hire to bring proprietary materials with them, or coaching them on how to avoid their old employer's exit review, is exactly the kind of specific conduct that turns an ordinary hire into a lawsuit.

Sources

• TechCrunch, original filing coverage
• JURIST, legal claims and statutory detail
• NBC News, filing detail and both sides' statements

By the Ruby team.