Apple Sues New System-On-Chips Startup, Says It Hired Its Employees To Steal Chip Secrets

There appears to be a full-blown legal fireworks in the offing as tech-giant, Apple last week filed a lawsuit in California, accusing a Santa Clara-based startup, Rivos and its two former employees, Bhasi Kaithamana and Ricky Wen of stealing trade secrets to build a competing chip lineup.  

In the suit, Apple accused the company of mounting a “coordinated campaign” to attract Apple employees, while encouraging them to copy confidential documents before leaving, in the process violating their contract with Apple.

With the case pitching the American multinational technology company against what is now seen as new  rival, the iPhone maker is claiming Rivos tried to gain an unfair advantage by poaching dozens of its employees to get access to internal files.

The Rivos startup which was founded in May 2021, with the mandate of developing system-on-chips seen to rival those used by Apple and other companies, the company operated in stealth mode as it hired employees from several major tech companies. Apple posited that 40 of its engineers, many of whom were familiar with its system-on-a-chip (SoC) designs were among the employees with the suit averring that in addition to simply having general knowledge of SoCs like the M1 and A15, Rivos encouraged employees to copy troves of work-related documents before leaving.

“Rivos began a coordinated campaign to target Apple employees with access to Apple proprietary and trade secret information about Apple’s SoC designs,” to gain an unfair advantage, part of the suit claims.

Bhasi Kaithamana and Ricky Wen, the two Rivos employees named in the suit were both longtime Apple engineers, with the former having worked for the Apple for close to  eight years and  the latter for nearly 14  years. In the suit which  alleged that Rivos began a coordinated campaign to target Apple’s employees, Apple claimed both Kaithamana and Wen had signed an intellectual property agreement (or IPA) that banned them from disclosing proprietary information. It claimed that before leaving in August 2021, Kaithamana had copied a series of spreadsheets, presentations, and text files onto an external USB drive under the name “APPLE_WORK_DOCS” while Wen also accessed files related to Apple trade secrets, including “files related to Apple’s unreleased SoC designs”, in the process making a copy of his company-issued computer’s hard drive just before he departed.

“The sheer volume of information taken, the highly sensitive nature of that information, and the fact that these employees are now performing the same duties for a competitor with ongoing access to some of Apple’s most valuable trade secrets, leave Apple with few alternatives,” the suit says.

The big tech company with the suit is asking for damages in monetary terms, while asking for an order requiring Rivos to return any proprietary information. The suit also contended  that it had previously notified  of its theft in a letter and never heard back. “If Apple does not act to protect its most sensitive secrets now, Apple could lose trade secret status over them entirely,” it says. “That outcome is untenable.”