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Apple Sues Start-Up for Trade Secret Theft

By: Aaron Kim, Insider Threat Analyst

Apple has filed a lawsuit against start-up company, Rivos who has been alleged of starting a “coordinated campaign” to poach Apple engineers to steal trade secrets that were used to develop its own chip designs.

According to the lawsuit, Rivos was founded in May 2021 and has operated for months in stealth mode, hiring employees from several major tech companies. Apple says that included more than 40 of its engineers, many of whom were familiar with Apple’s system-on-a-chip (SoC) designs. But in addition to simply having general knowledge of SoCs like the M1 and A15, the suit alleges Rivos encouraged employees to copy troves of work-related documents before leaving.

Two former employees were named in the lawsuit, Bhasi Kaithamana and Ricky Wen. Kaithamana had been with Apple for almost 8 years while Wen had been with the iphone maker for almost 14 years. Both had signed an intellectual property agreement (or IPA) that banned them from disclosing proprietary information.

Kaithamana had accepted a job from Rivos between July 20th and August 9th last year, then asked Apple for a vacation day on August 10th. “During his day off, Mr. Kaithamana created a new folder on his Apple-issued computer and began copying over Apple documents containing proprietary and trade secret information,” the suit alleged. Although Kaithamana resigned from Apple on August 13, “he worked to continue amassing a collection of Apple’s proprietary and trade secret (chip) files until the day before he left Apple on August 16,” the suit claimed. The folder Kaithamana named “APPLE-WORK-DOCS” contained thousands of Apple documents, and he copied files onto an external storage drive, Apple alleged.

Wen was approached by Rivos about a potential job offer with the company and offered Wen a similar position that he had at Apple sometime between June and July of last year and the offer was accepted on July 23rd, according to the lawsuit. Within the week, Wen had transferred about 390 GB of data that included trade secrets concerning past, current and unreleased chips from his Apple work computer to a personal hard drive. According to Apple, Wen accessed more chip-design secrets the day before he left Apple and had connected a hard drive to his Apple work computer. Additionally, he transferred hundreds of files to his personal Google drive that included chip-design diagrams and kept trade secrets on his iCloud Drive.

Apple’s suit contends it previously informed Rivos 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.”

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This entry was posted on Thursday, May 19th, 2022 at 10:41 pm. Both comments and pings are currently closed.