Apple urges judge to halt competitor’s tech sensor development, claiming stolen trade secrets

SAN JOSE, Calif. (CN) — Apple asked a federal judge for wide-ranging injunctive relief Tuesday after it claimed a former employee stole trade secrets and gave them to a Chinese competitor.

In August, the tech giant sued former Apple Watch engineer Chen Shi, along with Oppo, a Shenzhen-based smartphone manufacturer that Apple claimed received and proliferated its confidential information on health and thermal sensors in its watches. After leaving Apple, Shi took a position with InnoPeak Technology, Oppo’s Palo Alto-based research arm that is also a named defendant in the case.

On Tuesday, U.S. District Judge Eumi Lee listened intently to Apple’s arguments on a motion for a preliminary injunction that would include Oppo identifying and quarantining its employees that were exposed to Apple’s trade secrets, wiping any of Oppo’s developments that may have used Apple’s information, and auditing Oppo’s data systems, including employee emails and documents, to ensure Cupertino-based Apple’s trade secrets are not further disclosed through Oppo.

In a PowerPoint presentation to a courtroom of a few dozen attorneys, Apple attorney Leslie Schmidt explained Shi’s intellectual property agreement with the company is enforceable in terms of the prohibition of use of Apple’s products and information by third parties.

Schmidt said Apple’s irreparable harm was clear and an injunction necessary because “the trade secrets are already out there.”

“They leap-frogged and got it gift-wrapped from Dr. Shi,” Schmidt said of Oppo’s use of Apple’s trade secrets.

Another named defendant, Zijing Zeng, oversaw an Oppo team that Apple claims used information from slide presentations and text messages regarding thermal and health sensors given by Shi to InnoPeak Technology employees.

Once Apple became aware of Shi’s purported use of confidential information and alerted Oppo and InnoPeak, the companies put Shi and Zeng on leave and investigated, according to Oppo’s attorneys.

Shi and Zeng have been on paid leave for six months. Apple’s proposed injunction would keep them on leave until the case is resolved.

“Apple had an emergency, and Oppo and InnoPeak were models of corporate compliance,” Oppo attorney Boyd Cloern told the court.

Cloern said the investigation, which included forensic tracking software, stopped the risk of “hundreds of documents from flying around China,” and the investigation found there were “no allegedly stolen documents” in the company’s possession.

He asserted that InnoPeak and Oppo did not have any documents pertaining to Apple’s trade secrets, and any tech products with health or thermal sensors the companies may be working on are entirely of their own development.

Cloern said Apple’s definition of trade secrets was not clear enough for Lee, a Joe Biden appointee, to grant any injunctive relief, and that “thermal sensors” and “product roadmaps of health sensors” did not provide a workable definition but would instead create hardship for Oppo, as it was working on products utilizing that language.

He said Oppo would be unaware of possibly being in contempt of court or unable to compete in the marketplace under an injunction with Apple’s definition.

“I agree the language is very broad in this particular case,” said Lee.

InnoPeak’s attorney Victor Yu said Apple had not shown irreparable harm, a necessity for an injunction, because the information Shi relayed was not a specific trade secret, and any Apple documents that Shi purportedly took were already seized from a laptop that is currently quarantined with the Department of Justice.

The multi-hour hearing consisted of both open and closed sessions, with Apple concerned about its proprietary information in open court.

“It’s important to be balanced in the court’s interest, but I need to learn about this stuff,” Lee said.

In rebuttal, Apple attorney Schmidt said Oppo wants to go back to “business as usual” and “waited until they got caught” to stop using Apple’s trade secrets. She said the scope of relief Apple seeks is based on an order from trade secret case WeRide Corp. et al v. Huang et al.

“I am having trouble understanding the scope and breadth of the trade secrets,” Lee said, before closing the court for a third time.

She did not indicate her thoughts on the injunction from the bench before going into closed session.