Dec 9, 2019 - Technology

Apple sues former employee over new chip venture

A picture of Apple Park, Apple's "spaceship" campus in Cupertino.

A picture of Apple Park, Apple's "spaceship" campus in Cupertino. Photo: Ina Fried

Apple is suing a former employee who started Nuvia, a server chip startup that has hired at least 8 former Apple workers.

Why it matters: The suit is already bringing forth unusual disclosures from inside the secretive tech giant, including allegations Apple illegally searched its former employees' private text messages.

The background: Apple filed suit against Nuvia founder Gerard Williams III in Santa Clara Superior Court back in August, alleging breach of contract and breach of duty of loyalty. Apple is seeking an injunction, punitive damages and other remedies.

  • Williams spent 9 years at Apple, most recently as a senior platform architect, designing chips for the iPhone and iPad.
  • Nuvia announced itself publicly last month, saying it had raised $53 million in funding from Capricorn Investment Group, Dell Technologies Capital, Mayfield and WRVI Capital, among others.

What Apple's saying: Apple is saying that Williams breached his contract with Apple by planning Nuvia and recruiting former Apple workers for it while still working for Apple. It also alleges that some of Nuvia's technology results from Williams' work at Apple and therefore belongs to the company under the intellectual property agreement signed by all employees.

"This case involves a worst-case scenario for an innovative company like Apple: A trusted senior director with years of experience, and years of access to Apple’s most valuable information, secretly starts a competing company leveraging the very technology the director was working on, and the same teams he was working with, while still employed by Apple."
Apple, in the introduction of its suit

What Nuvia's saying: Nuvia says many of the provisions in Apple's contract violate state law, which generally favors employee mobility. It also says Apple's gathering of text messages was illegal.

"Apple, an early beneficiary of the creative forces that formed and continue to drive Silicon Valley, has filed this lawsuit in a desperate effort to shut down lawful employment by a former employee ... To further intimidate any current Apple employee who might dare consider leaving Apple, Apple’s complaint shows that it is monitoring and examining its employees’ phone records and text messages, in a stunning and disquieting invasion of privacy.
Nuvia, in court documents responding to Apple's suit

Between the lines: Apple positions itself as pro-privacy, and searching through employee phone records and text messages probably won't help that image. While the lawsuit doesn't specify how Apple came to acquire the call records and text messages, while Williams was an employee there could have been information on his Apple-owned devices or server backups of those devices.

Yes, but: No one in Silicon Valley really thinks Apple's pro-privacy stance extends to the work-related actions of its own employees. The company is famous for guarding its secrets and hunting down leaks or anyone who it believes might be taking its information. That said, California law generally frowns upon non-compete and non-solicitation provisions.

The big picture: The history of Silicon Valley and the chip industry in particular is one long saga of teams of engineers leaving one company to start another.

  • The "traitorous eight" left Shockley to start Fairchild in 1957.
  • Key Fairchild employees left to start Intel in 1968.

Our thought bubble: As Berkeley professor AnnaLee Saxenian has argued, this kind of mobility of brains and skills is what made Silicon Valley. Whether Apple wins or loses its case, it's pushing against its own industry's DNA.

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