Apple Sues Former Employee for Passing Secret Apple Information to a Media Correspondent for Gain and more
Every once and a while a story breaks that's a real eye opener. Today Apple filed a lawsuit against former employee to stop the misappropriation of Apple’s trade secrets by Simon Lancaster. Despite over a decade of employment at Apple, Lancaster abused his position and trust within the company to systematically disseminate Apple’s sensitive trade secret information in an effort to obtain personal benefits. Apple further noted in their court filing that "after Lancaster’s resignation, he began working at a company [Arris] that served as a vendor for Apple under a vendor service agreement. Portions of the trade secret information Lancaster misappropriated relate directly to his role at his new employer, and it is likely Lancaster’s misuse of Apple’s trade secrets continues to this day." Apple is demanding a jury trial for all issues so triable.
The Three Causes of Action
- Violation of Defense of Trade Secret Act
- Violation of California Uniform Trade Secret Act
- Breach of Written Contract
Secret Apple Information or "SAI"
The following is from Apple formal Complaint before the court:
"Apple is engaged in the development of new computer hardware and software, including the development of novel hardware products and improvements to its existing line of products. Apple’s research and development activities related to these products are closely guarded secrets that are not publicly revealed, if at all, until Apple releases those products or issues official statements about them.
As with all its unannounced products, Apple’s research and development is conducted under rigorous conditions to maintain the secrecy of those activities and the products themselves. Apple carefully controls all information relating to these projects. The Apple teams working on these products expend substantial time and energy to ensure that the process remains secret. Further, those teams often spend multiple years working on secret products that they cannot discuss outside work in light of the required secrecy.
Apple has made substantial investments in developing proprietary technology in support of its novel products and updated generations of its existing products. Apple protects the details concerning this technology—including but not limited to schematics, software code, project plans, algorithms, and hardware—from disclosure to the public and to Apple’s competitors, including persons who can obtain economic value from the use or disclosure of this technology
Maintaining this information as a trade secret is essential to Apple’s ability to compete in the computer hardware and software markets. These fields are characterized by rapid technological advances and intense competition. If an Apple competitor were to obtain details about Apple’s technology or related commercial information, that competitor could significantly harm Apple by using Apple’s own technology, know-how, and other details about these products to compete directly with Apple without having to spend the capital and/or time that Apple invested in developing such technologies.
In addition to these technology secrets, Apple also possesses information about unannounced novel products and updated generations of existing products that Apple is developing and may release. This information is not accessible to the public or to persons who can obtain economic value from its use or disclosure. Even within Apple, such knowledge is shared only on a need-to-know basis; accordingly, this information is also not accessible to Apple employees other than those working on the products or who otherwise have a legitimate need to know.
If Apple’s competitors obtain access to Apple’s unannounced product information, those competitors could also benefit significantly from the knowledge gained through that access by directing their product development and marketing efforts to frustrate Apple’s plans. This strategic advantage to Apple’s competitors could, in turn, severely harm Apple.
Apple also makes significant investments in advertising and promotional activities surrounding the launch of a new product. Unauthorized disclosures of unannounced products cause Apple to lose control over the timing and nature of potential product releases. Unauthorized disclosures diminish the interest of both the mainstream and trade media in the launch of a new product. Such disclosures may also dampen customer demand for current products. Thus, Apple maintains and protects such information as a trade secret. 21.The information misappropriated by Lancaster comprises information about Apple technology, information about Apple’s unannounced products, and confidential Apple documentation. All of this material comprises Apple trade secrets. In this Complaint, Apple will refer to this information collectively as “Secret Apple Information” or “SAI.”
Lawsuit against Former Employee Simon Lancaster
Apple's formal complaint before the court further states the following:
"Plaintiff Apple Inc. ("Apple") brings this action to stop the misappropriation of Apple’s trade secrets by its former employee Simon Lancaster. Despite over a decade of employment at Apple, Lancaster abused his position and trust within the company to systematically disseminate Apple’s sensitive trade secret information in an effort to obtain personal benefits. He used his seniority to gain access to internal meetings and documents outside the scope of his job’s responsibilities containing Apple’s trade secrets, and he provided these trade secrets to his outside media correspondent ("Correspondent").
The Correspondent then published the stolen trade secrets in articles, citing a "source" at Apple. On multiple occasions, Lancaster proposed that the Correspondent give benefits to Lancaster in exchange for Apple’s trade secrets. For example, Lancaster proposed that the Correspondent provide favorable coverage of a startup company in which Lancaster was an investor as a quid pro quo. Lancaster even recruited the Correspondent to serve as his personal investigator.
In one instance, Lancaster requested that the Correspondent explore a rumor that could prove harmful to a company in which Lancaster had invested. Lancaster’s role as the Correspondent’s "source" deepened even after he announced his resignation from his role at Apple.
Indeed, Apple’s internal investigation of the Apple-owned devices provided to Lancaster as part of his employment shows that after Lancaster announced his resignation, he communicated with the Correspondent regarding specific Apple trade secrets sought by the Correspondent and took specific steps to obtain additional Apple trade secrets.
The trade secrets Lancaster stole and sent to the Correspondent for publication included details of unreleased Apple hardware products, unannounced feature changes to existing hardware products, and future product announcements, all of which Apple guards closely.
Apple’s product teams—innovators, designers, and builders—work in complete secrecy, often for many years, and at significant personal burden, all to surprise and delight Apple’s customers with their creations. The deceitful and indefensible release of these product details enabled by Lancaster’s misappropriation has undermined the morale of the teams that worked on the products and features in question.
Lancaster’s misappropriation also disadvantages Apple with respect to its competitors. With access to valuable Apple information, Apple’s competitors can anticipate Apple’s future course of action and attempt to degrade Apple’s hard-won position as a company at the forefront of innovation.
Further, forensic review of the devices Apple provided to Lancaster for his work at Apple shows Lancaster and the Correspondent coordinated to pilfer specific documents and product information from Apple. On numerous occasions, the Correspondent had requested Lancaster obtain specific Apple trade secret documents and information. On multiple occasions, Lancaster then sent the Correspondent certain of the requested confidential materials using Apple-owned devices.
On other occasions, Lancaster met with the Correspondent in person to provide them with the requested confidential Apple information. The full extent of their conspiracy is presently unknown; however, Apple’s investigation is ongoing.
After Lancaster’s resignation, he began working at a company [Arris] that served as a vendor for Apple under a vendor service agreement. Portions of the trade secret information Lancaster misappropriated relate directly to his role at his new employer, and it is likely Lancaster’s misuse of Apple’s trade secrets continues to this day.
In fact, on his last day at Apple, Lancaster downloaded a substantial number of confidential Apple documents from Apple’s corporate network onto his personal computer that would benefit his new company. Lancaster’s misconduct constitutes trade secret misappropriation under the Defend Trade Secrets Act, 18 U.S.C. § 1836 et seq.; trade secret misappropriation under California’s Uniform Trade Secrets Act (Cal. Civ. Code § 3246, et seq.); and a breach of his contractual obligations to Apple.
Apple seeks injunctive relief, damages, and other appropriate relief to stop Lancaster’s misappropriation, disclosure, and potential use of Apple’s confidential and trade secret materials.
For more details, read Apple's full complaint filed with the court in the full SCRIBD document below, courteous of Patently Apple.
Lancaster got away with revealing trade secrets for over a decade. Whether Apple will reveal the identity of the media Correspondent and their publication at trial is unknown, but if it is, it's going to blockbuster news that could put other leakers on notice.
Will Apple TV+ turn this into a limited series in the future? No. But it sure would make for an interesting story.