iCloud habits become OpenAI's defense in Apple suit

OpenAI has answered Apple's trade-secrets filing by naming four of Apple's own exit practices as the reason the confidential material was never guarded well enough to count as a trade secret at all, a defense laid out in the rebuttal reported by AppleInsider.

At a glance

• A corporate defense attorney specializing in trade-secret cases said the standard for proving a holder failed to protect its own data is very high, and that Apple should have no issue meeting it.
• Apple has alleged the departing engineers skipped their check-out interviews, and precedent gives the former employer the benefit of the doubt where turn-in is dodged, placing culpability on the employee.
• The attorney also flagged OpenAI's move from denial to tacit admission after the first forensic filings as damning, since Apple's accusations have stayed consistent through the case.

The defense reads as a bet that Apple's internal hygiene, rather than what left the building, can be made the central question. That bet is expensive if it fails: the same filing that calls Apple's procedures sloppy also moves OpenAI away from its earlier denial, and the attorney's read is that the shift itself will weigh on the court. On the publicly available record, the insufficient-protection argument appears to be the weaker half of the case.

OpenAI's rebuttal names four Apple exit practices, starting with personal iCloud accounts

The rebuttal answers Apple's latest filing over the alleged theft of confidential information, and repeats OpenAI's claim that Apple is using the case to keep employees from leaving. According to Reuters, the filing also attacks Apple's record in AI, saying employees can leave a company that has struggled to adopt AI for a startup building innovative products.

Apple may not like those choices. But it cannot claim those choices are unlawful, and it cannot use its own sloppy procedures to blame others for its own mess.

OpenAI's list of Apple failings runs to four items: staff are encouraged to use personal iCloud accounts, departing employees get no time to return company hardware, no mechanism to transfer internal files back, and no window to hand over responsibilities. The result, per the filing, is that ex-employees keep devices and struggle to separate personal iCloud data from company material.

Apple should have no issue meeting the protection bar, the defense attorney says

The attorney, who specializes in corporate cases involving trade-secret theft, said the bar for proving that a holder failed to protect its own data is very high, and that Apple should have no issue meeting it on the publicly available record.

On OpenAI's claim that Apple allowed too little time to return materials, prior cases set the generally acceptable turnaround as very short, sometimes only hours. Apple has already alleged that the departing engineers willfully skipped their check-out interviews. Where an employee dodges check-out and turn-in and that is proven, the former employer is generally given the benefit of the doubt, with culpability resting on the employee.

Arguments that a cloud service offers insufficient protection have historically been difficult to make in court. Precedent in similar trials places the responsibility on the account holder, meaning the former employee, to secure and handle the data in an ethical fashion, particularly where exit interviews were avoided.

The attorney calls OpenAI's shift from denial to tacit admission damning

OpenAI first denied the theft, then tacitly conceded it in Monday's filing after initial forensic filings, a sequence the attorney described as damning. What has been reported so far of the new filing reads as tantamount to admitting guilt, according to AppleInsider.

Judges have long memories. When Apple filed, OpenAI already knew if they did or didn't do it, and should have gone this route from the beginning.

The attorney compared the change in statements to a parent catching a child "on the ladder, with his hand in the cookie jar, and crumbs everywhere", and said Apple's consistency in accusation will be clear while OpenAI trying anything that will stick will be messy.

Next hearing set for early October

The next hearing in the case comes in early October. Until then, OpenAI's insufficient-protection defense has to survive a standard the defense attorney describes as very high, on a record that already carries Apple's allegation that the departing engineers willfully skipped their check-out interviews and the attorney's view that OpenAI should have taken this route from the start.