The value of trade secrets never escapes a well-run company. To that end, Apple Inc. has sued a former product designer claiming that he stole the company’s trade secrets to help his new employer, Arris Composites, and then leaked those secrets to the media to advance his own financial interests. The designer, Simon Lancaster, worked at Apple for more than 10 years and helped design the 13-inch and 15-inch MacBook Pros. He holds several dozen patents for his work.
Apple’s Trade Secret Theft Complaint
According to the complaint, which Apple filed in the U.S. District Court for the Northern District of California in March 2021, Mr. Lancaster used his seniority to gain access to internal meetings and documents outside the scope of his job responsibilities that contained Apple’s trade secrets. He then provided those trade secrets to an outside journalist. The journalist published the stolen trade secrets in articles, citing a “source” at Apple. On multiple occasions, Mr. Lancaster proposed that the journalist provide him with certain benefits in exchange for receiving inside information about Apple’s trade secrets. For example, Mr. Lancaster proposed the journalist provide favorable coverage of a startup company in which Mr. Lancaster was an investor as a quid pro quo. Mr. Lancaster even recruited the journalist to serve as his personal investigator. In one instance, Lancaster requested that the journalist explore a rumor that could prove harmful to a company in which Lancaster had invested. The journalist’s identity was not revealed in the lawsuit.
Trade Secret Theft Investigation
After Mr. Lancaster announced his resignation from Apple, the company conducted an investigation of his Apple-issued devices. That investigation disclosed that he had communicated with the journalist about specific Apple trade secrets sought by the journalist, and took steps to obtain additional Apple trade secret information requested by the journalist. The allegedly stolen trade secrets included details about unreleased Apple hardware products, unannounced changes to certain features of existing hardware products, and future product announcements.
Apple’s Trade Secret Protective Measures
The complaint filed in federal court alleges that Mr. Lancaster violated both the federal Defend Trade Secrets Act and California’s Uniform Trade Secrets Act. It also claims that Mr. Lancaster breached an employee confidentiality and intellectual property agreement.
Apple’s complaint contends the company goes to considerable lengths to maintain the confidentiality of its secret information. According to the complaint, Apple has established detailed trade secret policies for all its employees, maintains physical security in all its buildings, monitors computer access, and requires all employees to execute strict confidentiality agreements. The company limits access to its secret information to employees and contractors who have a demonstrable need to know such information and have signed confidentiality agreements with Apple.
Apple’s complaint further claims that the company limits access to several of the projects that were the subject of Mr. Lancaster’s misappropriations. No one may receive or access information about any of these projects, including secret information, without being “disclosed” to the project. Apple strictly controls who is disclosed and only permits individuals with a demonstrated business need to be disclosed. An employee who is not disclosed to one of these projects can only become disclosed if an Apple employee who is already disclosed “sponsors” the non-disclosed employee for disclosure. The sponsoring employee must submit a disclosure request on behalf of the applicant. The disclosure request must include a business justification for the applicant’s disclosure. A separate Apple employee then reviews the disclosure request and approves or denies it. Implementing these types of detailed protective measures is critical to demonstrating the company took the necessary steps to prove with secrecy element of a misappropriation claim under federal and state trade secret law. Without it, Apple’s claims are sunk.
Despite all the precautions Apple took, Mr. Lancaster was still allegedly able to get access to Apple’s secret information outside his project area. According to Apple, he attended a meeting about Apple’s “Project X” after he announced his resignation because he knew that trade secret information regarding Project X would be disclosed in the meeting, and his journalist friend had asked him for this specific information. While it cannot be confirmed, “Project X” may be related to “Apple Glass,” Apple’s augmented and virtual reality programs, or possibly the AirPod Max. Mr. Lancaster was allegedly told in advance not to attend the Project X meeting, and again told during the meeting that he shouldn’t be there. He eventually left the meeting before it was over, but not before allegedly learning more about Apple’s trade secrets. Whether the actions Apple took at the meeting are enough to preserve the secrecy of the information will be decided at trial.
Apple’s complaint seeks an injunction prohibiting Mr. Lancaster from continuing to misappropriate Apple’s trade secret information, and requests a court order instructing Mr. Lancaster to pay damages, punitive damages, restitution, and attorneys’ fees and costs for his allegedly unlawful actions. This is probably not the last word on this trade secret dispute so watch this space for additional reports.