In an era where trade secret misappropriation battles can shape corporate landscapes, the Apple v. Rivos case stands as a stark reminder of the importance of diligent onboarding practices when it comes to trade secrets.  In this case, the court’s scrutiny of employee conduct underscores a crucial lesson: companies should ensure that new hires refrain from carrying confidential information from their previous employers. As exemplified by defendant Rivos, making an effort to remind new hires to avoid retaining confidential information can also go a long way.Here, we discuss the intricacies of the Apple v. Rivos case and provide several takeaways.

Background

The conflict emerged in 2022 when Apple accused former employees, who had joined Rivos, of misappropriating proprietary system-on-a-chip (“SoC”) design information. Rivos is a “stealth-mode” startup—a company that operates in a low-profile, secretive manner, keeping its innovations and developments under wraps until launch—founded to design and market SoCs.  At the time Apple filed its complaint, nearly fifty of its employees had left to join Rivos. 

Apple’s complaint included claims for trade secret misappropriation under the Defend Trade Secrets Act (DTSA) against Rivos and several of Apples former employees as well as claims for breach of contract against the former employees for retaining confidential information after termination of their employment with Apple. In response, Rivos and the former employees counterclaimed that Apple employed illegal measures to intimidate employees contemplating leaving the company in violation of Section 17200 of the California Business and Professional Code.

Read the full post on Proskauer’s Minding Your Business blog.