No company should ever overlook the value of trade secrets. Those that do rarely achieve or maintain market dominance. One company that has undoubtedly achieved market dominance is Apple, which in late 2020 achieved a market capitalization that eclipsed $2 trillion. One reason for Apple’s dominance is its legendary protection of its intellectual property, including its trade secrets. One former veteran product designer found out just how serious Apple is about protecting its trade secrets when Apple recently filed a trade secret misappropriation lawsuit against the designer and his new employer alleging that the former product designer 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 former product design architect being accused of trade secret theft is Simon Lancaster who worked at Apple for more than 10 years and helped design the MacBook Pro that is nearly ubiquitous at coffee shops and college campuses across the country. The lawsuit accuses Lancaster of selling trade secrets and details concerning unreleased Apple products to an unnamed journalist in exchange for publicity for his own start-up company.
According to the Complaint, Lancaster used his seniority and position of trust to gain access to internal meetings and documents outside the scope of his job responsibilities that contained Apple’s trade secrets. He then allegedly fed those trade secrets to a journalist who published the insider information citing an unnamed “source at Apple.” The lawsuit does not reveal the identity of the journalist.
In return for access to Apple trade secrets, the Complaint alleges, the journalist provided benefits to Lancaster including providing media coverage for a start-up company in which Lancaster had invested. The lawsuit provides further details about the alleged relationship between Lancaster and the journalist alleging that Lancaster even recruited the journalist to serve as his personal investigator and explore a rumor that could prove harmful to Lancaster’s start-up.
The journalist allegedly asked Lancaster to obtain additional information concerning an unannounced project that Apple refers to internally as “Project X.” Lancaster allegedly attended a meeting about “Project X” specifically for the purpose of gathering more intel on the project to pass along to the journalist even though Lancaster had already submitted his resignation to Apple. Lancaster allegedly attended the meeting despite being instructed by other employees not to and being warned during the meeting that he should not be there. The lawsuit further alleges that the journalist provided Lancaster with a list of documents to obtain before leaving Apple. Lancaster allegedly used his Apple credentials to download confidential information almost up until the moment his employment ended at midnight on November 1, 2019.
The alleged trade secret misappropriation came to light after Apple conducted an investigation of Lancaster’s Apple-issued devices. That investigation allegedly disclosed that Lancaster and the journalist had numerous communications concerning specific Apple trade secrets sought by the journalist, and that Lancaster had taken steps to obtain additional trade secret information which the journalist requested. The trade secrets that Lancaster allegedly stole and shared with the journalist include details about unreleased Apple hardware products, unannounced changes to certain features of existing hardware products, and future product announcements. The lawsuit asserts claims that Lancaster violated both the federal Defend Trade Secrets Act and California’s Uniform Trade Secrets Act and also includes claims for breach of an employee confidentiality and intellectual property agreement that Lancaster entered as a condition of his employment.
Although the Complaint goes to great lengths to detail Apple’s efforts to maintain the confidentiality of its secret information, it would appear that these measures failed if the allegations turn out to be true. Despite this, Apple’s swift actions following Lancaster’s resignation should be a lesson to employers. Once the theft of trade secrets has been discovered, employers must act quickly against the misappropriator and third parties who have received the valuable information as well as seeking to recover the leaked information to the extent possible. Having effective confidentiality and contractual post-termination provisions in place will bolster an employer’s position in any trade secret dispute or emergency litigation.
Whether you are a plaintiff or defendant in a trade secret misappropriation lawsuit, it is vital to retain experienced trade secret and business litigation counsel who will be able to determine what evidence is needed and whether an expert witness will be needed to prove misappropriation or damages. The attorneys at Lubin Austermuehle have over thirty years of experience defending and prosecuting trade secret, intellectual property, and complex business lawsuits.
Super Lawyers named intellectual property and commercial law trial attorney Peter Lubin a Super Lawyer and Illinois business dispute attorney Patrick Austermuehle a Rising Star in the Categories of Class Action, Business Litigation, and Consumer Rights Litigation. Lubin Austermuehle’s Illinois business trial lawyers have over thirty years of experience in litigating complex class action, copyright, noncompete agreement, trademark and libel suits, consumer rights and many different types of business and commercial litigation disputes. Our Lake Forest and Elgin business dispute lawyers, civil litigation lawyers and copyright attorneys handle emergency business lawsuits involving copyrights, trademarks, injunctions, TROS, covenant not to compete, franchise, distributor and dealer wrongful termination, trade secret misappropriation lawsuits and many different kinds of business disputes involving shareholders, partnerships, closely-held businesses and employee breaches of fiduciary duty. We also assist Chicago and Oak Brook area businesses and business owners who are victims of fraud. You can contact us by calling at 630-333-0333. You can also contact us online here.