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Business News/ Companies / News/  Apple accused of ‘trying to thwart emerging startups through anticompetitive measures’
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Apple accused of ‘trying to thwart emerging startups through anticompetitive measures’

Chip startup Rivos has countersued Apple, claiming that Apple's employment agreements are unenforceable and stifle competition.

Apple CEO Tim Cook attends a launch event at Apple Park in Cupertino, California, on September 12, 2023. (Photo by Nic Coury / AFP) (Nic Coury / AFP)Premium
Apple CEO Tim Cook attends a launch event at Apple Park in Cupertino, California, on September 12, 2023. (Photo by Nic Coury / AFP) (Nic Coury / AFP)

Chip startup Rivos Inc. has filed a countersuit against technology behemoth Apple. The lawsuit, submitted to a federal court in San Jose, comes on the heels of Apple's own legal action against Rivos and six of its former employees.

While Apple alleges that these individuals, upon joining Rivos, stole company secrets to develop chips, Rivos is fighting back. Their counter-legal action claims that Apple's employment agreements are far-reaching to the extent of being unenforceable.

The crux of Rivos' argument is that Apple is illegally curbing its employees' ability to move to other firms, essentially choking the growth of emerging startups. This move, they say, is a bid to eliminate any form of legitimate competition in the market. Apple has yet to issue a public statement on the matter, Bloomberg reported.

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At the centre of this legal dispute is the system-on-chip technology, a component that integrates several computer elements into one compact chip. Apple has invested billions into the development of this technology, which enhances the performance of its devices. However, Rivos accuses Apple of using non-disclosure and non-solicit agreements to unjustly retain proprietary knowledge and staff.

Further complicating the issue is Rivos' claim that Apple's Intellectual Property Agreement, which every employee must sign, is so expansive it even prevents the employee from utilising knowledge gained during their tenure. The agreement includes a clause aimed at inhibiting employees from moving to competing firms, an action Rivos says is effectively stifling competition.

“Apple has resorted to trying to thwart emerging startups through anti-competitive measures, including illegally restricting employee mobility," Bloomberg quoted Rivos as saying in its countersuit.

Also Read: Apple surpasses Samsung to become largest smartphone exporter from India by volume

Apple previously took similar legal action against Gerard Williams III, co-founder of chip startup Nuvia Inc., alleging trade secrets theft. However, the court eventually dismissed the claims against Williams. Rivos asserts that Apple is applying the same tactics used against Nuvia to their case.

This is not the first time Apple's trade secret claims have been brought into question. In August, US District Judge Edward Davila threw out the company’s allegations against Rivos, although Apple was allowed to file a revised complaint.

The ongoing case is currently under review by the U.S. District Court in the Northern District of California, San Jose. The outcome could set a precedent affecting not just these companies, but potentially the broader tech industry and labour mobility within it.

(With Bloomberg inputs)

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Sounak Mukhopadhyay
Sounak Mukhopadhyay, who also goes by the name Sounak Mukherjee, has been producing digital news since 2012. He's worked for the International Business Times, The Inquisitr, and Moneycontrol in the past. He's also contributed to Free Press Journal and TheRichest with feature articles. He covers news for a wide range of subjects including business, finance, economy, politics and sports. Before working with digital news publications, he worked as a freelance content writer.
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Published: 24 Sep 2023, 01:40 PM IST
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