Apple Gains Footing in Court Feud With Former iPhone Chip Architect

[MacRumors]

A former Apple executive who worked on the chips that power iPhones and iPads has had a request to toss a breach-of-contract lawsuit brought by the company rejected by the court in a tentative ruling.

Last August, Apple sued its former A-series chip lead, Gerard Williams III, for breach of employment contract. Williams was the lead designer of Apple's custom ?iPhone? and ?iPad? chips from the A7 to A12X, before he departed the company in March 2019 to start his own chip company, Nuvia Inc, with two other former Apple chip executives.

Apple accuses him of breaching the contract because it barred him from planning or engaging in any business activities that are "competitive or directly related to Apple's business or products." Williams argues that a provision in the contract conflicts with a California law that allows workers to develop new businesses while they're employed elsewhere.

However, Bloomberg today reports that Santa Clara County Superior Court Judge Mark Pierce said the law doesn't permit an employee "to plan and prepare to create a competitive enterprise prior to termination if the employee does so on their employer's time and with the employer's resources."

The judge also dismissed a claim by Williams that Apple invaded his privacy by reviewing text messages he wrote to coworkers that were critical of the company. In one of the messages, Williams is said to have claimed that Apple would have "no choice but to purchase" his new company.

Williams sought to have those texts excluded as evidence in the suit. Pierce disagreed. "There are no allegations in the complaint establishing that the text messages were obtained as the result of eavesdropping upon or recording a confidential communication," he wrote.

The judge sided with Williams in dismissing Apple's bid for punitive damages, saying the company has failed to show how Williams intentionally tried to harm Apple by being disloyal.

Bloomberg notes that the tentative ruling regarding the California law doesn't address the merits of Apple's claims, but it will allow the company to proceed with pretrial information-sharing if the judge decides to make it final.

Claude Stern, Williams' lawyer, said he would contest the judge's findings at a hearing in San Jose on Tuesday. He argues that Williams can't be sued for simply coming up with a new business idea while working at Apple, as opposed to taking inventions he worked on that belong to his previous employer.

Article Link: Apple Gains Footing in Court Feud With Former iPhone Chip Architect

 

[ksec]

The judge also dismissed a claim by Williams that Apple invaded his privacy by reviewing text messages he wrote to coworkers that were critical of the company.

I wonder what those were

I guess William was trying to push Apple to develop their own ARM CPU for Desktop and Laptop. And somewhere along the line management refuse. He was fed up so he pulled people to form a new company developing it.

( I would be very surprised if the sale of Intel modem unit did not include some sort of agreement with one or two years of guarantee to continue purchase Intel CPU )

Judging from the comment "forcing Apple to buy it" I think he kind of knew they were destined to be acquired anyway. Even Qualcomm failed to gain traction in the Server ARM market. And Amazon are going on their own, just shows the ARM Server Design ( Neoverse ) is good enough as it is.

Cant wait to see more interesting details to be revealed in court

 

[2979382]

"if the employee does so on their employer's time and with the employer's resources" This is common sense, what was this guy thinking?!? Anything done on company property with company resources unless otherwise agreed, is under the sole ownership of said company. This is why I never take my work laptop home, so that I avoid mistakenly working on a personal project on company resources.

 

[ersan191]

I feel like this dude could have just asked for a raise and avoided all this nonsense.

 

[Alex.Roams]

I feel like this dude could have just asked for a raise and avoided all this nonsense.

My thoughts exactly. Wasn’t this guy making enough money? What a ridiculous scheme. And this is supposed to be a smart dude.

 

[WannaGoMac]

I am sure he was making a TON of money between his salary and stock options. Yet, that was not enough and he had to scheme to make even more via a startup that Apple would have to buy.

 

[frou]

From what I've read, the guy seems really arrogant. I mean I guess he has reason to be if he was responsible for the A7 to A12X, but you gotta check yourself before you wreck yourself!

 

[throwaway2020]

Apple has always been bad with pay. These thoughts should NOT enter the mind of an employee, especially one as critical as your lead chip designer. Simply paying them 350k and throwing in a million in stock won't cut it. These guys are making you billions of dollars a quarter. wtf is Apple doing.

 

[Jyby]

Science Rules!

 

[nt5672]

I think it was more of an influence issue, Williams got shoved around too much and he knew that Johnny Ives started his own company and consults with Apple... Maybe he wanted to copy that strategy. Sounds like “Apple will have to buy us” was the real story.

And trashing your main customer or potential buyer has never been a winning strategy. Bet that Ive was smart enough not to do that!

 

[astroboy888]

This is an interesting case. Apple claims that Williams breached non-compete contract by starting his own company. But in fact Nuvia, Williams new company is building server chips which does not compete directly against any of Apple's products.

I guess Apple has to demonstrate in court that Nuvia completes directly against Apple, which means they have to show that they are building server chips for external consumption? Otherwise, I can't see how this case can stand.

Maybe there will be more details coming out.

 

[Canada420]

Apple under Tim Cook has produced more legal wins than it has innovative products. This is the way.

 

[incoherent_1]

Good ruling. In general, I think Non-compete Clauses (particularly in tech, where they are now rife) are ridiculous, but yeah you can’t show up to work and use your company’s resources and time to build a competing company. That’s insane.

 

[Cobalt50]

That first sentence is painful.

 

[avvpiras]

I’m an italian lawyer. I can’t understand how Judge Mark Pierce could pretend that Apple show how Williams intentionally tried to harm Apple giving that he (the Judge) had yet as evidence the text message where Williams claimed that Apple would have no choice but to purchase his new company.

 

[macgician]

I was looking at their website and leadership team seems to have good talents. Good luck!

 

[dwaite]

I wonder what those were

I guess William was trying to push Apple to develop their own ARM CPU for Desktop and Laptop. And somewhere along the line management refuse. He was fed up so he pulled people to form a new company developing it.

Nuvia's stated mission is just server CPUs, isn't it?
[automerge]1579537387[/automerge]

This is an interesting case. Apple claims that Williams breached non-compete contract by starting his own company. But in fact Nuvia, Williams new company is building server chips which does not compete directly against any of Apple's products.

I guess Apple has to demonstrate in court that Nuvia completes directly against Apple, which means they have to show that they are building server chips for external consumption? Otherwise, I can't see how this case can stand.

They are showing that Williams created the company with Apple resources, because non-compete contracts are not enforceable in California

 

[ikramerica]

Just because Apple isn’t shipping home brew server CPUs doesn’t mean there isn’t an R&D pipeline that is developing them. So he may be competing with Apple directly regarding their internal roadmap, thus the claim Apple will need to buy his company, and one assumes rehire him at a higher salary and more senior position.

 

[dwaite]

Just because Apple isn’t shipping home brew server CPUs doesn’t mean there isn’t an R&D pipeline that is developing them. So he may be competing with Apple directly regarding their internal roadmap, thus the claim Apple will need to buy his company, and one assumes rehire him at a higher salary and more senior position.

This would imply Apple wants to re-enter the physical server market, which I doubt. The rack-mountable Mac Pro is I think as close as they will come - and IMHO it isn't meant to be a server as much as it is meant to be usable for things like video rack stacks.

 

[AtomicDusk]

I think it was more of an influence issue, Williams got shoved around too much and he knew that Johnny Ives started his own company and consults with Apple... Maybe he wanted to copy that strategy. Sounds like “Apple will have to buy us” was the real story.

That makes sense to me as well. Any bet that Johnny Ives was up front with his desire to spin off? Like "Hey Tim, I love  but I want to design for myself too." I mean having a direct line to the CEO helps in a case like this, but there are ways to do it and there are ways to not. This case definitely seems more like the not.

 

[techwhiz]

The company is building CPU's.
The only thing I can imagine them saying is that the business plan and idea were developed on Apple time.
This business isn't a competing business.
It doesn't have a shipping product and they are trying to hire engineers to develop the silicon.

Non-compete agreements have no merit in Ca. because they have been deemed to be against the public interest. They are only enforceable if a company plans to pay to bench you. IBM did just that a few years ago to keep an executive from going to a competing company.

Showing that he spoke ill of the company might be grounds for firing but nothing else.
They will need to prove, not that he developed the idea while working at Apple, but he used company resources.

Apple's business plan is not selling chips to the general market. They can possible claim they are damaged by a product that people can use that have a performance advantage over Apple, but that is a big stretch.

 

[Gasu E.]

These thoughts should NOT enter the mind of an employee, especially one as critical as your lead chip designer. Simply paying them 350k and throwing in a million in stock won't cut it. These guys are making you billions of dollars a quarter. wtf is Apple doing.

You talk as if the "lead chip designer" is the only one making the company successful. Speaking as a former tech insider: these talents are rare, but far from unique. And as "lead" ship designer, most likely 80% of his contribution is in managing the designers who are doing the ACTUAL work. Guys with these titles can be replaced, at market prices. But more power to him if he wants to go and accept the risk of running his own company-- risks he avoided while working as a sheltered Apple employee.

 

[hudson1]

My thoughts exactly. Wasn’t this guy making enough money? What a ridiculous scheme. And this is supposed to be a smart dude.

John Rockefeller was once the wealthiest person. Someone asked him "How much is enough?". Rockefeller's response was something along the lines of "Just a little more."

 

[mi7chy]

Nice that it's legal for an employer to enslave you then stab you in the back when you try to leave and make it on your own. More interesting is the exodus of top talent because no one wants to work under that clown Tim Cook.

 

[Khedron]

How did Apple get access to the private text messages?