Court Refuses to Toss Apple's Suit Against Data Center Chip Startup Founder

Robert Burnson (Bloomberg) -- A former top chip engineer at Apple Inc. may have a hard time shaking off a breach-of-contract lawsuit the iPhone maker filed against him after he quit and launched his own data center processor company.

Gerard Williams III helped lead development of the chips used to power iPhones during his decade as a platform architect with Apple before he founded Nuvia Inc. last year. Williams contends a provision in the contract he had with Apple conflicts with a California law that allows workers to develop new businesses while they are employed elsewhere.

But in a tentative ruling rejecting his request to toss the suit, 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. 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.

Related:Ex-Apple Exec Who Started Data Center Chip Firm Says He Was Snooped On

Pierce sided with Williams in rejecting Apple’s bid for punitive damages, saying the company hasn’t shown that the engineer intentionally tried to harm his former employer by being disloyal.

While the ruling doesn’t address the merits of Apple’s claims, it will allow the company to proceed with pretrial information-sharing if the judge makes it final.

Claude Stern, an attorney for Williams, plans to contest the judge’s findings at a hearing Tuesday in San Jose. Stern said he’ll argue that Williams can’t be sued simply for coming up with an idea for a new business while at Apple, as opposed to taking inventions he worked on that belong to his previous employer.

The attorney also noted the judge’s conclusion that Apple’s intellectual property agreement with Williams “arguably” violates California law by forbidding him from soliciting the company’s employees even after he left his job.

“Gerard steadfastly denies any of the allegations in the complaint,” Stern said in a phone interview.

Williams left Apple in February before starting Nuvia that same month with other former Apple developers. He was “chief architect” for Apple’s chips for its mobile devices. His new company is developing processors for use in data centers. In November, Nuvia exited stealth mode and announced funding worth $53 million.

The case is Apple Inc. v. Williams III, 19-cv-352866, California Superior Court, Santa Clara County (San Jose).