A federal judge has allowed Apple’s breach-of-contract claim against former Apple Watch engineer Chen Shi—and related trade-secret claims—to move forward. The September 30, 2026, ruling in Apple Inc. v. Chen Shi et al. is a decision about whether Apple’s allegations are plausible enough to proceed, not a finding that Shi or the other defendants stole information or are liable.
What the judge decided
U.S. District Judge Eumi K. Lee denied the defendants’ motions to dismiss Apple’s second amended complaint in Apple Inc. v. Chen Shi et al., No. 25-cv-07105-EKL, in the U.S. District Court for the Northern District of California. The ruling leaves Apple’s claims in the case at the pleading stage; it does not decide the ultimate merits.
Apple’s contract claim is against Shi. It is based on a confidentiality and intellectual-property agreement he signed while employed by Apple. The court concluded Apple plausibly alleged that Shi breached the agreement by disclosing proprietary information to other defendants.
Why the trade-secret claims can proceed
The order also denied dismissal of Apple’s claim under the federal Defend Trade Secrets Act. Judge Lee found that Apple had identified particular sensor-related technology and specific files, rather than relying only on broad, generic categories, and had plausibly alleged that at least one trade secret existed.
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The court further found Apple plausibly alleged that Zijing Zeng knew Shi was obtaining information in violation of his confidentiality obligations and encouraged its disclosure to Oppo and InnoPeak. That conclusion permits the claim to continue; it does not establish what Zeng knew or did as a fact.
Why the agreement was not treated as a ban on working
Shi argued that his agreement was void under California law as an unlawful restraint on his profession. The judge rejected that argument at this stage. On its face, the agreement did not prevent Shi from working in health sensing or for Oppo or InnoPeak; it prohibited the use or disclosure of proprietary information.
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Judge Lee wrote that California Business and Professions Code Section 16600 “evinces a settled legislative policy in favor of open competition and employee mobility,” but “it does not permit departing employees to take their former employer’s trade secrets with them.”
The distinction is between restricting a person from competing or taking a job and enforcing an obligation not to use or disclose protected information. The ruling addresses the agreement as presented in this case, not every possible employment restriction.
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What Apple alleges—and what remains unproven
According to Apple’s complaint, as recounted in the court’s order, Shi downloaded 63 documents from a protected Box folder three days before leaving Apple and transferred them to a USB drive the day before his departure. Apple also alleges that Shi met with Apple Watch technical staff to learn about work on optical, temperature, and ECG sensors, and later presented some information to hundreds of Oppo and InnoPeak engineers.
Apple alleges it invested hundreds of millions of dollars to improve Apple Watch features and services. These figures and events are allegations reproduced in the order, not findings the court verified. The defendants contest Apple’s allegations.
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A motion-to-dismiss decision generally tests whether a complaint’s well-pleaded allegations, taken as true for that limited purpose, state claims that may proceed. Judge Lee did not find that Shi downloaded or disclosed the files, that the information ultimately qualifies as a trade secret as a matter of fact, or that Shi, Zeng, Oppo, or InnoPeak is liable.
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The order directed each defendant to file a responsive pleading by October 21, 2026. The ruling therefore moves the dispute beyond the dismissal stage, but the allegations still need to be resolved through the case. Developments after that deadline are not established by the cited order.
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