AI startup accuses Facebook of misappropriating trade secrets
An artificial intelligence (AI) startup has accused Facebook of hiring an employee, having him share the startup’s “secret sauce” trade secrets and then offering this technology as open-source code.
Neural Magic filed its suit against its former technology director Aleksandar Zlateski and Facebook on Wednesday, March 4 at the US District Court for the District of Massachusetts.
The suit claimed that Zlateski had shared with Facebook Neural Magic’s “secret sauce”—its computer algorithms which have the “potential to revolutionise” the field of AI.
“In December 2019, Facebook announced that it had published to the world—as open-source—a compiler that, investigation would later reveal, includes the same proprietary algorithms that form the heart of Neural Magic’s technology and IP,” added the AI startup.
Co-founded by Massachusetts Institute of Technology (MIT) professor Nir Shavit and MIT research scientist Alex Matveev in 2017, Neural Magic is based in Somerville, Massachusetts.
“As technology director at Neural Magic, Zlateski had access to all of Neural Magic’s trade secrets, confidential, proprietary information, and business plans for the future. And, critically, he had access to and helped author the software for one of Neural Magic’s prized jewels: the source code of its compiler that encapsulates Neural Magic’s ... algorithms,” said the claim.
According to Neural Magic, Zlateski (who was Neural Magic’s first employee) left the company after almost a year and a half to take up a position at Facebook.
He allegedly assured the startup that the technology he would be developing wouldn’t be related to his work at Neural Magic. “That trust was misplaced,” said the startup, claiming that Zlateski had breached the non-disclosure and non-competition agreement he signed with the company.
In January, counsel for Neural Magic sent letters to both Facebook and Zlateski identifying the offending publication and asking for its removal, pending investigation and further discussion.
But according to Neural Magic, counsel for Facebook and Zlateski “flatly refused to take down the code or agree to cease further use” of Neural Magic’s proprietary and confidential information.
Neural Magic is also concerned that Zlateski might disclose even more to Facebook, such as “trade secret techniques used by Neural Magic to run fully connected neural networks and convolutional neural networks at speed and to speed up the training of such networks”.
The startup is seeking punitive damages and an injunction against both Zlateski and Facebook prohibiting any further use of Neural Magic’s trade secrets.
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