Judge orders Meta to face jury over trade secrets allegations
Startup claims Meta stole computer code through former employee | Trial is set for September | Alleged secrets relate to machine-learning based neural networks.
Meta will face a jury trial over allegations of stealing trade secrets from startup Neural Magic, after its bid to have the case thrown out was rejected by Massachusetts district court on Monday, February 6.
The social media giant is being sued by the startup over claims that it stole confidential information about algorithms that streamline complex computer processes. Neural Magic says that its former employee, a computer scientist, gave the code to Meta when he joined the firm.
According to the lawsuit, Neural Magic may have lost as much $766 million in royalties over the alleged trade secrets breach.
The computer code, which forms the “heart” of Neural Magic’s technology, covers machine-learning based neural networks—systems that mirror the way a human brain learns by experience.
Usually, these networks need to be run by Graphic Processing Units (GPU) which are large and expensive. However, Neural Magic developed algorithms that allowed neural networks to run at GPU speeds on Central Processing Units (CPUs) which are standard in most computers.
Employment contract
Neural Magic hired a computer scientist in 2018 and says that his employment contract included non-disclosure and non-competition provisions. The employee left the firm for Meta in 2019, and according to the lawsuit, shared a code file with Meta engineers that amounted to trade secrets belonging to Neural Magic.
The code was then posted to online software development platform GitHub.
Meta claims that “no reasonable jury could find Meta knew or had reason to know that [the engineer’s] conduct was improper”. It argues that he is a “computer scientist of impeccable credentials”, “the optimisations in dispute were well-known” and that Meta was unaware of his contract with Neural Magic until after the alleged misappropriation.
However, District Judge Denise Casper said that Meta “at least should have known that many of its new hires were subject to such agreements”. She concluded that there was sufficient evidence to put the case to a jury.
Neural Magic was founded in 2017 by research scientists Nir Shavit and Alexander Matveev. It is based in Cambridge, Massachusetts.
The trial is set to begin in September, according to Reuters.
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