Intel sues former engineer for stealing trade secrets to help Microsoft

Dr Varun Gupta allegedly transferred 3,900 confidential documents, including details on Xeon CPUs, to two personal hard drives

Intel logo on Xeon web page under a microscope

Intel has sued one of its former employees for stealing thousands of confidential documents and sharing them with Microsoft after joining the firm to give his new employers a competitive advantage in negotiations.

Having worked at Intel for ten years, Dr Varun Gupta copied 3,900 internal documents across to two portable hard drives on his last day, before later sharing them with Microsoft, Intel has alleged in filings with the Oregon District Court.

These documents contained confidential information and trade secrets, including pricing structure and strategies as well as the manufacturing capabilities of Xeon processors, among other pieces of intelligence. 

The Xeon processor is deployed in systems around the world for use in data centres, cloud computing and data analytics, providing support for applications such as artificial intelligence (AI) and high-performance computing (HPC). 

“Gupta flagrantly flouted Intel’s confidentiality policies, his employment agreement, and the law,” Intel claims in its lawsuit. “He misappropriated Intel’s confidential information and trade secrets. He deployed that confidential information and those trade secrets in negotiations against Intel, harming Intel’s negotiating position in the process. 

“And when Intel began to discover his misappropriation, he provided false and/or misleading information about the nature and scope of his taking and use of Intel’s confidential information and trade secrets, attempting to obfuscate Intel’s extensive efforts to protect this information from further use or dissemination.”

The former Intel product marketing engineer voluntarily resigned in January 2020 and joined Microsoft four days later as the principal of strategic planning in its cloud and AI division. Dr Gupta used the stolen information, it’s alleged, in head-to-head negotiations with Intel concerning customised product design and pricing for huge volumes of Xeon processors. 

As an Intel customer, Microsoft set out to negotiate the most advanced technical features at the lowest achievable price. Since the former employee had obtained information on Intel’s technical and manufacturing capabilities, as well as marketing and pricing strategies, the company claims this handed Microsoft an unfair advantage.

The firm claims in its lawsuit that Dr Gupta violated federal and local laws, as well as his contractual obligations when he copied across the documents to his hard drive, before using the information against Intel.

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During negotiations between Intel and Microsoft, the chipmaker was alerted to Dr Gupta’s “conduct” and launched an investigation to determine whether he may have stolen trade secrets. 

With the assistance of Microsoft, Intel determined the extent of the theft, as well as how frequently he accessed the cache during his time at Microsoft to aid in negotiations. They learned that he had accessed these files 114 times.

Dr Gupta still has possession of one hard drive that investigators haven’t yet found, the filings also claim, which Intel believes includes further trade secrets that haven’t yet been used against the company.

Intel is demanding an injunction against Dr Gupta from releasing or using the remaining files he may yet have in his possession, while also demanding financial compensation for the damages caused by Gupta’s alleged misconduct. 

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