Well-funded augmented reality startup Magic Leap filed a lawsuit against competing startup Nreal and its founder Chi Xu.
The suit alleges that Chi Xu worked at Magic Leap as a software engineer between July 2015 and August 2016 and that he signed “a Proprietary Information and Inventions Agreement (‘PIIA’) that contained a broad proscription against the improper use or disclosure of any of Magic Leap’s confidential and proprietary information during or after his employment.” Then he left and founded Nreal with contacts in China, the suit alleges, and he “wrongfully used and disclosed to Nreal and its collaborators the confidential and proprietary information to which he obtained access as a former Magic Leap employee.”
We’ve uploaded the full complaint filed in the United States District Court Northern District of California and you can read it as a PDF here. I reached out to Chi Xu for comment via direct message on a LinkedIn account matching his name.
“Mr. Xu used his knowledge of Magic Leap’s Confidential Information, including but not limited to the Confidential Designs, to make production and design decisions at Nreal and to guide the development of spatial computing products intended for sale,” the suit alleges. “The resulting product, as demonstrated at CES and on publicly available videos, bears a striking similarity to the Confidential Designs that Magic Leap had under development before and during the time that Mr. Xu worked at Magic Leap, but which were not ultimately commercialized or publicly released. Whereas Nreal purported to develop its Nreal Light product in under two years, Magic Leap developed its technology after extensive investment of time (multiple years), money (hundreds of millions of dollars spent on research and development) and human resources (hundreds of engineers).”
A video below from the MRTV channel is referenced several times in the complaint wherein “Mr. Xu asserted his view that Magic Leap is ‘too ambitious’ and ‘trying just a little bit too hard,’ and he characterized Magic Leap’s product development strategy as follows: ‘in some way, they are trying to build something that can replace a cell phone in the first generation, which is kind of like mission impossible.’ Mr. Xu continued with his characterization of Magic Leap’s product development strategy, saying ‘[t]hey are trying to bundle pretty much everything in the [device] making that bigger and bigger.’ While Mr. Xu attempted to differentiate the Nreal Lite from Magic Leap’s products currently on public sale, in reality, the Nreal Light incorporates and derives from the Confidential Designs and other Magic Leap Confidential Information protected by the PIIA.”
Magic Leap’s lawsuit also points to similarities in the fonts used by the companies.
We’ll bring you updates as this news develops.