Google-Backed Magic Leap Alleges Workers Stole Its Secrets

The allegations of betrayal and skullduggery surfaced in a lawsuit that Magic Leap filed late Thursday in federal court after the two workers, Gary Bradski and Adrian Kaehler, sued the company for wrongful termination earlier this week. An attorney for Bradski and Kaehler denied the company's allegations.

The legal tussle over intellectual property and stock options highlights the rising stakes in artificial reality as more technology companies bet it will produce the industry's next big breakthroughs.

Since its inception six years ago, Magic Leap has emerged as one of artificial reality's most intriguing startups while raising $1.4 billion from a list of investors that include Google and China's Alibaba Group. The last round of financing completed earlier this year valued the Dania Beach, Florida, company at $4.5 billion, even though it hasn't released a product yet and hasn't even disclosed a timetable for doing so.

Magic Leap instead has released videos providing tantalizing glimpses at what it's working on: a pair of goggles that will project three-dimensional, life-like images within the real world. The company describes the technique as "mixed reality," although it's known as "augmented reality" through most of the technology industry.

Other headsets, such as Facebook's Oculus Rift, that immerse users in a completely fabricated world are examples of what's known as "virtual reality."

Whatever its technology is called, Magic Leap has enthralled the media with its demonstrations and the pedigree of its backers.

In a recent cover story, Wired magazine hailed Magic Leap as "the world's hottest startup." Google, now part of Alphabet Inc., has become so intertwined with Magic Leap that its CEO, Sundar Pichai, sits on the startup's board.

But the battle with two of the 85 employees located in its Mountain View, California, office threatens to drag Magic Leap into the mud.

Jack Russo, the lawyer representing Bradski and Kaehler, said the wrongful termination suit filed against Magic Leap will prove the company tried to wrest away employee stock options worth millions of dollars without a valid reason. He predicted the evidence will make other top engineers reluctant to work for Magic Leap.

Russo also painted an unflattering picture of Magic Leap CEO Rony Abovitz. Russo said Abovitz went into a "fit of rage" after Bradski and Kaehler tried to negotiate "consulting freedom" clauses in their contracts.

Magic Leap declined to comment on Russo's statement or the wrongful termination suit.

In its federal lawsuit, Magic Leap depicts Bradski and Kaehler as traitors who schemed on company time for at least a year while planning their own artificial reality startup. While doing so, Bradski and Kaehler stole some of Magic Leap's patented technology and also shared some of the secrets with outsiders, while mining the company's business connections as they tried to launch their startup, the suit alleges.

The lawsuit alleges the duo's duplicity involved "some deep learning techniques utilizing robotics."

Bradski is a robotics expert hired by Magic Leap in 2013 to serve as its senior vice president of advanced perception and intelligence. Kaehler also was hired in 2013 and reported to Bradski, most recently working as a vice president of special projects.