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Magic Leap Says Ex-Engineer Copied Headset for China

177 points by guyhance 7y ago

ETHisso2017 7y ago
>Magic Leap alleges that Chi Xu, who left in 2016, exploited its confidential information to “quickly develop a prototype of lightweight, ergonomically designed, mixed reality glasses for use with smart phones and other devices that are strikingly similar” to the Florida-based startup’s designs. >The startup alleges that Xu plotted during his roughly 13 months working there to launch his own competing company in China and “neglected his work duties” to acquire proprietary information. While these are valid allegations to make, I'm not sure what IP "theft" has occurred. It sounds like Magic Leap is accusing Chi of looking at Magic Leap's designs and having the intention of launching a product in the same market and with roughly the same form factor - but crucially, does not allege that Chi exfiltrated any CI/trade secrets or infringed on any IP. The second set of accusations is also kafkaesque, by the way, as they are accusing Chi of having the intent to launch a competing company by himself - something that many, many tech employees have dreamed of (and done) without ever being sued. I'm not sure what that allegation is there for, honestly.
- pvg 7y ago
  but crucially, does not allege that Chi exfiltrated any CI/trade secrets or infringed on any IP Their complaint alleges exactly that, repeatedly.
  - paxys 7y ago
    Nowhere in the complaint do they ever mention a single specific bit of technology, code, design or patent stolen by Chi Xu. Their entire argument is that he signed a confidentiality agreement when he started working there so should not be able to start a competing company. This is going to be next to impossible to enforce in California, let alone China.
    - NicoJuicy 7y ago
      And that their design is very similar to an internal confidential prototype. Which says more about the situation.
    - pvg 7y ago
      The comment I'm replying to says that they don't allege he improperly took their confidential information. This isn't an accurate representation of their allegations. They do allege that, over and over. I don't have any opinions on (or much interest in) the merits of their case, but "they don't even say he took their CI" is not true. They quite plainly do. They say things like: "in reality, the Nreal Light incorporates and derives from the Confidential Designs and other Magic Leap Confidential Information protected by the PIIA."
    - gamblor956 7y ago
      A complaint isn't required to allege specific IP stolen. It's to allege general categories of IP stolen. Too much specificity limits the scope of the complaint and would require an amended complaint if more IP was stolen than originally alleged. The next stage of the litigation process, discovery, is for determining the specific IP pilfered (if any).
    - bstar77 7y ago
      How are they supposed to know the extent of what was stolen without seeing the source code from the offending product? The reality is that a relatively insignificant employee up and left and had a competing product out the door in a very short period of time. Everything points to him stealing as much IP as possible and throwing a competing product together. Seems to be enough probable cause to justify an investigation.
- deleted 7y ago
  [deleted]
phonon 7y ago
Read the complaint here https://www.courtlistener.com/docket/15787938/1/magic-leap-inc-v-xu/ https://www.courtlistener.com/docket/15787938/1/magic-leap-i...
- dmix 7y ago
  Summary of the evidence presented in the complaint: 1) Using the same proprietary font in their logo was a really dumb idea: > https://i.imgur.com/7pYZ8bp.png https://i.imgur.com/7pYZ8bp.png 2) Alleges he engaged in internal meetings "outside the scope of his work at Magic Leap" in order to gain useful information, while simultaneously neglecting his duties at work as he planned to start his own company in China. Before launching a product that looks and functions very similar to the Magic Leap product within a 2yr timespan (quitting in mid-2016, started in 2017, launched in 2019) while Magic Leap has been at it since 2010. 3) Their primary evidence seems to be some useless "Private Information" confidentiality form we all sign 4) The other is some Youtube interview the Nreal founder did where he openly admitted to being inspired by his work at Magic Leap: https://www.youtube.com/watch?v=rcPB4POYkpc https://www.youtube.com/watch?v=rcPB4POYkpc Where he basically said that Magic Leap was being too ambitious with an "impossible" goal of trying to put it all in one small device... and he wanted to utilize Chinese manufacturing pipelines to build the same thing but much simpler by utilizing existing smartphone and laptop tech. 5) Finally another section compared demos by both companies, both involving whales: Magic Leap's whale demos: > https://www.youtube.com/watch?v=LM0T6hLH15k https://www.youtube.com/watch?v=LM0T6hLH15k > https://www.youtube.com/watch?v=PyCoTzRzHxo https://www.youtube.com/watch?v=PyCoTzRzHxo Nreal's twitter picture demo: > https://i.imgur.com/jPIGMkf.png https://i.imgur.com/jPIGMkf.png That's about it. Points 2) and 3) get repeated ad-nauseam and not very convincingly IMO.
  - bflesch 7y ago
    Why on earth does a pre-revenue startup need a proprietary font design?
    - mondoshawan 7y ago
      I asked this very same question while I was there during its development. The answer was "its a badge of honor". Ugh.
xparco 7y ago
Magic Leap is a disgusting company. Rony is abusive and already has staff that sexually harasses people. This company needs to be shutdown and Rony needs to be put in IDF to lose some weight.
ricardobeat 7y ago
Shouldn't they be busy building a product that people want instead?
- daenz 7y ago
  I can't help but think that insiders who knew the product was doomed to fail are breathing a sigh of relief that the blame for the killing blow won't land on them.
dirtyid 7y ago
Nreal optical hardware is closer to ODGs and very different to Magic Leap. Magic Leap acquired ODG patent portfolio recently (after effectively killing them via some backstabby acquisition shenanigans) and is now opportunistically patent trolling Nreal and the increasing amount of Chinese competition (Nreal has much better visual quality at a much lower price) using post rationalized accusations given current US-China climate. And on queue, Bloomberg Tech does a Bloomberg Tech on the story.
- krak12 7y ago
  Liar, everyone here know what is the Chinese policy: stole everything, try to make it better. Everywhere you can find this behavior from electric cars to CPUs, to OS ... etc
- iabacu 7y ago
  > and is now opportunistically patent trolling Nreal Are you making this up? I don't see any patent claim being mentioned in the article.
  - scotty79 7y ago
    I think he didn't mean that literally. "Patent trolling" as in extorting someone who successfully implemented some idea just because I have some claim to comming up with vaguely similar idea first.
- NicoJuicy 7y ago
  But the design looked very similar to proptotypes who were confidential. He did more than "inspired by"
- ETHisso2017 7y ago
  Could you elaborate on how Nreal is closer to ODG and different from Magic Leap?
AndrewKemendo 7y ago
Mr. Xu’s misuse and exploitation of Magic Leap’s image and goodwill is further manifested in Nreal’s shameless use of whales in its demo experiences Are we patenting Whales in demos now? This is exactly the kind of myopia ML continues to have - thinking they were the first ones to use a whales in a VR/AR demo. I guess Intel was ripping off ML with Leviathan demo in 2014 [1] and theBlu was ripping off ML with their Vive demo in 2015 [2]. [1] https://ronaldazuma.com/Leviathan_at_CES2014.html https://ronaldazuma.com/Leviathan_at_CES2014.html [1] https://www.youtube.com/watch?v=MFKbL-GU-_U https://www.youtube.com/watch?v=MFKbL-GU-_U
- ETHisso2017 7y ago
  Seriously? Whales in product demos is "image and goodwill" now? In any sane, non Sinophobic climate, this would be laughed out of the room
- fencepost 7y ago
  Well if people are going to start doing things with animated space whales are they crediting Disney (https://m.youtube.com/watch?v=6eS8WUoKeP0 https://m.youtube.com/watch?v=6eS8WUoKeP0)? Perhaps the easy availability of royalty free 3d models is relevant (https://www.cgtrader.com/3d-models/animals/fish/humpback-whale-for-unreal-engine-4 https://www.cgtrader.com/3d-models/animals/fish/humpback-wha...)? Perhaps Oculus Rift museum humpback whale VR back in 2015 was an inspiration?
paxys 7y ago
Magic Leap has raised $2.6 BILLION dollars in funding and have nothing to show for it. Somehow I don't think a random guy in China is what's holding them back.
- wavefunction 7y ago
  That's not what's being alleged though. Seems like a strange take.
- rococode 7y ago
  As other commenter said, this is not really the point of this particular article. But I totally agree. I recently had the opportunity to try to develop (with a team) something for the Magic Leap One over a period of about 3 months, and it was an awful experience, a complete and utter disappointment. Here are just some of the issues we faced: - terrible overheating: we offloaded most functionality (basically everything in our app but image tracking) to a remote server and both the headset and the lightpack would still overheat to the point of being very hot to the touch within 5-10 minutes - image tracking in general pretty much doesn't work: the effective range is like 2 feet, and even then it's laggy and inaccurate. And forget about trying to use your own images. - controller drift: the tracking for the controller literally just starts floating away. We had attached something to the controller and during demos people would say, "woah it's just floating away" and look up as the virtual controller slowly faded into the distance - unexplainable throttling: once it starts overheating, things like image tracking just stop working, apps freeze or shut down, etc. - dizziness: everyone who tried it started feeling eye strain within minutes of wearing it - awful field of view: to put it simply, if you look at someone eye-to-eye, the field of view cannot even show things right above their head - clunky design: the lightpack is heavy and constantly getting in the way, and the cables attaching it to the headset are very stiff - Lumin OS: sucks - controller trackpad: the least functional trackpad I've used in my life. The circular scrolling is incredibly hard to use; our team just dropped the entire scrolling feature for demos because not a single person we trialed with was able to get it to work. Theoretically, it's just a circular motion with your thumb to scroll. In practice, after 3 months of experience using the device I was still unable scroll consistently. - dim screen: like wearing dark sunglasses - heavy headset / awkward weight distribution: it feels uncomfortably heavy on your eyes & nose area And there are many more issues that make it feel more like a prototype made by a couple people in a garage than the flagship consumer product of a company with $2.6b in funding. Really makes me think the whole thing was a big scam, like a slightly less completely-made-up version of Theranos.
mindgam3 7y ago
The optics of this aren't great for Magic Leap. AR pun not intended. Really all this does is present Nreal as a legitimate threat to a company that raised approx 100x more money* before shipping a product. (* Magic Leap funding $2B+, nreal $16M ish)
- khuey 7y ago
  I don't want to take any position on either Magic Leap as a product/company or on this lawsuit, but it's not at all unusual for R&D to cost far more than production. This is how drug development works: someone spends billions researching and developing a drug and gets a temporary monopoly on production. Once competition is allowed and prices are competed down to the marginal cost of production the generics are close to free in comparison to the original branded product. So "Nreal copied Magic Leap's product after Magic Leap sank billion into R&D" is an entirely plausible explanation for the comparable results despite the dramatic gap in funding.
  - mindgam3 7y ago
    I mean, I’m not arguing that there is no plausible explanation for Magic Leap’s inability to ship a product with only $1B in funding. The plausible explanation is that they are running a tech startup like a drug development company, to use your analogy, which is just a terrible way to do startups. AR/smartglasses is not a market where you will have “generics” any time soon. You’re going to have the iPhone of smartglasses which will dominate, and then everyone else will try and fail to copy. Like Facebook dominating social, then google+ failing. Or iPhone vs Android, although Android did finally manage to achieve market share thanks to googles muscle. Tl;dr: successful startups don’t raise billions of dollars before shipping a product as mediocre as ML’s v1.
- briandear 7y ago
  And removing the mistakes made my Magic makes the derivative cost less; Magic used a lot of money figuring out what doesn’t work, money that the competing company did not have to spend. If I make an iPhone copy, I didn’t have to spend all the money Apple spent figuring out what wouldn’t work. So it’s not an apples to apples comparison.
echan00 7y ago
Winners: Lawyers
arkades 7y ago
Hey, did Bloomberg ever retract its entirely unverified Chinese spy chip story? Just a reminder that they’ve blown all their credibility.
- asdfasgasdgasdg 7y ago
  Be that as it may, this is a report of a filed lawsuit. It's a lot harder to get the fact that a lawsuit was filed wrong, as it's trivial to verify. They even listed the docket number.
  - arkades 7y ago
    There’s “reporting the facts,” and then there’s all the context and background work that constitute the journalism bit. One can do the former and still fail utterly at the latter.
    - HeWhoLurksLate 7y ago
      And there's more than one journalist and editor at Bloomberg, and people excel at different things. Even WCCFTech gets leaks right once in a while.
    - asdfasgasdgasdg 7y ago
      There's really only one sentence that even addresses the context and background with respect to China in this blurb, and that's this one: "The lawsuit marks the latest accusation from an American firm of intellectual property theft by Chinese companies, a perennial sore point that’s helped escalate tensions between the world’s two largest economies." Seems pretty fair to me. You'd be hard pressed to say that that's inaccurate or misleading.
- shasheene 7y ago
  You may not be aware of the great talk titled "Modchips of the State" [1] (presented at 35C3 in Dec 2018). The speaker managed to reproduce the exact single-chip hardware implant attack suggested in the Oct 2018 Bloomberg Businessweek story [2] [3], which claimed Amazon and Apple found malicious hardware implants in Supermicro motherboards while conducting detailed inspections. While Bloomberg has never retracted the story, there's an argument that the sources have vested interests in lying to Bloomberg suggesting that attacks developed in lab-conditions actually occurred in the real-world, in order to raise awareness of supply-chain risks (something the current US administration has been attempting to do for some time). There's also a suggestion that the journalist was acting in good-faith but mixed up a few different attacks, with the sources reluctant to clarify things. Another suggestion is that the attack did happen, and Amazon and Apple were forced to issue denials. It's a very fascinating story. Maybe I'm naive, but if Bloomberg was in-fact wrong, they would issue a correction or a retraction. The fact they haven't retracted it suggests to me that there's truth to the story. [1] https://www.youtube.com/watch?v=C7H3V7tkxeA https://www.youtube.com/watch?v=C7H3V7tkxeA [2] https://www.bloomberg.com/news/features/2018-10-04/the-big-hack-how-china-used-a-tiny-chip-to-infiltrate-america-s-top-companies https://www.bloomberg.com/news/features/2018-10-04/the-big-h... [3] https://www.youtube.com/watch?v=UJGbcjfJ7rU https://www.youtube.com/watch?v=UJGbcjfJ7rU
cm2012 7y ago
Edit: Deleting this comment. I don't know enough about the subject matter to speak as confidently as I was.
- tootie 7y ago
  Magic Leap actually have a product and it's actually pretty damn good at what it does. What they don't have is revenue. There just isn't a big enough market for mixed reality headsets.
  - sheepdestroyer 7y ago
    What they sell is not the product that they teased. People got excited by their amazing promises of light beamed to your eyes and we got a lackluster Hololens bis. Bait&Switch
- bardworx 7y ago
  While your comment has merit, I think it’s unfair to compare Magic Leap to Theranos. One did actual bloodwork on people and fucked with your health...the other promised a whale jumping in a gym... Business practice/promise aside, Theranos had the ability to negatively influence a person’s health. Magic Leap can only under deliver.
- nradov 7y ago
  I understand where you're coming from but the difference is that Theranos claims were literally impossible due to how human skin and circulatory system works. Whereas Magic Leap AR is only extremely difficult. If they throw enough billions at it they might eventually ship something that sort of works.
- skellera 7y ago
  Magic leap has released something (although it’s not that amazing). It’s assumed that what is shown to investors is much too large for a consumer product but the promise is that they will someday get the tech to a consumer level. I doubt they’ve been faking anything to investors like Theranos.
robomartin 7y ago
I don't know the full story here and have not taken the time to dive into it. Perhaps I will later. I just want to make a quick comment based on some of the responses I've seen. Having been the subject of market research, product plan and intellectual property theft in the past (no, not by the Chinese) and having that information used to launch a competing business I think I have perspective to offer on this. There is HUGE difference between "R&D" and just "D". "R&D" is slow, costly and full of risk. "D" simply requires execution. Borrowing from sports talk, you know "where the puck is going" and you can aim in that direction. You don't have to invent much and you actually have the luxury of improving upon what you know is and will be the technology of the "R&D" shop from which you stole. One of the mantras of YC startups goes something like "if you are not embarrassed by your first product...". This is usually true for hardware as well. And, in most instances, you actually know very well what you'd like to build next. However, hardware isn't a simple matter of a weekend pivot. You just don't have that freedom. Not even close. So you have to go with what you have, get it to market, make some money with it and look at introducing your "next generation" product a year later. You can't do hardware spins in a couple of months. The greater the volume the more you are shackled to whatever you are shipping and it can easily be a year or more before you can put out a significantly updated version 2. I've seen comments about optics being sub-par and more. Well, that's the kind of thing that can happen when you are doing "R&D" and you have to put out a product. It could be embarrassing, but that's what you brought to the party and that's what has to ship. The thief, on the other hand, knows what you are shipping, what's ugly about it, your future plans, market intelligence and much, much more. Upon gaining this information all they have to do is align it with funding and execute on your version 2 or 3 way before you do. While you are busy building a company the thief can surface out of seemingly nowhere with a product that your first product can't compete with. This is PRECISELY what happened to me nearly twenty years ago. Our resellers, from the US, Europe, Asia and other areas started to call me out of nowhere to ask if we had licensed our products to company X. One of them made an interesting comment, he said: "Martin, the material they sent me sounds and reads exactly like what we've been talking about for more than a year" (under NDA, of course). Company X came into the market and put our product --which was going to be replaced in about six months-- to shame. And they did it with MY product plan, MY specification, MY design, MY market intelligence. The net effect was that, ironically, when we came out with our product WE looked like we copied from them. Which was the proverbial addition of "insult to injury". Anyhow, not defending anyone. I don't know enough. Just wanted to react to some of the comments that point out the thief's product is better than the original. Well, yeah. It would be.
gamblor956 7y ago
Chinese companies have a very long history of state-supported IP theft. When a Chinese product so obviously mimics an American product--especially when the chief engineer used to work for the American company--it's on the Chinese company to prove that no IP theft occurred. They've lost the benefit of the doubt.
- ETHisso2017 7y ago
  Xenophobia and disdain for due process all wrapped in less than 100 words. Someone get this guy a medal for brevity.
  - nullwasamistake 7y ago
    There's nothing wrong with pointing out a pattern
    - bodi 7y ago
      I like patterns too. For example have you ever noticed China artificially props up the US economy via bonds/debt/investment and in return has flagrantly been allowed to steal pretty much every byte of US IP, both from the private sector and defense with zero pushback from our "intelligence" community, legislature, and only a hand wavey stop it from the Obama admin? You still like patterns?
      - 420codebro 7y ago
        Owning 28% of a government's debt is "propping" up said economy? Lmao this lad never passed Econ 101.
      - adventured 7y ago
        > You still like patterns? I like patterns, do you have some? > China artificially props up the US economy via bonds/debt/investment I don't believe you can support that claim. The US economy is far larger than the Chinese economy and far wealthier. The US consumer is far wealthier and far larger than the Chinese consumer. That also includes the US equity markets being far larger and the US bond markets being far larger. Further, US manufacturing is also not dramatically smaller than China's manufacturing sector and their manufacturing has already peaked. China's holdings of US treasuries and US debt in general is entirely trivial. It's so small now the Fed could wipe it out with a modest round of QE and the dollar would hardly notice (especially since the dollar is very strong right now). It becomes more trivial by the day as China's holdings have been stagnant for many years, the US economy continues to grow larger in real terms, and the US Government's debt continues to expand (reducing China's relative share; their relative share has plunged over the past decade). Since late 2009 / early 2010, China's US treasury holdings have not net expanded. In inflation adjusted terms, they've contracted considerably (by at least 20-25%). In that time the US economy has added an economy the size of Germany + France (about ~$7 trillion non-adjusted). China is less critical to the US today, than at any other time in the past decade. That is especially true given their imports of US goods are not very considerable and have not expanded in about eight years (a time during which the US added ~$5.x to $6 trillion to its GDP, even further reducing China's real import contribution value to the US economy).
shasheene 7y ago
The article reports on the lawsuit, but is light on details about the headset. Tested recently did a 10 minute review on this headset, the 'Nreal Light' [1] https://www.youtube.com/watch?v=M9A9u-lwjTs https://www.youtube.com/watch?v=M9A9u-lwjTs Regardless of the merits of the lawsuit, I can see why Magic Leap would be scared. The AR glasses looks great. They're certainly stylish enough for the mass-market -- they look like normal glasses at first glance, they're quite reasonably priced (at $500), and run from a regular Android phones via USB-C (for power, as well as sensor and video data). For reference, here's the Tested review for current Magic Leap product, the Magic Leap One Creator Edition: https://www.youtube.com/watch?v=Vrq2akzdFq8 https://www.youtube.com/watch?v=Vrq2akzdFq8. It retails for $2295. Though it comes with controllers, eye-tracking for focal accommodation, two waveguides displays that are used to provide two separate physical layers to focus on.
- shasheene 7y ago
  On the merits of the lawsuit, after reading the whole district court filing [1], the core allegation is that the 'Nreal Light' is based on Magic Leap's unproductized internal designs produced "after extensive investment of time (multiple years), money (hundreds of millions of dollars spent on research and development) and human resources (hundreds of engineers)", and that the defendant learned about the product designs and research during his employment, including adapting (as discussed elsewhere in this thread) Magic Leap's proprietary font (https://i.imgur.com/7pYZ8bp.png https://i.imgur.com/7pYZ8bp.png) If Nreal Light is indeed based on Magic Leap's unreleased designs, this makes me very sympathetic to the price difference -- Magic Leap One is a development kit backed by 5+ years of huge R&D investment, and is/was never intended for end-users (hence the price and awful aesthetics). The Nreal Light is an indication of what a consumer Magic Leap was going to be: a cheaper, slimmer, less ambitious product (by avoiding multiple waveguide displays) that appeals to a consumer market, then it's unfair and sad that they didn't have the opportunity to go to market with their own product. On the other hand, Magic Leap has had ample opportunity to release an affordable high-quality AR headset so I do feel some sympathy in an employee leveraging legitimately acquired knowledge and experience to build a commercial product that beats its competitors. The situation may not that different to the Traitorous Eight, or Steve Jobs infamous "adapting" of design ideas of the Alto for the Apple Lisa and Apple Macintosh, after his visit to Xerox PARC. [1] https://www.courtlistener.com/recap/gov.uscourts.cand.343717/gov.uscourts.cand.343717.1.0_1.pdf https://www.courtlistener.com/recap/gov.uscourts.cand.343717...
majia 7y ago
Lessons learned from Magic Leap: don’t sign a non-compete agreement with your employee; you have to pay and it’s legally not enforceable in California. Ask your employee to sign a board confidentiality agreement and sue him if he works for a competitor. Also, I wonder if people would think differently if this case is about a Facebook employee left to work on a social media App like google+.
- elamje 7y ago
  Possibly, but copying a web app is substantially simpler than copying AR tech. Considering magic leap was stealth with hundreds of millions in R&D, I would put it in a different category than making a similar web app.
  - majia 7y ago
    I’m pretty sure Facebook backend is a lot more sophisticated than Magic Leap. I’m using Facebook as an example so that our judgements won’t be biased by the current sino-US tech climate.
  - deleted 7y ago
    [deleted]
  - tastroder 7y ago
    > stealth with hundreds of millions in R&D Wow. That number sounded high since I'm very unfamiliar with the space but according to crunchbase [1] they took in 2.6B in funding overall. Before this headset they mainly put out a few iterations of that gesture input device, right? [1] https://www.crunchbase.com/organization/magic-leap https://www.crunchbase.com/organization/magic-leap
    - SahAssar 7y ago
      Leap Motion and Magic Leap are two different companies. The only thing Magic Leap seem to be doing is the headset, and that took them 2.6B funding and turned out to be at about the same level of tech as already existing products. Leap Motion (which did the gesture recognition input stuff) was recently sold at about a 10th of their peak valuation ($30M price from $300M valuation about 2 years ago).
stevefan1999 7y ago
It's just Bluehole suing Epic Games for PUBG and Fortnite all over again, get on with it.
sheepdestroyer 7y ago
Magic Leap promised Fiber Scanning Displays ; They conned everyone into believing they had the tech to beam photons more real than reality's directly in your eyes. Now that they baited and switched, they should just STFU. Who cares if someone copied their disappointing actual stuff?
- dproblem 7y ago
  Whatever they promised - The Google's and VCs of the world put in money into them. What does that tell us about investors in this country?
  - dyarosla 7y ago
    That FOMO is rampant; if you’re waiting for the startup to prove its tech, you’ve likely missed the investment boat already. Just saying, there is definitely some rationale to it, esp when considering how investment portfolios are precipitated on a few huge winners and 99% losers.
    - dproblem 7y ago
      @dyrosla FOMO: Thank you for the explanation. I am trying to understand. The lottery ticket on the back of engineers and workers. Any thoughts on how long is this game going to last? Now China is playing the same game, but with relaxed rules - to speed things up on FOMO? Do I understand this correct?
      - dyarosla 7y ago
        I’m not sure if I understand you- FOMO is just the fear of missing out on investing in a company that has a likelihood of making it big. In the case of Magic Leap, VCs bought into the team’s background and expertise and banked on the likelihood of their success/impact if successful and decided to risk it. It doesn’t mean they were 100% sold- just that the risk/reward calculation they made was favourable. Had they waited for Magic Leap to be a ways farther in their tech, (and had Magic Leap delivered), the price of entry to invest would be astronomical and the opportunity would have been ‘missed out’ on.
m0zg 7y ago
I'm pretty sure, actually, that this affects _every single company_ that has anything the Chinese government would want. If you want to tell me that there aren't any spies among e.g. 100K Intel/AMD/Qualcomm/Google/Microsoft/Amazon/Apple/Facebook/Tesla/SpaceX/etc employees, I'd say you're very naive. There are also likely domestic spies on staff, as well. You won't even know who they are, and all the right parties know everything they need to know. Basically any company of any consequence which doesn't do DoD-style clearances and compartmentalization for everyone has a bunch of spies on staff, 100% guaranteed.
ycombonator 7y ago
Duh
- dang 7y ago
  Could you please stop posting unsubstantive comments to Hacker News?
ETHisso2017 7y ago
This situation strikes me as very similar to what Eric Yuan of Zoom did. He was one of Webex's founding employees and the VP of Engineering for Webex after its acquisition by Cisco. He then left to build a lightweight competitor that's currently cleaning Webex's clock. I wonder if Cisco should sue Eric as well?
Lazare 7y ago
> “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),” according to the complaint. I have no real opinion on the allegations, and if true they are serious but... ...I find it a bit hilarious that Magic Leap, a company that has been widely criticised for over promising, under delivering, having extremely basic tech which is itself quite close to the tech of competitors, and which is well known for spending an eye watering amount of money and time in order to obtain very little results would offer this as a supporting argument. Just because Magic Leap spent two billion and 7 years doesn't mean a competent engineering team couldn't do it a lot faster with a lot less money. :) (Especially with entirely legitimate access to Magic Leaps hardware, and with the benefit of years more published research across the industry.) I hope Magic Leap has some better arguments than they managed to get published in Bloomberg, because what's in the article is just hand wavy nonsense.
xxxpupugo 7y ago
But who knows whether Magic Leap's claimed 'technology' is really there? I mean, they don't have any product yet? Is idea copying a thing? I don't really know...
thrwaway1906 7y ago
For those of us who studied the history of racism, sometimes racism can be "rational" but is still wrong. For example, you may have a small corner shop and have a real problem with your locally hired employees stealing from the till. As a business owner, occassionally you "could" solve this problem by throwing away all resumes and people asking for a job that you get in your inner city, putting an ad up in a suburb and only hiring from there. But if the suburb is 95% white whereas your local market is 80% black, this might just be a form of racism. It is tough. You go out of business if your hires steal from the till. It seems so easy to exclude the people who steal (by hiring from a suburb). But it's still wrong. I feel like subtle racism against people who will take pictures of everything in your lab, even stuff they're not supposed to have access to, and stealing your designs and literally sending them to your competitor to undercut you with and ruin your business, is the same thing. You could go out of business if you can't compete with the people stealing your designs. The fix seems "so simple". Still, the fix is wrong and racist. It is wrong to change your hiring policies if it has a racist effect, just as it is wrong to hire only from the suburbs if it has a racist effect. Even if it will protect and save your business. Subtle racism has no place in hiring decisions.
deevolution 7y ago
I think everyone ultimately benefits from this. It means cheaper and more accessible AR technology for all.
Xunxi 7y ago
Chinese have a good grasp of add-on innovation. Give a base product and they'll pad it with all manner of features to make it a very marketable product. Look at DJI's action camera's, drones, etc. I'm not even going to touch on the age old conflict in combating apparel clones in China town. I have a feeling its going to be very difficult to cage this kind of innovation unless there is a recurrent policy in place to periodically ban the import of a wide range of Chinese products. On the other hand there are lots of super smart Chinese students in top tier colleges who also make salient contribution to research work that benefits us in one way or the other. The bigger question is how do we resolve both markets to mutually benefit from sunken R&D as opposed to how we starve consumers because of slow paced tinkering refinements when the other party can speed the product to market. Case in point: Lit Motors
ForFreedom 7y ago
I never heard of Nreal and went to their website but did not find any demos of the product. Here's an execellent youtube video demoing their product - https://www.youtube.com/watch?v=M9A9u-lwjTs https://www.youtube.com/watch?v=M9A9u-lwjTs
chansiky 7y ago
Things like this is what prevents capable inventors from taking the necessary risk to develop a truly innovative product. My wish is for there to be better legal protection for entrepreneurs bringing new products to the market, in order to encourage innovation and long difficult r+d work. My heart sinks every time I hear a story of copycats profiting off of the work of someone or some company that sank tons of hours and dollars into developing a unique product - going up down left right backwards forwards upside down right side up headfirst ass backwards - just to find a solution, and then to have all that effort once you’ve found the answer, be pulled from right under your feet because someone can do it better now that the answer has been discovered (because you put the hours to discover it). That’s just ducking awful. I remember seeing [this](https://www.google.com/amp/s/www.theverge.com/platform/amp/2019/4/2/18290492/in-the-making-series-lumio-pressy-kickstarter-knockoffs-dragon-innovation https://www.google.com/amp/s/www.theverge.com/platform/amp/2...) about a simple product and it made me so furious. The reality is it’s happening everywhere. China and Chinese culture of designer knockoffs and blatant copycatting needs to start playing fair and follow the same laws as everyone else if they expect to deal respectably in international markets. I’m wondering if with things like even the font being the same, wether or not the act of copycatting even registers as an offense to the people who do this. And to make it clear my stance isn’t against Chinese people, some of my favorite people in this world are Chinese, it’s against a government that condones and does little, or turns a blind eye when a company is doing the equivalent of removing padding from a boxing glove. If we can’t resolve something like this through verbal communication and legal action what other options do we have?
- joyjoyjoy 7y ago
  "Things like this is what prevents capable inventors from taking the necessary risk to develop a truly innovative product. My wish is for there to be better legal protection for entrepreneurs bringing new products to the market, in order to encourage innovation and long difficult r+d work." It has always be like this. Guess from who was Germany Stealing? China will become one of the biggest IP proponents soon and they will be bitching about others (India?) stealing their IP

177 points by guyhance 7y ago

ETHisso2017 7y ago

>Magic Leap alleges that Chi Xu, who left in 2016, exploited its confidential information to “quickly develop a prototype of lightweight, ergonomically designed, mixed reality glasses for use with smart phones and other devices that are strikingly similar” to the Florida-based startup’s designs. >The startup alleges that Xu plotted during his roughly 13 months working there to launch his own competing company in China and “neglected his work duties” to acquire proprietary information. While these are valid allegations to make, I'm not sure what IP "theft" has occurred. It sounds like Magic Leap is accusing Chi of looking at Magic Leap's designs and having the intention of launching a product in the same market and with roughly the same form factor - but crucially, does not allege that Chi exfiltrated any CI/trade secrets or infringed on any IP. The second set of accusations is also kafkaesque, by the way, as they are accusing Chi of having the intent to launch a competing company by himself - something that many, many tech employees have dreamed of (and done) without ever being sued. I'm not sure what that allegation is there for, honestly.

pvg 7y ago
but crucially, does not allege that Chi exfiltrated any CI/trade secrets or infringed on any IP Their complaint alleges exactly that, repeatedly.
- paxys 7y ago
  Nowhere in the complaint do they ever mention a single specific bit of technology, code, design or patent stolen by Chi Xu. Their entire argument is that he signed a confidentiality agreement when he started working there so should not be able to start a competing company. This is going to be next to impossible to enforce in California, let alone China.
  - NicoJuicy 7y ago
    And that their design is very similar to an internal confidential prototype. Which says more about the situation.
  - pvg 7y ago
    The comment I'm replying to says that they don't allege he improperly took their confidential information. This isn't an accurate representation of their allegations. They do allege that, over and over. I don't have any opinions on (or much interest in) the merits of their case, but "they don't even say he took their CI" is not true. They quite plainly do. They say things like: "in reality, the Nreal Light incorporates and derives from the Confidential Designs and other Magic Leap Confidential Information protected by the PIIA."
  - gamblor956 7y ago
    A complaint isn't required to allege specific IP stolen. It's to allege general categories of IP stolen. Too much specificity limits the scope of the complaint and would require an amended complaint if more IP was stolen than originally alleged. The next stage of the litigation process, discovery, is for determining the specific IP pilfered (if any).
  - bstar77 7y ago
    How are they supposed to know the extent of what was stolen without seeing the source code from the offending product? The reality is that a relatively insignificant employee up and left and had a competing product out the door in a very short period of time. Everything points to him stealing as much IP as possible and throwing a competing product together. Seems to be enough probable cause to justify an investigation.
deleted 7y ago
[deleted]

phonon 7y ago

Read the complaint here https://www.courtlistener.com/docket/15787938/1/magic-leap-inc-v-xu/ https://www.courtlistener.com/docket/15787938/1/magic-leap-i...

dmix 7y ago
Summary of the evidence presented in the complaint: 1) Using the same proprietary font in their logo was a really dumb idea: > https://i.imgur.com/7pYZ8bp.png https://i.imgur.com/7pYZ8bp.png 2) Alleges he engaged in internal meetings "outside the scope of his work at Magic Leap" in order to gain useful information, while simultaneously neglecting his duties at work as he planned to start his own company in China. Before launching a product that looks and functions very similar to the Magic Leap product within a 2yr timespan (quitting in mid-2016, started in 2017, launched in 2019) while Magic Leap has been at it since 2010. 3) Their primary evidence seems to be some useless "Private Information" confidentiality form we all sign 4) The other is some Youtube interview the Nreal founder did where he openly admitted to being inspired by his work at Magic Leap: https://www.youtube.com/watch?v=rcPB4POYkpc https://www.youtube.com/watch?v=rcPB4POYkpc Where he basically said that Magic Leap was being too ambitious with an "impossible" goal of trying to put it all in one small device... and he wanted to utilize Chinese manufacturing pipelines to build the same thing but much simpler by utilizing existing smartphone and laptop tech. 5) Finally another section compared demos by both companies, both involving whales: Magic Leap's whale demos: > https://www.youtube.com/watch?v=LM0T6hLH15k https://www.youtube.com/watch?v=LM0T6hLH15k > https://www.youtube.com/watch?v=PyCoTzRzHxo https://www.youtube.com/watch?v=PyCoTzRzHxo Nreal's twitter picture demo: > https://i.imgur.com/jPIGMkf.png https://i.imgur.com/jPIGMkf.png That's about it. Points 2) and 3) get repeated ad-nauseam and not very convincingly IMO.
- bflesch 7y ago
  Why on earth does a pre-revenue startup need a proprietary font design?
  - mondoshawan 7y ago
    I asked this very same question while I was there during its development. The answer was "its a badge of honor". Ugh.

xparco 7y ago

Magic Leap is a disgusting company. Rony is abusive and already has staff that sexually harasses people. This company needs to be shutdown and Rony needs to be put in IDF to lose some weight.

ricardobeat 7y ago

Shouldn't they be busy building a product that people want instead?

daenz 7y ago
I can't help but think that insiders who knew the product was doomed to fail are breathing a sigh of relief that the blame for the killing blow won't land on them.

dirtyid 7y ago

Nreal optical hardware is closer to ODGs and very different to Magic Leap. Magic Leap acquired ODG patent portfolio recently (after effectively killing them via some backstabby acquisition shenanigans) and is now opportunistically patent trolling Nreal and the increasing amount of Chinese competition (Nreal has much better visual quality at a much lower price) using post rationalized accusations given current US-China climate. And on queue, Bloomberg Tech does a Bloomberg Tech on the story.

krak12 7y ago
Liar, everyone here know what is the Chinese policy: stole everything, try to make it better. Everywhere you can find this behavior from electric cars to CPUs, to OS ... etc
iabacu 7y ago
> and is now opportunistically patent trolling Nreal Are you making this up? I don't see any patent claim being mentioned in the article.
- scotty79 7y ago
  I think he didn't mean that literally. "Patent trolling" as in extorting someone who successfully implemented some idea just because I have some claim to comming up with vaguely similar idea first.
NicoJuicy 7y ago
But the design looked very similar to proptotypes who were confidential. He did more than "inspired by"
ETHisso2017 7y ago
Could you elaborate on how Nreal is closer to ODG and different from Magic Leap?

AndrewKemendo 7y ago

Mr. Xu’s misuse and exploitation of Magic Leap’s image and goodwill is further manifested in Nreal’s shameless use of whales in its demo experiences Are we patenting Whales in demos now? This is exactly the kind of myopia ML continues to have - thinking they were the first ones to use a whales in a VR/AR demo. I guess Intel was ripping off ML with Leviathan demo in 2014 [1] and theBlu was ripping off ML with their Vive demo in 2015 [2]. [1] https://ronaldazuma.com/Leviathan_at_CES2014.html https://ronaldazuma.com/Leviathan_at_CES2014.html [1] https://www.youtube.com/watch?v=MFKbL-GU-_U https://www.youtube.com/watch?v=MFKbL-GU-_U

ETHisso2017 7y ago
Seriously? Whales in product demos is "image and goodwill" now? In any sane, non Sinophobic climate, this would be laughed out of the room
fencepost 7y ago
Well if people are going to start doing things with animated space whales are they crediting Disney (https://m.youtube.com/watch?v=6eS8WUoKeP0 https://m.youtube.com/watch?v=6eS8WUoKeP0)? Perhaps the easy availability of royalty free 3d models is relevant (https://www.cgtrader.com/3d-models/animals/fish/humpback-whale-for-unreal-engine-4 https://www.cgtrader.com/3d-models/animals/fish/humpback-wha...)? Perhaps Oculus Rift museum humpback whale VR back in 2015 was an inspiration?

paxys 7y ago

Magic Leap has raised $2.6 BILLION dollars in funding and have nothing to show for it. Somehow I don't think a random guy in China is what's holding them back.

wavefunction 7y ago
That's not what's being alleged though. Seems like a strange take.
rococode 7y ago
As other commenter said, this is not really the point of this particular article. But I totally agree. I recently had the opportunity to try to develop (with a team) something for the Magic Leap One over a period of about 3 months, and it was an awful experience, a complete and utter disappointment. Here are just some of the issues we faced: - terrible overheating: we offloaded most functionality (basically everything in our app but image tracking) to a remote server and both the headset and the lightpack would still overheat to the point of being very hot to the touch within 5-10 minutes - image tracking in general pretty much doesn't work: the effective range is like 2 feet, and even then it's laggy and inaccurate. And forget about trying to use your own images. - controller drift: the tracking for the controller literally just starts floating away. We had attached something to the controller and during demos people would say, "woah it's just floating away" and look up as the virtual controller slowly faded into the distance - unexplainable throttling: once it starts overheating, things like image tracking just stop working, apps freeze or shut down, etc. - dizziness: everyone who tried it started feeling eye strain within minutes of wearing it - awful field of view: to put it simply, if you look at someone eye-to-eye, the field of view cannot even show things right above their head - clunky design: the lightpack is heavy and constantly getting in the way, and the cables attaching it to the headset are very stiff - Lumin OS: sucks - controller trackpad: the least functional trackpad I've used in my life. The circular scrolling is incredibly hard to use; our team just dropped the entire scrolling feature for demos because not a single person we trialed with was able to get it to work. Theoretically, it's just a circular motion with your thumb to scroll. In practice, after 3 months of experience using the device I was still unable scroll consistently. - dim screen: like wearing dark sunglasses - heavy headset / awkward weight distribution: it feels uncomfortably heavy on your eyes & nose area And there are many more issues that make it feel more like a prototype made by a couple people in a garage than the flagship consumer product of a company with $2.6b in funding. Really makes me think the whole thing was a big scam, like a slightly less completely-made-up version of Theranos.

mindgam3 7y ago

The optics of this aren't great for Magic Leap. AR pun not intended. Really all this does is present Nreal as a legitimate threat to a company that raised approx 100x more money* before shipping a product. (* Magic Leap funding $2B+, nreal $16M ish)

khuey 7y ago
I don't want to take any position on either Magic Leap as a product/company or on this lawsuit, but it's not at all unusual for R&D to cost far more than production. This is how drug development works: someone spends billions researching and developing a drug and gets a temporary monopoly on production. Once competition is allowed and prices are competed down to the marginal cost of production the generics are close to free in comparison to the original branded product. So "Nreal copied Magic Leap's product after Magic Leap sank billion into R&D" is an entirely plausible explanation for the comparable results despite the dramatic gap in funding.
- mindgam3 7y ago
  I mean, I’m not arguing that there is no plausible explanation for Magic Leap’s inability to ship a product with only $1B in funding. The plausible explanation is that they are running a tech startup like a drug development company, to use your analogy, which is just a terrible way to do startups. AR/smartglasses is not a market where you will have “generics” any time soon. You’re going to have the iPhone of smartglasses which will dominate, and then everyone else will try and fail to copy. Like Facebook dominating social, then google+ failing. Or iPhone vs Android, although Android did finally manage to achieve market share thanks to googles muscle. Tl;dr: successful startups don’t raise billions of dollars before shipping a product as mediocre as ML’s v1.
briandear 7y ago
And removing the mistakes made my Magic makes the derivative cost less; Magic used a lot of money figuring out what doesn’t work, money that the competing company did not have to spend. If I make an iPhone copy, I didn’t have to spend all the money Apple spent figuring out what wouldn’t work. So it’s not an apples to apples comparison.

echan00 7y ago

Winners: Lawyers

arkades 7y ago

Hey, did Bloomberg ever retract its entirely unverified Chinese spy chip story? Just a reminder that they’ve blown all their credibility.

asdfasgasdgasdg 7y ago
Be that as it may, this is a report of a filed lawsuit. It's a lot harder to get the fact that a lawsuit was filed wrong, as it's trivial to verify. They even listed the docket number.
- arkades 7y ago
  There’s “reporting the facts,” and then there’s all the context and background work that constitute the journalism bit. One can do the former and still fail utterly at the latter.
  - HeWhoLurksLate 7y ago
    And there's more than one journalist and editor at Bloomberg, and people excel at different things. Even WCCFTech gets leaks right once in a while.
  - asdfasgasdgasdg 7y ago
    There's really only one sentence that even addresses the context and background with respect to China in this blurb, and that's this one: "The lawsuit marks the latest accusation from an American firm of intellectual property theft by Chinese companies, a perennial sore point that’s helped escalate tensions between the world’s two largest economies." Seems pretty fair to me. You'd be hard pressed to say that that's inaccurate or misleading.
shasheene 7y ago
You may not be aware of the great talk titled "Modchips of the State" [1] (presented at 35C3 in Dec 2018). The speaker managed to reproduce the exact single-chip hardware implant attack suggested in the Oct 2018 Bloomberg Businessweek story [2] [3], which claimed Amazon and Apple found malicious hardware implants in Supermicro motherboards while conducting detailed inspections. While Bloomberg has never retracted the story, there's an argument that the sources have vested interests in lying to Bloomberg suggesting that attacks developed in lab-conditions actually occurred in the real-world, in order to raise awareness of supply-chain risks (something the current US administration has been attempting to do for some time). There's also a suggestion that the journalist was acting in good-faith but mixed up a few different attacks, with the sources reluctant to clarify things. Another suggestion is that the attack did happen, and Amazon and Apple were forced to issue denials. It's a very fascinating story. Maybe I'm naive, but if Bloomberg was in-fact wrong, they would issue a correction or a retraction. The fact they haven't retracted it suggests to me that there's truth to the story. [1] https://www.youtube.com/watch?v=C7H3V7tkxeA https://www.youtube.com/watch?v=C7H3V7tkxeA [2] https://www.bloomberg.com/news/features/2018-10-04/the-big-hack-how-china-used-a-tiny-chip-to-infiltrate-america-s-top-companies https://www.bloomberg.com/news/features/2018-10-04/the-big-h... [3] https://www.youtube.com/watch?v=UJGbcjfJ7rU https://www.youtube.com/watch?v=UJGbcjfJ7rU

cm2012 7y ago

Edit: Deleting this comment. I don't know enough about the subject matter to speak as confidently as I was.

tootie 7y ago
Magic Leap actually have a product and it's actually pretty damn good at what it does. What they don't have is revenue. There just isn't a big enough market for mixed reality headsets.
- sheepdestroyer 7y ago
  What they sell is not the product that they teased. People got excited by their amazing promises of light beamed to your eyes and we got a lackluster Hololens bis. Bait&Switch
bardworx 7y ago
While your comment has merit, I think it’s unfair to compare Magic Leap to Theranos. One did actual bloodwork on people and fucked with your health...the other promised a whale jumping in a gym... Business practice/promise aside, Theranos had the ability to negatively influence a person’s health. Magic Leap can only under deliver.
nradov 7y ago
I understand where you're coming from but the difference is that Theranos claims were literally impossible due to how human skin and circulatory system works. Whereas Magic Leap AR is only extremely difficult. If they throw enough billions at it they might eventually ship something that sort of works.
skellera 7y ago
Magic leap has released something (although it’s not that amazing). It’s assumed that what is shown to investors is much too large for a consumer product but the promise is that they will someday get the tech to a consumer level. I doubt they’ve been faking anything to investors like Theranos.

robomartin 7y ago

I don't know the full story here and have not taken the time to dive into it. Perhaps I will later. I just want to make a quick comment based on some of the responses I've seen. Having been the subject of market research, product plan and intellectual property theft in the past (no, not by the Chinese) and having that information used to launch a competing business I think I have perspective to offer on this. There is HUGE difference between "R&D" and just "D". "R&D" is slow, costly and full of risk. "D" simply requires execution. Borrowing from sports talk, you know "where the puck is going" and you can aim in that direction. You don't have to invent much and you actually have the luxury of improving upon what you know is and will be the technology of the "R&D" shop from which you stole. One of the mantras of YC startups goes something like "if you are not embarrassed by your first product...". This is usually true for hardware as well. And, in most instances, you actually know very well what you'd like to build next. However, hardware isn't a simple matter of a weekend pivot. You just don't have that freedom. Not even close. So you have to go with what you have, get it to market, make some money with it and look at introducing your "next generation" product a year later. You can't do hardware spins in a couple of months. The greater the volume the more you are shackled to whatever you are shipping and it can easily be a year or more before you can put out a significantly updated version 2. I've seen comments about optics being sub-par and more. Well, that's the kind of thing that can happen when you are doing "R&D" and you have to put out a product. It could be embarrassing, but that's what you brought to the party and that's what has to ship. The thief, on the other hand, knows what you are shipping, what's ugly about it, your future plans, market intelligence and much, much more. Upon gaining this information all they have to do is align it with funding and execute on your version 2 or 3 way before you do. While you are busy building a company the thief can surface out of seemingly nowhere with a product that your first product can't compete with. This is PRECISELY what happened to me nearly twenty years ago. Our resellers, from the US, Europe, Asia and other areas started to call me out of nowhere to ask if we had licensed our products to company X. One of them made an interesting comment, he said: "Martin, the material they sent me sounds and reads exactly like what we've been talking about for more than a year" (under NDA, of course). Company X came into the market and put our product --which was going to be replaced in about six months-- to shame. And they did it with MY product plan, MY specification, MY design, MY market intelligence. The net effect was that, ironically, when we came out with our product WE looked like we copied from them. Which was the proverbial addition of "insult to injury". Anyhow, not defending anyone. I don't know enough. Just wanted to react to some of the comments that point out the thief's product is better than the original. Well, yeah. It would be.

gamblor956 7y ago

Chinese companies have a very long history of state-supported IP theft. When a Chinese product so obviously mimics an American product--especially when the chief engineer used to work for the American company--it's on the Chinese company to prove that no IP theft occurred. They've lost the benefit of the doubt.

ETHisso2017 7y ago
Xenophobia and disdain for due process all wrapped in less than 100 words. Someone get this guy a medal for brevity.
- nullwasamistake 7y ago
  There's nothing wrong with pointing out a pattern
  - bodi 7y ago
    I like patterns too. For example have you ever noticed China artificially props up the US economy via bonds/debt/investment and in return has flagrantly been allowed to steal pretty much every byte of US IP, both from the private sector and defense with zero pushback from our "intelligence" community, legislature, and only a hand wavey stop it from the Obama admin? You still like patterns?
    - 420codebro 7y ago
      Owning 28% of a government's debt is "propping" up said economy? Lmao this lad never passed Econ 101.
    - adventured 7y ago
      > You still like patterns? I like patterns, do you have some? > China artificially props up the US economy via bonds/debt/investment I don't believe you can support that claim. The US economy is far larger than the Chinese economy and far wealthier. The US consumer is far wealthier and far larger than the Chinese consumer. That also includes the US equity markets being far larger and the US bond markets being far larger. Further, US manufacturing is also not dramatically smaller than China's manufacturing sector and their manufacturing has already peaked. China's holdings of US treasuries and US debt in general is entirely trivial. It's so small now the Fed could wipe it out with a modest round of QE and the dollar would hardly notice (especially since the dollar is very strong right now). It becomes more trivial by the day as China's holdings have been stagnant for many years, the US economy continues to grow larger in real terms, and the US Government's debt continues to expand (reducing China's relative share; their relative share has plunged over the past decade). Since late 2009 / early 2010, China's US treasury holdings have not net expanded. In inflation adjusted terms, they've contracted considerably (by at least 20-25%). In that time the US economy has added an economy the size of Germany + France (about ~$7 trillion non-adjusted). China is less critical to the US today, than at any other time in the past decade. That is especially true given their imports of US goods are not very considerable and have not expanded in about eight years (a time during which the US added ~$5.x to $6 trillion to its GDP, even further reducing China's real import contribution value to the US economy).

shasheene 7y ago

The article reports on the lawsuit, but is light on details about the headset. Tested recently did a 10 minute review on this headset, the 'Nreal Light' [1] https://www.youtube.com/watch?v=M9A9u-lwjTs https://www.youtube.com/watch?v=M9A9u-lwjTs Regardless of the merits of the lawsuit, I can see why Magic Leap would be scared. The AR glasses looks great. They're certainly stylish enough for the mass-market -- they look like normal glasses at first glance, they're quite reasonably priced (at $500), and run from a regular Android phones via USB-C (for power, as well as sensor and video data). For reference, here's the Tested review for current Magic Leap product, the Magic Leap One Creator Edition: https://www.youtube.com/watch?v=Vrq2akzdFq8 https://www.youtube.com/watch?v=Vrq2akzdFq8. It retails for $2295. Though it comes with controllers, eye-tracking for focal accommodation, two waveguides displays that are used to provide two separate physical layers to focus on.

shasheene 7y ago
On the merits of the lawsuit, after reading the whole district court filing [1], the core allegation is that the 'Nreal Light' is based on Magic Leap's unproductized internal designs produced "after extensive investment of time (multiple years), money (hundreds of millions of dollars spent on research and development) and human resources (hundreds of engineers)", and that the defendant learned about the product designs and research during his employment, including adapting (as discussed elsewhere in this thread) Magic Leap's proprietary font (https://i.imgur.com/7pYZ8bp.png https://i.imgur.com/7pYZ8bp.png) If Nreal Light is indeed based on Magic Leap's unreleased designs, this makes me very sympathetic to the price difference -- Magic Leap One is a development kit backed by 5+ years of huge R&D investment, and is/was never intended for end-users (hence the price and awful aesthetics). The Nreal Light is an indication of what a consumer Magic Leap was going to be: a cheaper, slimmer, less ambitious product (by avoiding multiple waveguide displays) that appeals to a consumer market, then it's unfair and sad that they didn't have the opportunity to go to market with their own product. On the other hand, Magic Leap has had ample opportunity to release an affordable high-quality AR headset so I do feel some sympathy in an employee leveraging legitimately acquired knowledge and experience to build a commercial product that beats its competitors. The situation may not that different to the Traitorous Eight, or Steve Jobs infamous "adapting" of design ideas of the Alto for the Apple Lisa and Apple Macintosh, after his visit to Xerox PARC. [1] https://www.courtlistener.com/recap/gov.uscourts.cand.343717/gov.uscourts.cand.343717.1.0_1.pdf https://www.courtlistener.com/recap/gov.uscourts.cand.343717...

majia 7y ago

Lessons learned from Magic Leap: don’t sign a non-compete agreement with your employee; you have to pay and it’s legally not enforceable in California. Ask your employee to sign a board confidentiality agreement and sue him if he works for a competitor. Also, I wonder if people would think differently if this case is about a Facebook employee left to work on a social media App like google+.

elamje 7y ago
Possibly, but copying a web app is substantially simpler than copying AR tech. Considering magic leap was stealth with hundreds of millions in R&D, I would put it in a different category than making a similar web app.
- majia 7y ago
  I’m pretty sure Facebook backend is a lot more sophisticated than Magic Leap. I’m using Facebook as an example so that our judgements won’t be biased by the current sino-US tech climate.
- deleted 7y ago
  [deleted]
- tastroder 7y ago
  > stealth with hundreds of millions in R&D Wow. That number sounded high since I'm very unfamiliar with the space but according to crunchbase [1] they took in 2.6B in funding overall. Before this headset they mainly put out a few iterations of that gesture input device, right? [1] https://www.crunchbase.com/organization/magic-leap https://www.crunchbase.com/organization/magic-leap
  - SahAssar 7y ago
    Leap Motion and Magic Leap are two different companies. The only thing Magic Leap seem to be doing is the headset, and that took them 2.6B funding and turned out to be at about the same level of tech as already existing products. Leap Motion (which did the gesture recognition input stuff) was recently sold at about a 10th of their peak valuation ($30M price from $300M valuation about 2 years ago).

stevefan1999 7y ago

It's just Bluehole suing Epic Games for PUBG and Fortnite all over again, get on with it.

sheepdestroyer 7y ago

Magic Leap promised Fiber Scanning Displays ; They conned everyone into believing they had the tech to beam photons more real than reality's directly in your eyes. Now that they baited and switched, they should just STFU. Who cares if someone copied their disappointing actual stuff?

dproblem 7y ago
Whatever they promised - The Google's and VCs of the world put in money into them. What does that tell us about investors in this country?
- dyarosla 7y ago
  That FOMO is rampant; if you’re waiting for the startup to prove its tech, you’ve likely missed the investment boat already. Just saying, there is definitely some rationale to it, esp when considering how investment portfolios are precipitated on a few huge winners and 99% losers.
  - dproblem 7y ago
    @dyrosla FOMO: Thank you for the explanation. I am trying to understand. The lottery ticket on the back of engineers and workers. Any thoughts on how long is this game going to last? Now China is playing the same game, but with relaxed rules - to speed things up on FOMO? Do I understand this correct?
    - dyarosla 7y ago
      I’m not sure if I understand you- FOMO is just the fear of missing out on investing in a company that has a likelihood of making it big. In the case of Magic Leap, VCs bought into the team’s background and expertise and banked on the likelihood of their success/impact if successful and decided to risk it. It doesn’t mean they were 100% sold- just that the risk/reward calculation they made was favourable. Had they waited for Magic Leap to be a ways farther in their tech, (and had Magic Leap delivered), the price of entry to invest would be astronomical and the opportunity would have been ‘missed out’ on.

m0zg 7y ago

I'm pretty sure, actually, that this affects _every single company_ that has anything the Chinese government would want. If you want to tell me that there aren't any spies among e.g. 100K Intel/AMD/Qualcomm/Google/Microsoft/Amazon/Apple/Facebook/Tesla/SpaceX/etc employees, I'd say you're very naive. There are also likely domestic spies on staff, as well. You won't even know who they are, and all the right parties know everything they need to know. Basically any company of any consequence which doesn't do DoD-style clearances and compartmentalization for everyone has a bunch of spies on staff, 100% guaranteed.

ycombonator 7y ago

Duh

dang 7y ago
Could you please stop posting unsubstantive comments to Hacker News?

ETHisso2017 7y ago

This situation strikes me as very similar to what Eric Yuan of Zoom did. He was one of Webex's founding employees and the VP of Engineering for Webex after its acquisition by Cisco. He then left to build a lightweight competitor that's currently cleaning Webex's clock. I wonder if Cisco should sue Eric as well?

Lazare 7y ago

> “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),” according to the complaint. I have no real opinion on the allegations, and if true they are serious but... ...I find it a bit hilarious that Magic Leap, a company that has been widely criticised for over promising, under delivering, having extremely basic tech which is itself quite close to the tech of competitors, and which is well known for spending an eye watering amount of money and time in order to obtain very little results would offer this as a supporting argument. Just because Magic Leap spent two billion and 7 years doesn't mean a competent engineering team couldn't do it a lot faster with a lot less money. :) (Especially with entirely legitimate access to Magic Leaps hardware, and with the benefit of years more published research across the industry.) I hope Magic Leap has some better arguments than they managed to get published in Bloomberg, because what's in the article is just hand wavy nonsense.

xxxpupugo 7y ago

But who knows whether Magic Leap's claimed 'technology' is really there? I mean, they don't have any product yet? Is idea copying a thing? I don't really know...

thrwaway1906 7y ago

For those of us who studied the history of racism, sometimes racism can be "rational" but is still wrong. For example, you may have a small corner shop and have a real problem with your locally hired employees stealing from the till. As a business owner, occassionally you "could" solve this problem by throwing away all resumes and people asking for a job that you get in your inner city, putting an ad up in a suburb and only hiring from there. But if the suburb is 95% white whereas your local market is 80% black, this might just be a form of racism. It is tough. You go out of business if your hires steal from the till. It seems so easy to exclude the people who steal (by hiring from a suburb). But it's still wrong. I feel like subtle racism against people who will take pictures of everything in your lab, even stuff they're not supposed to have access to, and stealing your designs and literally sending them to your competitor to undercut you with and ruin your business, is the same thing. You could go out of business if you can't compete with the people stealing your designs. The fix seems "so simple". Still, the fix is wrong and racist. It is wrong to change your hiring policies if it has a racist effect, just as it is wrong to hire only from the suburbs if it has a racist effect. Even if it will protect and save your business. Subtle racism has no place in hiring decisions.

deevolution 7y ago

I think everyone ultimately benefits from this. It means cheaper and more accessible AR technology for all.

Xunxi 7y ago

Chinese have a good grasp of add-on innovation. Give a base product and they'll pad it with all manner of features to make it a very marketable product. Look at DJI's action camera's, drones, etc. I'm not even going to touch on the age old conflict in combating apparel clones in China town. I have a feeling its going to be very difficult to cage this kind of innovation unless there is a recurrent policy in place to periodically ban the import of a wide range of Chinese products. On the other hand there are lots of super smart Chinese students in top tier colleges who also make salient contribution to research work that benefits us in one way or the other. The bigger question is how do we resolve both markets to mutually benefit from sunken R&D as opposed to how we starve consumers because of slow paced tinkering refinements when the other party can speed the product to market. Case in point: Lit Motors

ForFreedom 7y ago

I never heard of Nreal and went to their website but did not find any demos of the product. Here's an execellent youtube video demoing their product - https://www.youtube.com/watch?v=M9A9u-lwjTs https://www.youtube.com/watch?v=M9A9u-lwjTs

chansiky 7y ago

Things like this is what prevents capable inventors from taking the necessary risk to develop a truly innovative product. My wish is for there to be better legal protection for entrepreneurs bringing new products to the market, in order to encourage innovation and long difficult r+d work. My heart sinks every time I hear a story of copycats profiting off of the work of someone or some company that sank tons of hours and dollars into developing a unique product - going up down left right backwards forwards upside down right side up headfirst ass backwards - just to find a solution, and then to have all that effort once you’ve found the answer, be pulled from right under your feet because someone can do it better now that the answer has been discovered (because you put the hours to discover it). That’s just ducking awful. I remember seeing [this](https://www.google.com/amp/s/www.theverge.com/platform/amp/2019/4/2/18290492/in-the-making-series-lumio-pressy-kickstarter-knockoffs-dragon-innovation https://www.google.com/amp/s/www.theverge.com/platform/amp/2...) about a simple product and it made me so furious. The reality is it’s happening everywhere. China and Chinese culture of designer knockoffs and blatant copycatting needs to start playing fair and follow the same laws as everyone else if they expect to deal respectably in international markets. I’m wondering if with things like even the font being the same, wether or not the act of copycatting even registers as an offense to the people who do this. And to make it clear my stance isn’t against Chinese people, some of my favorite people in this world are Chinese, it’s against a government that condones and does little, or turns a blind eye when a company is doing the equivalent of removing padding from a boxing glove. If we can’t resolve something like this through verbal communication and legal action what other options do we have?

joyjoyjoy 7y ago
"Things like this is what prevents capable inventors from taking the necessary risk to develop a truly innovative product. My wish is for there to be better legal protection for entrepreneurs bringing new products to the market, in order to encourage innovation and long difficult r+d work." It has always be like this. Guess from who was Germany Stealing? China will become one of the biggest IP proponents soon and they will be bitching about others (India?) stealing their IP