US court rejects Magic Leap claim that Nreal founder stole mixed-reality secrets

A federal judge said Magic Leap's claims were unsubstantiated.

Sam Barnes via Getty Images

Augmented-reality headset maker Magic Leap made a fairly serious accusation last year, when it claimed that former employee Chi Xu had used “stolen” company secrets to set up his own business, Nreal. The Beijing-based Nreal made waves at CES in 2019 with its $499 mixed reality glasses, which Magic Leap said were “strikingly similar” to the Magic Leap One device. Now though, a federal judge has thrown out the case.

Following Nreal’s motion to dismiss Magic Leap’s original lawsuit, the United States District Court of Northern California ruled that Magic Leap didn’t adequately allege that Xu exploited proprietary information to build his own mixed-reality glasses. In other words, Magic Leap failed to make any viable claims.

The decision comes at a tumultuous time for Magic Leap, which has suffered weak sales leading to a renewed focus on enterprise tech, instead of consumer products. The company — which is reportedly still trying to find a buyer — laid off some 1,000 employees, or half its workforce, earlier this year.