Meta Platforms Must Face Trial Allegedly Stealing Neural Magic Algorithm

Neural Magic sued Meta, on charges of stealing the algorithm. (photo: twitter @neuralmagic)

JAKARTA - Meta Platforms Inc. lost its bid to end a lawsuit in Boston federal court on Monday, March 6 claiming that the company stole confidential information from artificial intelligence startup Neural Magic Inc.

"Meta will face trial on charges that they took a Neural Magic "breakthrough" algorithm that allows artificial intelligence systems to process information more quickly," US District Judge Denise Casper said in a statement.

The court also allowed testimony from an expert who said Meta owed Neural Magic $766 million in royalties.

Representatives for Meta and Neural Magic have yet to comment on the decision. The trial is currently scheduled to begin in September.

Somerville, Massachusetts-based Neural Magic was founded by two Massachusetts Institute of Technology researchers. Its investors include venture capital firm Andreessen Horowitz, VMware, Comcast and Verizon, according to its website.

Neural Magic sued Meta, then known as Facebook, in 2020 for stealing algorithms that allow simple computers to perform complex mathematical calculations more efficiently and allow research scientists to use larger amounts of data.

The lawsuit says Meta hired a Neural Magic computer scientist, Aleksandar Zlateski, who provided the algorithm to the social media giant which is the "heart" of Neural Magic's technology.

Neural Magic said Meta published the algorithm on the open-source website GitHub and thanked Zlateski for an important milestone for Facebook's advancement in the world of artificial intelligence.

Meta asked the court to dismiss the lawsuit last year, claiming that Neural Magic failed to identify a protectable trade secret and that Zlateski did not obtain the information illegally. However, last Monday, the court allowed the Neural Magic lawsuit to continue except for one of the 41 secrets Neural Magic accused Meta of being abused.

Casper granted part of Meta and Zlateski's requests, rejecting Neural Magic's claims that they violated non-competition clauses or engaged in unfair business practices under Massachusetts law.