Steve Wozniak Sued Over Theft of Business Idea

• Apple cofounder Steve Wozniak has been sued over the theft of a business idea from a professor.
• Ralph Reilly approached Wozniak about making a branded tech school in 2010 but it didn’t pan out.
• Wozniak later made one without Reilly, and said “I doubt it would have happened” without his idea.
• See more stories on Insider’s business page.

In early 2011, at a luncheon at Sacramento’s Hyatt Regency hotel, Apple cofounder Steve Wozniak clasped hands with a Connecticut business professor named Ralph Reilly.

According to Reilly, the pair had agreed to establish a futuristic “tech university,” sealing the deal with an on-camera handshake. It was an ambitious plan for a 21-century educational platform to teach adults much-needed technical skills, using Wozniak’s name and legendary status as cofounder of the world’s most iconic computing company to brand the institution.

But Wozniak has a different recollection. The veteran engineer often known as “Woz” has said the meeting was one of dozens of photo-ops he conducts on a near-daily basis with his fans and admirers — so mundane he doesn’t even remember the photograph being taken.

Despite further emails and meetings, the partnership never got off the ground — and has erupted into a million-dollar lawsuit, Insider has learned. Reilly alleges that Wozniak stole his intellectual property and infringed on his copyright by launching a Woz-branded tech school without him, while Wozniak’s team counters that he never had a real deal with Reilly and that he’s inundated with business proposals from admirers.

The yearslong legal proceedings offer a rare window into the life of Apple’s second-most-famous founder, as well as how tech celebs can cash in on their reputations with lucrative deals and partnerships for decades — and how it can all go wrong.

Such lawsuits are common in the chaotic world of startups, as entrepreneurs and business partners litigate over ownership and execution. And Wozniak’s celebrity status, friendly manner, and hands-off approach to business appears to blur the line between business deal and fan interaction.

The copyright infringement case is set to go to trial in June in Arizona, and Wozniak has been called to the stand to testify.

From Apple cofounder to laid-back entrepreneur

Despite decades of entrepreneurship, Steve Wozniak says he has little control over his business dealings — a claim central to his defense.

The Apple cofounder takes a determinedly hands-off approach to business endeavours, leaving contract negotiations to business partners, like his manager Ken Hardesty, he said in a legal deposition ahead of the trial. So when lawyers asked Wozniak whether he received a $1 million payout for his association with Woz U, the school later started without Reilly, he couldn’t say for sure whether he was ever paid for the deal, or even how much money he has. (In a separate deposition, Hardesty confirmed Wozniak got the cash.)

“One thing I avoid in life is anything having to do with money,” he said. “I just don’t look at it … I wouldn’t know how much is in our bank account. My life is very different than most people.”

This unusual life dates to the 1970s, when Woz helped spark the personal-computing revolution. 

He was one of the three creators of Apple Computer Company in 1976, along with the late Steve Jobs and the lesser-known Ronald Wayne. The then 25-year-old Californian was the key engineering mind behind some of its earliest products, including the Apple I and II computers.

In the years since Woz parted ways with the company in 1985, Apple has grown from high-end computer maker to unassailable corporate titan — redefining tech and society with products ranging from the iPod to the iPhone. And as Apple’s star has risen, so has Wozniak and his associations with the now legendary Jobs.

Wozniak, 70, has kept busy in the decades since. He’s done philanthropy work, become a regular on the technology industry conference circuit, and jumped from project to project, offering business partners the prestige of working with an Apple cofounder. (He did not respond to a request for comment.)

In 2017, he became an advisor to hologram emoji startup Mojiit, and in late 2020 he helped spin up Efforce, a blockchain startup focused on “energy efficiency” that calls its tradable tokens “WOZX.” 

Wozniak even made an appearance on “Dancing With The Stars” in 2009, bedecked in a feathery pink boa.

‘Woz has hundreds of fans like you, who have met him somewhere’

In January 2012, Reilly and Wozniak met for the second time, at the San Francisco office of the Apollo Group, which runs the for-profit college University of Phoenix. Reilly hoped that Apollo would help turn his idea into a reality.

Apollo (which is now called Apollo Education Group, and is distinct from the asset management giant of the same name) proposed its own licensing agreement with Wozniak, which would let the school use his name and image, and would require the tech executive to record two lectures to broadcast to the entire school, according to a pitch deck included in Reilly’s complaint. 

But for the time-crunched Wozniak, even two recorded lectures was two too many. “Nothing ever came out of it,” Hardesty, Wozniak’s business manager, said in a deposition. “It was a meeting. It was a meet and greet.” Wozniak would later claim that he didn’t even remember Reilly being in the room. 

It was a disappointing outcome for the University of Hartford professor.

Reilly, an associate professor of management, keeps a low public profile. His online biography cites unspecified “broad business experience in technical industries and diverse teaching experience,” and a background in computer science. A lawyer for Reilly declined to comment about his background or the case.

The academic had first broached the possibility of a Woz university with the Apple cofounder via email one Sunday evening in September 2010. “Steve Woz, I really want to start a high tech university, any thoughts!?” he wrote, according to copies of the emails included in court filings.

Wozniak, who prides himself on being accessible to his fans, emailed back within a couple of hours. He was too busy to help, he wrote, but offered the Connecticuter some advice. “Great idea. It will take some time but do it right.”

Reilly was emboldened by Woz’s attention, and followed up a few days later with a bigger, more specific proposal. “Would you consider endorsing the idea of ME starting the Woz Institute of Technology?” he wrote on September 22, 2010.

“Cool…ok to use name…” Woz replied in an email included in the court documents. “I’ll get more involved eventually but right now life is crammed.”

The pair would continue to go back and forth over a period of months as Reilly searched for a college to make the Woz Institute of Technology a reality. 

At first it seemed like it might work out with an online school in Connecticut that Reilly had connections to through his son’s t-ball team. While in Sacramento for the 2011 meet-and-greet, Reilly presented Wozniak with a contract that granted the college the right to use his name and image for the “Woz School of Technology” in exchange for quarterly payments. 

Six dotted lines bore the same signature: “Woz.” In his deposition, Wozniak said he didn’t remember signing it but didn’t dispute it was his signature. “It probably wasn’t important enough to even remember,” he said. “I don’t do business. If there’s any business, you’re going to have to go through my business partners.”

When that plan didn’t work out, Reilly probed Wozniak about whether he should find another institution to work with, leading to a key email at the center of Reilly’s eventual claim that Wozniak stole his intellectual property. “I have no time so whatever you want to try,” Wozniak wrote in December 2011. “I figure it’s your idea.” 

Early the following year they met with Apollo together, but that didn’t pan out either.

By early 2013, Wozniak’s team was backing away from any possible partnership with Reilly. Hardesty emailed the professor demanding that he take down a mock-up website for the Woz Institute of Technology, denying there was a “Original Plan or Joint Venture ever discussed,” and telling him to stop contacting Wozniak directly.

“Please realize Woz has hundreds of fans like you, who have met him somewhere, when he has a break for a little time, he likes to meet and talk with fans, then a short time later 90% of his fans start e-mailing with business ideas,” Hardesty wrote curtly. “At times, he tries to meet with everyone he can, you were a lucky one.”

Reilly had obtained copyright protection for the website mock-up, and it is now at the heart of the case — even as Wozniak’s lawyers counter that there’s no evidence that Wozniak ever even looked at it.

The birth of Woz U

In the fall of 2017, Wozniak unveiled Woz U, a new plan to reinvent higher education in technology.

Despite the Wozniak brand, Woz U was built on top of existing code-learning company Coder Camps. The program billed itself as a skill-focused educational program to help students learn the fundamentals to move into the industry. 

“My entire life I have worked to build, develop and create a better world through technology and I have always respected education,” Wozniak said in the announcement. “Now is the time for Woz U, and we are only getting started.”

One name not mentioned in the announcement: Ralph Reilly. 

Headquartered in Phoenix, AZ, Woz U went on to announce an array of educational programs including partnerships with tech companies to recruit new talent, and plans for 30 physical campuses across the United States.

It was formed after Coder Camps reached out to Wozniak’s team to license his name, and Wozniak’s lawyers argue his hands-off approach to the namesake business makes it impossible for it to have infringed on Reilly’s intellectual property. “Wozniak did not provide any curriculum, ideas on programs, schedules or anything else to WOZ U in connection with the License Agreement,” they wrote in a court filing.

Since its launch, the company has faced significant challenges. In October 2018, CBS reported that some former students had frustrations with the quality of its educational content, including typos in learning material, pre-recorded lectures, and unqualified mentors. (One former salesperson told the outlet they used Wozniak’s prestige to entice prospective students to sign up.)

Facing pressure from regulators, Woz U surrendered its teaching license in Arizona in 2019, but continues to offer training courses for individuals, businesses, and educational institutions.

Woz takes the stand

Wozniak will soon take the stand in Arizona District Court as a witness in a three-day jury trial that starts on June 7. 

It’s the culmination of a nearly three year legal campaign by Reilly against the Apple cofounder that kicked off at the end of 2018. Reilly has sought at least $1 million in relief and damages, while Wozniak’s team flatly denies the allegations.

Some of Reilly’s accusations against Wozniak — including breach of contract — have already been dismissed by the judge. Instead, the case will hinge more narrowly on the legitimacy of Reilly’s copyright claims over the Woz Institute of Technology, and whether Wozniak and Woz U infringed upon them.

Legal disputes about the ownership of companies are common, but copying someone else’s business idea is not necessarily a crime, said Neel Sukhatme, an associate professor at Georgetown University Law Center.

“If I say I have an idea for a business, and this other individual does it, generally speaking I can create the same business as you. If I’m violating copyright or trademark — it’s a trademarked business, that’s one thing, if I’m copying your copyrighted material that’s another thing, if I have patent on an inventive concept, and you essentially go ahead and practice that invention, that’s patent infringement,” he said. “If there is no copyright or trademark protection, I do not see why Woz would not be able to make his own university … if there’s a contract in place, there could be damages in contract law.”

Still, at the heart of the matter is the question of whether Wozniak’s licensing deal with Woz U would have existed without Reilly’s initial idea. Reilly alleges that Wozniak’s own emails included in court filings answer that question.

Shortly after Woz U launched in 2017, Reilly emailed Wozniak, asking to be a part of the new project. “It’s exactly what I envisioned for Woz Institute of Technology when I first approached you with the idea,” Reilly said in the email.

The Apple cofounder responded a month later, on Christmas Eve, declining Reilly’s request while sending his own praise.

“You are right on the mark. You had the right idea,” he wrote. “I doubt it would have happened without your initial idea!” 

In the new year, Reilly pushed back, arguing that it was fundamentally his idea and that he “should have some ownership in the venture” as “at least a part owner.” 

Wozniak never replied.