Apple's attorney painted a scary picture if Apple loses its fight with the FBI.

In an interview with CNNMoney's Laurie Segall on Friday, Ted Olson warned of a government with "limitless" powers that could "listen to your conversations."

Olson said the demands would mount.

"You can imagine every different law enforcement official telling Apple we want a new product to get into something," Olson said. "Even a state judge could order Apple to build something. There's no stopping point. That would lead to a police state."

The government is trying to force Apple to create new software allowing the FBI to break through the passcode of an iPhone used by the San Bernardino shooter. A magistrate Judge initially ruled in the government's favor, but a final hearing will be held on March 22.

Apple (AAPL) says the software will create a back door that will potentially allow anyone to break into millions of iPhones around the world.

"Apple is being asked to put an Achilles heel on the iPhone," Olson said. "The iPhone's security is the reason why many, many people bought the phone."

Related: Apple tells court that the government can't force it to write code

Olson said that Apple is "very sensitive" to national security and efforts by law enforcement to protect American citizens. He said that Apple has complied with every "legal" request by law enforcement for customers' data.

But in the case against the FBI, Olson said the government overstepped its legal authority. He said Apple's stance hasn't changed -- instead, it's the government's request that has changed and become more expansive than ever.

"It's very easy to say 'terrorism is involved' and therefore you should do whatever the government wants to do," he said. "But just because you're using the word 'terrorism,' you don't want to violate the civil liberties that all of us cherish."

Though he declined to say how far Apple plans to go in its court battle -- "we are a long, long way from that" -- he said that this is the kind of precedent-setting case that could go to the Supreme Court.

If the Supreme Court rules against Apple, though, he said Apple would go along with the ruling.

Meanwhile, Olson noted that Apple continues to upgrade the security of its iPhones. CNNMoney has reported that Apple is working on developing an iPhone that even it can't break into.

"Apple is constantly trying to improve its iPhones ... so that people can't hack in and find out where your children are or what your medical records are," he said. "So if Apple continues to do that, it's just a point at which the government just can't get into your soul. We have got to have a stopping point."

- Erica Fink contributed reporting to this story.