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Identify Your Trade Secrets or Risk Dismissal of Misappropriation Claim

On May 7, 2014, in Trade Secrets, by Brian A. Hall

UnIntellectual Property (UnIP): Trade Secret for Software

The United States District Court for the Northern District of California has once again taught trade secret plaintiffs a hard lesson. The Court granted Defendant’s motion to strike Plaintiff’s trade secret misappropriation cause of action for failure to identify the trade secret, which was alleged to be recruiting software, with reasonable particularity.

In doing so, the Court analyzed the California Civil Code, namely Section 2019.210:

For each trade secret, plaintiff must file, and serve on counsel, a statement, under seal, that should include:

(1) a summary of the specific trade secret;

(2) the background of the trade secret and a description of how each secret has derived independent, actual or potential economic value by virtue of not being generally known to the public:

(3) a description of how each secret has been the subject of reasonable efforts to maintain its secrecy; and finally

(4) each of the precise claimed trade secrets, numbered, with a list of the specific elements for each, as claims would appear at the end of a patent.

Defendant provided a three-page narrative and three barely-legible schematics. No explanation was provided for the schematics other than to say a “representation of Jobscience’s proprietary process and efficient solution is reflected in the following schematic diagram and screen shot examples.” Having previously been warned, twice, by the Court that failure to provide additional identification or face dismissal, the Court finally dismissed the claim, without leave to amend.

This may sound harsh, but given the factual nature of trade secret misappropriation claims, especially when it comes to software, it aids in more efficient litigation. Interestingly here, Plaintiff still may be able to satisfy its copyright infringement claim, but we shall see given that the remainder of this Opinion discusses issues concerning expert analysis.

Jobscience, Inc. v. CVPartners, Inc., C 13-04519 WHA, 2014 WL 1724763 (N.D. Cal. May 1, 2014).