UnIP (UnIntellectual Property): Trade Secret for Software

Applying the California Uniform Trade Secrets Act (CUTSA), the District of Delaware granted Defendant Cisco’s motion for summary judgment as it relates to Plaintiff’s claim for trade secret misappropriation.  Plaintiff had claimed that it owned a trade secret for software and that Cisco had misappropriated it.  In what is a recurring theme in trade secret misappropriation cases involving software, Cisco had sought additional particularity with respect to the claimed trade secret.  The Court ordered the same, and Defendant provided a Supplemental Response to the interrogatory.  Nevertheless, the Court held that Plaintiff did not state a protectable trade secret for its software.

In doing so, the Court recognized that the parties cited many of the same cases, but came to different conclusions (SHOCKING I know).  The Court noted that “[t]he cases provide that a trade secret consists of information, not ideas; a trade secret is actual, not theoretical; a trade secret is specific, not general.”  It went on to elaborate:

“a description of a software methodology implementing “features, functions, and characteristics of the design and operation” characterizes the “underlying design” and not the information therein or related source code, and fails to describe a trade secret with sufficient particularity… Descriptions must clearly refer to tangible trade secret material, not an overall system that potentially qualifies for trade secret protection…Narratives that explain the nature of the information in very general terms are insufficient...descriptions that “effectively assert[ ] that all information or about [the plaintiff’s] software is a trade secret,” by describing the “methods and processes underlying and the inter-relationships among various features making up [the plaintiff’s] software package,” are too broad.”


Applying these principles, which I submit are not easy to apply, the Court found that 46 of the Plaintiff’s trade secrets were not worthy as they merely mirrored the methodology implementing certain features and narratives set forth in the cases reviewed.  Importantly, the Court went on to state that “None of XU’s descriptions designate any information or identify any source code; they are very general recitations of processes implementing equally general features, structures, design considerations, and platforms.”  The Court did find that 2 of Plaintiff’s alleged trade secrets had sufficiently particular descriptions, namely references “to specific architecture diagrams and system and logic diagrams that contain the information underlying the narratives,” but ultimately found no misappropriation.

I have said it before, and I will say it again, trade secret misappropriation cases in the software realm are extremely difficult for plaintiffs.  I have litigated these kinds of cases.  Starting with the code is good, but not always enough.  My practice pointer is that if the judge expresses uncertainty as to whether the identification of the software trade secret is sufficient, even if she ultimately deems that it is for purposes of stating a claim, be weary of your ultimate ability to establish a protectable trade secret.  Have your experts, educate the judge by whatever means possible, and recognize that the more particular the identification becomes the more likely that it may appear as a trade secret.
XpertUniverse, Inc. v. Cisco Sys., Inc., 2013 WL 867640 (D. Del. Mar. 8, 2013).


Leave a Reply

Your email address will not be published.