To Sue for Theft of Your Trade Secrets in California, You May First Have to Give Them Away

Orrick - Trade Secrets Group
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https://jdsupra-html-images.s3-us-west-1.amazonaws.com/4dce022f-b597-4931-8b14-009c86dfe91b-shutterstock_110363654-200x150.jpgCalifornia trade secret litigators likely know all about California Code of Civil Procedure Section 2019.210.  Those that don’t, should.

Section 2019.210 provides that before commencing discovery in a trade secret litigation, the party alleging trade secret misappropriation must identify the allegedly stolen trade secret “with reasonable particularity.”

For plaintiffs, this rule is no joke.  It has sent many a plaintiff back to the drawing board trying, again and again, to adequately identify their stolen “special sauce.” It can be supremely frustrating.  A plaintiff certain that a defendant stole something can’t just conduct discovery to figure out what.  Instead, the plaintiff has to identify, in advance, what it thinks defendant stole.

It can also be supremely worrisome.  Imagine a company with five key trade secrets.  Now imagine that company loses an employee to a competitor.  Now imagine that the company learns that the former employee took a briefcase full of documents with her, but the company doesn’t know which documents.  The company wants to sue the former employee and her new employer.  To get any discovery in the case, the company needs to identify the stolen trade secrets.  But which trade secrets does it identify?  All five?  What if the former employee only took documents pertaining to one of the five key trade secrets?  Then isn’t the company risking giving four of its trade secrets away?  It’s a serious concern.

For defendants, on the other hand, section 2019.210 can be a powerful weapon for fighting frivolous lawsuits and discovery requests.  Defendants can force plaintiffs to narrow their case, and their claims, until defendants actually know what they are being accused of having stolen.

Many states do not have a statute comparable to California’s Section 2019.210.  Plaintiffs looking to file lawsuits alleging theft of unspecified trade secrets should consider looking elsewhere.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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