Under the California Uniform Trade Secrets Act (CUTSA), and many other states’ trade secret acts, a plaintiff must identify its alleged trade secrets as a prerequisite to conducting discovery. Cal. Civ. Code § 2019.210. The Ninth Circuit recently held that the Defend Trade Secrets Act (DTSA) also includes this requirement to identify alleged trade secrets with sufficient particularity. The Ninth Circuit was considering whether the U.S. District Court for the Central District of California had abused its discretion in granting summary judgment for a defendant on CUTSA and DTSA claims by finding that the plaintiff had not identified its trade secrets with sufficient particularity without any discovery. (Spoiler alert: It did.)
Continue Reading Ninth Circuit Opens the Door to Modifying a Trade Secret Identification After Discovery
Two Tests for Trade Secret Preemption Under California Law
When does a cause of action come close enough to a trade secret claim to become preempted by the California Uniform Trade Secrets Act (“CUTSA”)? CUTSA preempts statutory and common law claims “based upon misappropriation of a trade secret.” In other words, with some exceptions, claims predicated on trade secret misappropriation allegations may only be asserted through a CUTSA claim.
California courts have articulated two different CUTSA preemption tests: (1) the “common nucleus” test and (2) the “dependence” test. In many cases, the two tests will yield the same result. Sometimes, however, the tests will produce divergent outcomes.
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Threatened Misappropriation Under CUTSA in Absence of “Inevitable Disclosure”?
Under the inevitable disclosure doctrine, an employer may prevent a former employee from working for a competitor by simply demonstrating that the employee possesses the employer’s trade secrets and the former employee’s new job duties will “inevitably” cause her to rely upon those trade secrets. The doctrine is not available in California. However, California employers may be able to rely upon a “threatened” misappropriation of trade secrets to protect against the same risk.
Continue Reading Threatened Misappropriation Under CUTSA in Absence of “Inevitable Disclosure”?