California Employment Lawyer

The Northern District applied California’s trade secret disclosure procedure, and found Plaintiff’s disclosure partially sufficient.  M.A. Mobile Ltd. v. Indian Institute of Technology Kharagpur, No. C08-02658 RMW (HRL), 2010 WL 3490209 (N.D. Cal. Sept. 3, 2010) (slip op.).

Plaintiffs M.A. Mobile Ltd. and Mandana D. Farhang sued for breach of contract and trade secret misappropriation regarding a technology that enables dynamic, real-time parsing of data on mobile handheld devices. Id. Plaintiffs contend that defendants duped them into entering a sham joint venture to obtain and then exploit plaintiffs’ claimed trade secrets for themselves. Id. Plaintiffs sought an order deeming their trade secrets disclosure sufficient. Id. The court partially granted the motion. Id.

Plaintiffs’ Trade Secret Disclosure

Applying California’s trade secrets procedure codified in California Code of Civil Procedure section 2019.210, the court wrote that a “plaintiff suing for misappropriation of trade secrets must identify them with ‘reasonable particularity’ before commencing discovery related to the claimed secrets.” Id. (citing Cal. Code Civ. Proc. § 2019.210).  A defendant is entitled to “reasonable notice of the issues which must be met at the time of trial and to provide reasonable guidance in ascertaining the scope of appropriate discovery.” Id. (citing Diodes, Inc. v. Franzen, 260 Cal. App. 2d 244, 253, 67 Cal. Rptr. 19 (1968)).  The court described the standard as follows:

Trade secret identification does not require ‘every minute detail’ of the trade secret or the ‘greatest degree of particularity possible.’ ” Id. at 1346, 101 Cal.Rptr.3d 211 (quoting Advanced Modular Sputtering, Inc. v.Super. Ct., 132 Cal.App.4th, 826, 830-31, 33 Cal.Rptr.3d 901 (2005)). “Nor does section 2019.210 envision a ‘miniature trial on the merits of a misappropriation claim before discovery may commence.’ ” Id. (quoting Advanced Modular, 132 Cal.App.4th at 835-36, 33 Cal.Rptr.3d 901). “[W]here ‘the alleged trade secrets consist of incremental variations on, or advances in the state of the art in a highly specialized technical field, a more exacting level of particularity may be required to distinguish the alleged trade secrets from matters already known to persons skilled in that field.’ ” Id. (quoting Advanced Modular, 132 Cal.App.4th at 836, 33 Cal.Rptr.3d 901). However, “when the nature of the alleged trade secret or the technical field in which it arises makes a detailed description alone inadequate to permit the defendant to learn the limits of the secret and develop defenses or to permit the court to understand the secret and fashion discovery, the court may require an explanation of how the alleged trade secret differs from matters known to skilled persons in the field as necessary to satisfy those needs.” Brescia v. Angelin, 172 Cal.App.4th 133, 150, 90 Cal.Rptr.3d 852 (2009). Nevertheless, “[u]nder this flexible standard, absent a showing that the identification of the alleged trade secret alone lacks the particularity necessary to serve the statutory purposes, the trade secret claimant need not specify how the secret or its elements are distinguishable from matters known to skilled persons in the field.” Id. at 149.

Plaintiffs’ disclosure of the claimed trade secrets fell into four categories: (1) Plaintiff’s Technology; (2) “Source Code and a CD Containing a Prototype of the Technology”; (3) “Copies of Non-Published Provisional Patent Documentation, the Pending Patent Application, and Related Documentation”; (4) “Critical and Confidential Market Intelligence, Market Analysis and Marketing Strategy Regarding Specifics for Implementation and Marketing of the Technology to Prospective Partnerships.” Id. *3.

First, plaintiffs described the subject technology as “a standards-based, mobile application development environment that enables development and full execution of enterprise level applications on mobile devices without requiring a wireless connection.” Id. And the “core” of the technology was described as “a novel mobile markup language intended to replace the universally known Wireless Markup Language defined and promoted by the well recognized and accepted Wireless Application Protocol.” Id. Additionally, plaintiffs stated that the claimed trade secrets are also specifically described in their pending patent provisional application (non-public status) and a non-provisional application, which are identified by title, filing date, and application serial number(s). Id. The court found this description sufficient.

The court analyzed the remaining 3 categories as follows:

2. “Source Code and a CD Containing a Prototype of the Technology”

The gist of this portion of plaintiffs’ disclosure is that (a) the claimed trade secrets are also embodied in specific source code; (b) plaintiff Farhang gave defendants a CD containing this source code and a confidential prototype of the mobile technology application; and (c) defendants possess “a CD and other documentation” that reportedly contain enhancements that defendants claim to have created and which plaintiffs contend really belong to plaintiffs or to the purported joint venture. (Jacobs Decl., Ex. A at 6-7). Insofar as plaintiffs contend that certain of these materials were not properly returned to them, they should clarify this in an amended disclosure. (This is especially true with respect to the “CD and other documentation” reportedly containing “enhancements,” which the disclosure seems to indicate defendants kept and returned to plaintiffs). Plaintiffs’ disclosure of these materials is otherwise sufficient to give defendants reasonable notice of the issues which must be met at the time of trial and to provide reasonable guidance in ascertaining the scope of appropriate discovery.

3. “Copies of Non-Published Provisional Patent Documentation, the Pending Patent Application, and Related Documentation”

Here, plaintiffs say that their “Pending Patent Application and related documentation” previously were provided to defendants pursuant to a non-disclosure agreement. These documents apparently are the same patent application materials identified in Category 1. The reference to “related documentation” is vague. Nonetheless, as discussed above, the applications themselves are specifically identified, and plaintiffs say that the referenced documentation shall be made available to defendants in discovery after a protective order is entered. Plaintiffs’ motion as to the sufficiency of this portion of their disclosure is granted.

4. “Critical and Confidential Market Intelligence, Market Analysis and Marketing Strategy Regarding Specifics for Implementation and Marketing of the Technology to Prospective Partnerships.”

Plaintiffs’ disclosure identifies five subcategories of “business implementations and marketing strategies” that they claim are trade secrets. As to subcategories (i) and (iii)-(v), plaintiffs should serve an amended disclosure which identifies the particular methods, specifications, and marketing intelligence claimed to be trade secrets. Plaintiffs assert that these alleged secrets are contained in several sealed exhibits appended to their Third Amended Complaint. However, those documents appear to include public information and other seemingly non-trade secret information. Defendants should not have to comb through plaintiffs’ 148-page pleading and exhibits to determine what is being claimed as trade secret “business implementations and marketing strategies” and what is not. Brescia, 172 Cal.App.4th at 150, 90 Cal.Rptr.3d 842. As for subcategory (ii), defendants seem to dispute whether the identified information could truly be trade secrets, but this court finds that plaintiffs’ disclosure gives defendants reasonable notice of the issues which must be met at the time of trial and to provide reasonable guidance in ascertaining the scope of appropriate discovery.

Id. **3-5.

Judge

United States Magistrate Judge Howard R. Lloyd.

By CHARLES JUNG