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November 2011

Stop Light Texting a No-No

By Blog, Intellectual Property Law, Litigation

California law prohibits anyone driving on public roadways from using a wireless telephone unless the phone is configured for hands-free listening and talking and used in that manner while driving. Carl Nelson is one person who would not willingly accept the ticket he received for his phone while stopped at a stop-light.

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Identifying Trade Secrets with “Reasonable Particularity”: What is Required?

By Trade Secrets - News & Publications

by Andrew Holland

In California, one of the most hotly contested issues in trade secret litigation is whether a plaintiff has identified the alleged trade secrets with the specificity required by California’s civil discovery statutes. Code of Civil Procedure section 2019.210 requires that a plaintiff alleging misappropriation of trade secrets identify the trade secrets with “reasonable particularity” prior to commencing discovery. Section 2019.210 (former § 2019, subd. (d)), was intended to protect a defendant from potentially costly discovery until a complainant has described “the subject matter of the trade secret with sufficient particularity to separate it from matters of general knowledge in the trade or of special knowledge of those persons who are skilled in the trade, and to permit the defendant to ascertain at least the boundaries within which the secret lies.” (Diodes, Inc. v. Franzen (1968) 260 Cal.App.2d 244, 251, 253.)
Unfortunately, because of the lack of uniformity in published cases and the lack of guidance on the degree of detail necessary to meet the standard, the ambiguity of the phrase “reasonable particularity” often results in discovery disputes.
Plaintiffs will frequently contend that a list of general categories and concepts is sufficient to identify their alleged trade secrets, supported by cases consistent with their position. In Whyte v. Schlage Lock Co. (2002) 101 Cal.App.4th 1443, for example, general descriptions such as pricing of products sold to customers, profit margins and market research data were found sufficient.
Defendants, on the other hand, will typically argue that plaintiff’s list of general categories and concepts are too generic and insufficient to meet the “reasonable particularity” standard of Section 2019.210. They find support in cases such as Myrio Corp., 2001 U.S. Dist. LEXIS 10461, where the court required that plaintiff serve an Amended Identification of Trade Secrets, and it ordered that the alleged trade secrets be concisely described in narrative form.
A recent decision by the California Court of Appeal, Second Appellate District, provides guidance on this conflict, and attempts to strike a balance. In Brescia v. Angelin (2009) 172 Cal. App.4th 133, the Court of Appeal concluded that Section 2019.210 “does not require in every case that a trade secret claimant explain how the alleged trade secret differs from the general knowledge of skilled persons in the field to which the secret relates. Rather, such an explanation is required only when, given the nature of the alleged secret or the technological field in which it arises, the details provided by the claimant to identify the secret are themselves inadequate to permit the defendant to learn the boundaries of the secret and investigate defenses or to permit the court to understand the designation and fashion discovery.” (Id. at 139.)
In Brescia, a dispute arose after respondent refused to provide discovery to claimant on the basis that he had not identified his trade secrets with “reasonable particularity”. The claimant named two alleged trade secrets: his pudding formula and his manufacturing process. He claimed that his formula produced a unique high-protein, low carbohydrate pudding unlike any other healthy alternative pudding on the market, and he listed the fifteen ingredients by common name and the percentage of the total pudding. Claimant also listed the same fifteen ingredients by their supplier and brand name, and he described each step in the mixing, testing, and code marking of the pudding. While this level of specificity seems adequate to alert respondent what formula and process comprise the alleged trade secrets, respondent argued that the description did not meet the “reasonable particularity” standard because it did not permit respondent to ascertain whether and in what way the information is distinguished from matters already known, and to permit the court to fashion appropriate discovery. The Court disagreed and concluded that claimant’s showing was adequate to permit respondents to prepare a defense.
Brescia is significant because it balances the important policy considerations behind Section 2019.210. On the one hand, the statute attempts to ensure that defendants understand the specific claims against them so that they can prepare an adequate defense. At the same time, Brescia limits a defendant’s ability to try to exploit Section 2019.210 in order to prevent a plaintiff from commencing discovery. Finally, in its analysis the Court emphasized the flexibility that courts have in determining the degree of particularity that is reasonable in each case. When more sophisticated technologies, for example, are at issue, courts will almost certainly require a plaintiff to be more specific when identifying their alleged trade secrets. Similarly, if the technology at issue is not complex, general categories and concepts may satisfy the “reasonable particularity” standard of Section 2019.210.

1 In Advanced Modular Sputtering v. Superior Court (2005) 132 Cal.App.4th 826, the Court of Appeal noted that the phrase “reasonable particularity” is deliberately vague so that the trial court has sufficient flexibility to achieve a just result based on the unique facts of each individual case. (Id. at 835.)