Hunton Employment & Labor Perspectives

In California, employers litigating claims for misappropriation of trade secrets must identify those trade secrets with “reasonable particularity” before pursuing discovery.  See Cal. Civ. Proc. Code § 2010.210.  There is frequently an early litigation battle over what "reasonable particularity" means.  Earlier this month, a California Appellate Court recently analyzed this principle in Perlan Therapeutics, Inc. v. Superior Court (Nexbio, Inc.).  The Court initially emphasized the trial court’s broad discretion under section 2019.210.  The Court also warned against the use of catch-all language in the identification statement to preserve the ability to add additional trade secrets to the list after the plaintiff has commenced discovery.

In Perlan, the defendant alleged that its former employees misappropriated its trade secrets relating to the development of treatments for viral infections.  Holding that the defendant did not sufficiently identify its trade secrets, the court applied the standard that “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.”  The court found that the defendant’s vague and conclusory descriptions of its alleged trade secrets failed to meet this standard.  Furthermore, the court disapproved the defendant’s attempt to use broad, catch-all language to preserve the ability to add additional trade secrets later in the case:  “Perlan [the defendant] is not entitled to include broad, catch-all language as a tactic to preserve an unrestricted, unilateral right to subsequently amend its trade secret statement.  If Perlan does not know what its own trade secrets are, it has no basis for suggesting defendants misappropriated them.  Nor is Perlan entitled to hide its trade secrets in plain sight by including surplusage and voluminous attachments in its trade secret statement.”