By: Partners Dana J. Finberg & C. Quinn Adams

The warring parties in trade secrets cases often disagree about when the plaintiff must provide a particularized identification of its alleged trade secrets and how much specificity is required. Three recent federal district court opinions drive home an important point—the identification requirement is heightened at the summary judgment stage and the consequences of failing to meet that requirement are substantial. Those same consequences extend to post-trial relief as well.

On August 12, 2024, the U.S. District Court for the District of Utah granted summary judgment for the defendants in Applied Predictive Technologies, Inc. v. MarketDial, Inc. et al., No. 2:19-cv-496, after finding that none of the plaintiff’s alleged trade secrets were “sufficiently identified or defined as to allow submission under either the federal or state trade secrets claims[.]” (Full disclosure: O’Hagan Meyer represented the defendants in this case.) The District Court explained that “[i]n the trade secrets context, summary judgment properly acts as a filtering mechanism to prevent the submission to a jury of trade secret claims that would demand the jury ‘to hunt through the details in search of items meeting the statutory definition’ of a trade secret.” This is because “[a]t summary judgment, there is ‘no presumption’ of a protectable trade secret… and to avail itself of the benefits of the instructional jury trial, a plaintiff is obliged to reveal what the trade secret is, what it is not, and why it is valuable.”

The District Court explained that this identification requirement is particularly important where the plaintiff asserts multiple compilation trade secrets. It elaborated, “in the case of compilation trade secrets consisting of other compilations of trade secrets, these demands for specificity are necessarily heightened yet again, preventing a free-fall into abstraction or confusing the jury.” The District Court warned trade secret plaintiffs that “it is not enough to place on the doorsteps of the court volumes of expert reports, technical documents, and other materials (or incorporate such materials by reference through string cites in memoranda), insist that somewhere in all of it lies bits and pieces of information that could be assembled in such a way that resembles the statutory definition of a trade secret, and declare that there is a genuine issue as to a material fact…. To do so is to treat the court or the finder of fact like a ‘pig[], hunting for truffles buried in briefs.”

Another plaintiff’s trade secret misappropriation claims met a similar fate in Double Eagle Alloys, Inc. v. Hooper, No. 19-cv-243, a case litigated in the U.S. District Court for the Northern District of Oklahoma. In a June 25, 2024, opinion, the District Court entered summary judgment for the defendant after finding that plaintiff “failed to identify its alleged trade secrets with sufficient particularity and clarity to proceed to trial.” It explained that “[a] party seeking trade secret protection must, at a minimum, describe the boundaries of the trade secrets in a manner that would permit the Court to understand whether trade secret protection is being claimed with respect to individual files or a combination thereof, evaluate whether the information (in whole or in combination) is publicly available, and rule on motions in limine and evidentiary challenges.” Because the plaintiff failed to identify the alleged trade secrets “with sufficient particularity to permit the Court to perform these essential functions” and “failed to set forth evidence from which a jury could find that it holds a trade secret in the information” at issue in the case, the Court granted summary judgment for the defendant.

Finally, on August 14, 2024, the U.S. District Court for the Western District of Washington granted a defendant’s post-trial motion for judgment as a matter of law and vacated a $70 million jury verdict in Zunum Aero, Inc. v. The Boeing Company, et al., No. C21-0896, after concluding that the plaintiff failed to adequately identify its alleged trade secrets at trial. The District Court explained that the plaintiff’s trade secret claims failed as a matter of law because the plaintiff “failed to tell the jury what its trade secrets were” and its identification lacked the “require[d] precision.” The District Court described the plaintiff’s retort that it “was not required to recite its pleadings and claims to the jury in lengthy dissertations” as a “straw man.” As the District Court explained, “[c]larity does not require a tome. It does, however, require a plaintiff to take the time to ‘separate [its] trade secrets from other information’ known to or ascertainable by the industry[.]” Because the plaintiff “offered only vague and amorphous descriptions of its alleged trade secrets throughout trial” it “fell well short of providing the ‘specific, concrete examples’ the jury needed to determine whether the alleged trade secrets were in fact trade secrets.” Furthermore, the District Court concluded that the plaintiff offered only “conclusory testimony that its alleged trade secrets met the statutory definition of a trade secret.”

While it is relatively easy (too easy, many defense counsel would argue) to identify alleged trade secrets with sufficient particularity to survive a motion to dismiss at the outset of a case, the MarketDial, Eagle Alloy, and Boeing cases make it clear that the bar rises and the litigation progresses. Federal courts describe summary judgment as the “put up or shut up moment in a lawsuit.” The MarketDial and Eagle Alloys decisions show that a plaintiff’s failure to “put up” by identifying asserted trade secrets with particularity will lead to the court “shutting up” the case with summary judgment. The Boeing case is a warning to plaintiffs who manage to survive summary judgment with vaguely identified trade secrets that they still face the risk of a pyrrhic victory at trial if they offer those same vague descriptions to the factfinder.

Partners Dana J. Finberg and C. Quinn Adams are members of the firm’s Trade Secrets & Restrictive Covenants and Intellectual Property practice groups. Our attorneys counsel clients on best practices for identifying and protecting their valuable trade secrets. We help our clients draft and implement trade secret policies consistent with the federal Defend Trade Secrets Act, the Uniform Trade Secrets Act, and related state laws, including employment and non-disclosure agreements for personnel with access to trade secrets. While we strive to keep our clients out of litigation, when the need arises our experienced litigators often represent companies seeking to enforce their trade secret rights, as well as companies and individuals accused of trade secret misappropriation.