California's Pre-Discovery Trade Secret Identification Statute Applies to Related Claims, But Should Not Be Applied Too Strictly

Case: Advanced Modular Sputtering, Inc. v. Superior Ct. of Santa Barbara (Mishin), No. B181405 (Cal. 2d App. Dist. 9/13/05)

The Two Sentence Summary: Section 2019.210 of the California Code of Civil Procedure, which requires identification of trade secrets with reasonable particularity before commencing discovery, applies to any cause of action alleging misappropriation of trade secrets (not just actions under the Uniform Trade Secrets Act). The statute requires only reasonable (fair, proper, just or rational) identification of the trade secrets with disputes as to identification to be resolved in favor of allowing discovery to proceed.


What They Were Fighting About: Section 2019.210 provides: "In any action alleging the misappropriation of a trade secret under the Uniform Trade Secrets Act (Title 5 (commencing with Section 3426) of Part 1 of Division 4 of the Civil Code), before commencing discovery relating to the trade secret, the party alleging the misappropriation shall identify the trade secret with reasonable particularity subject to any orders that may be appropriate under Section 3426.5 of the Civil Code." Several attempts by the plaintiff to identify its trade secrets were rejected, and ultimately, discovery was barred on the trade secret claims but allowed to proceed on related claims. These discovery rulings were appealed by a writ.

California Appellate Court Holdings:

• Section 2019.2 applies to any cause of action alleging misappropriation of a trade secret, not just actions brought under the Trade Secret Act: "Where, as here, every cause of action is factually dependent on the misappropriation allegation, discovery can commence only after the allegedly misappropriated trade secrets have been identified with reasonable particularity, as required by section 2019.210."
• The trial court's rejection of the trade secret designations offered by plaintiff was too strict - a reasonable identification is all that is required: "'Reasonable particularity' mandated by section 2019.210 does not mean that the party alleging misappropriation has to define every minute detail of its claimed trade secret at the outset of the litigation. Nor does it require a discovery referee or trial court to conduct a miniature trial on the merits of a misappropriation claim before discovery may commence. Rather, it means that the plaintiff must make some showing that is reasonable, i.e., fair, proper, just and rational[,] (See City of Santa Cruz v. Municipal Court (1989) 49 Cal.3d 74, 90), under all of the circumstances to identify its alleged trade secret in a manner that will allow the trial court to control the scope of subsequent discovery, protect all parties' proprietary information, and allow them a fair opportunity to prepare and present their best case or defense at a trial on the merits. (§ 2017.010; Greyhound Corp. v. Superior Court (1961) 56 Cal.2d 355; Calcor Space Facility Inc. v. Superior Court (1997) 53 Cal.App.4th 216, 223-224; Diodes, Inc. v. Franzen, supra, 260 Cal.App.2d at p. 253.)"
• When credible experts disagree as to whether the trade secrets have been adequately identified, discovery should be allowed to proceed: "Where, as here, credible experts declare that they are capable of understanding the designation and of distinguishing the alleged trade secrets from information already known to persons in the field, the designation should, as a general rule, be considered adequate to permit discovery to commence. Our discovery statutes are designed to ascertain the truth, not suppress it. Any doubt about discovery is to be resolved in favor of disclosure."