Since May 11, 2016, owners of trade secrets have been able to pursue remedies against alleged misappropriators in federal court under the Defend Trade Secrets Act (DTSA). The first article in this two-part series assessed how courts have evaluated the sufficiency of allegations in complaints filed under the DTSA and proposed steps to avoid unnecessary pitfalls. This article explores how courts have treated the trade secret holder's disclosure obligations in cases brought under the DTSA, including whether, when, and how the “reasonable particularity” standard has been applied. Finally, this article provides practice tips for navigating discovery under cases brought under the DTSA.

Offensive Versus Defensive Discovery

Among the most critical issues for trade secret holders under the DTSA is whether, when, and how to disclose allegedly misappropriated trade secrets. As noted in the first article in this series, at the outset of the case, the complaint must put the defendants on notice of what is at issue but need not disclose trade secrets, for the simple reason that disclosure in a public complaint would destroy those trade secrets.

The plaintiffs' disclosure of trade secrets can potentially impact the entire case. Under both state law and under the DTSA, defendants often seek early, detailed, comprehensive disclosure of all trade secrets owned by the plaintiffs, while plaintiffs seek to engage in discovery of defendants so that they may focus their list of trade secrets on items at issue in the litigation. When applying the DTSA, federal courts may look to how courts have applied the Uniform Trade Secrets Act (UTSA), and, notably, different standards for trade secret disclosure apply in different venues. Some states—most notably California—require that a trade secret holder identify its trade secrets with “reasonable particularity” before obtaining discovery from defendants on related issues such as misappropriation. See Cal. Civ. Proc. Code § 2019.210. At best, this standard (1) promotes well-investigated claims and dissuade the filing of meritless trade secret complaints, (2) prevents plaintiffs from using discovery as a means to obtain a defendant's trade secrets, (3) assists the court in framing the scope of discovery, and (4) enables the defendants to form complete and well-reasoned defenses, without waiting until the eve of trial to effectively defend against charges of trade secret misappropriation. See Via Technologies, Inc. v. Asus Computer Int'l, Civ. A. No. 14-cv-03586, 2016 WL 5930280, *3 (Oct. 12, 2016). At worst, this standard provides defendants with significant “strategic and tactical advantages” by allowing them to avoid or delay responding to discovery while seeking greater details about plaintiffs' trade secrets. See Perlan Therapeutics, Inc. v. Super. Ct., 101 Cal. Rptr. 3d 211, 228 (Cal. App. 4th Dist. 2009).