Carolyn Hoecker Luedtke Discusses the Ninth Circuit’s Trade Secret Ruling, Highlights Implications for Plaintiffs

Munger, Tolles & Olson Partner Carolyn Hoecker Luedtke was quoted in three recent articles exploring the Ninth Circuit’s overturning of a district court’s decision to strike nine of eleven trade secrets from a lawsuit between Quintara Biosciences, Inc. and Ruifeng Biztech, Inc.

The articles included: “Ninth Circuit Says District Court Abused Its Discretion in Striking Biotech Company’s Trade Secrets at Discovery Stage,” published in IP Watchdog; “Ninth Circuit revives DNA firm’s trade secret claims, faults district court’s early dismissal in DTSA case,” published in IP Law Daily; and “Ninth Circuit revives trade secrets claims in DNA-sequencing spat,” published in Life Sciences IP Review.

The district court had stricken these nine trade secrets at the discovery stage, ruling Quintara failed to identify them with enough detail. However, the Ninth Circuit held that the claim was under the federal Defend Trade Secrets Act (DTSA), which unlike the state equivalent (CUTSA) does not dictate that the trade secret must be described in detailbefore discovery commences,, and “whether a plaintiff has sufficiently particularized a trade secret under DTSA is usually a matter for summary judgment or trial. While a district court has broad discretion to manage pleadings and discovery, and to impose sanctions on a noncompliant party, the district court exceeded that authority here.”

Carolyn noted that the decision raises important questions for plaintiffs to consider moving forward. “The Quintara decision will raise questions for future trade secret plaintiffs as to whether if they are filing in California, they want to bring a CUTSA claim at all given it comes with the strict requirements of Section 2019.210.”

She added, “There is an ongoing question whether the procedural requirements of Section 2019.210 apply in federal court, and the Ninth Circuit explicitly declined to weigh in on that question in the Quintara decision. Further, the holding may be viewed as limited to the authority of the court to strike pleadings as a discovery sanction, as much of the holding is focused on that stringent test, and [should] not be read to undermine efforts to require disclosure in discovery or as a matter of case management.”

Read the full articles in IP Watchdog, IP Law Daily and Life Sciences IP Review.