Recognizing California's Notable Dtsa Cases in Honor of Dtsa's 5th Birthday

• Jurisdiction: United States,Federal,California
• Citation: Vol. 46 No. 2
• Publication year: 2021
• topic: Civil Procedure

Recognizing California's Notable DTSA Cases in Honor of DTSA's 5th Birthday

Catherine Lui

Orrick, Herrington, & Sutcliffe LLP

Krystal Anderson

Orrick, Herrington, & Sutcliffe LLP

Five years ago, on May 11, 2016, President Barack Obama signed the Defend Trade Secrets Act of 2016, 18 U.S.C. Section 1836 ("DTSA") to provide a federal civil right of action for the theft of a trade secret and to provide further uniformity across states when addressing trade secrets claims. Since then, the number of trade secret litigation cases filed across the country skyrocketed, developing a new body of law in federal courts in response to the new statute. Between 2009 and 2016, trade secret suit filings generally remained within a range of 860 to 930 cases per year in state and federal court. See Lex Machina Trade Secrets Litigation Report 2018. In 2017, U.S. trade secret case filings increased to 1,134 cases filed in state and federal courts as plaintiffs took advantage of the new forum. Id. In 2019, 72% of all trade secret cases in federal district court had DTSA claims. See Lex Machina Trade Secrets Litigation Report 2020. In honor of DTSA's fifth birthday, this article explores the notable DTSA cases filed or decided in California in the five years since its enactment.

THE FIRST

California is home to the first-ever judicial decision under DTSA, as decided on June 10, 2016 in Henry Schein, Inc. v. Cook, 191 F. Supp. 3d 1072 (N.D. Cal. 2016). There, Henry Schein, Inc. ("HSI"), a medical, dental, and veterinary supply and equipment distributor, brought claims against former employee Cook for "looting" trade secret documents (such as customer practice reports and customer-related reports, and order and purchase data for a number of customers) with the apparent goal of diverting HSI customers. Judge Tigar granted HSI's request for an ex parte restraining order under the DTSA prohibiting Cook from disseminating the trade secrets or soliciting customers of the plaintiff because there was a reasonable likelihood that HSI's customer relationship losses might occur before Cook could present opposition to the TRO application. Id. at 1077. The judge also denied HSI's request for an order directing a forensics expert to obtain mirror images of Cook's data and personal devices because such an order would too greatly intrude into her privacy, especially before she could be heard in court. Id. at 1078-79. While such a TRO could have been obtained under the California Uniform Trade Secrets Act ("CUTSA"), Cal. Civ. Code § 3426.1, et seq., this case marked the first in a line of important DTSA cases to be heard in California moving forward.

THE HIGHEST PROFILE

The highest profile DTSA case litigated in California—and likely in the nation—is Waymo LLC v. Uber Techs., Inc., before Judge Alsup in the Northern District of California. No. C 17-00939 WHA (N.D. Cal. 2018). Many know of this case as the first great legal fight over autonomous vehicles.

Waymo, Google's former autonomous vehicle project, alleged that prior employee and engineer Anthony Levandowski took thousands of trade secret documents with him such as blueprints for the lidar laser sensor he helped develop after he resigned to start his own company. See Waymo, 2017 WL 2123560, at *2-4 (N.D. Cal. May 15, 2017)...