Trade secret disputes often begin with a familiar allegation: a former employee, business partner, or competitor obtained confidential information and used it for a competing business.
But under California law, proving that someone took “confidential information” is not enough. A plaintiff must establish that the information actually qualifies as a trade secret and that it was misappropriated.
The Trade Secret Must Be Identified
A trade secret may include a formula, compilation, program, method, technique, process, or other information that derives economic value from not being generally known and is subject to reasonable efforts to maintain its secrecy. Cal. Civ. Code § 3426.1(d).
At the pleading stage, California courts do not require a plaintiff to publicly disclose the secret itself. But the plaintiff must describe the subject matter sufficiently to distinguish the claimed secret from general knowledge and give the defendant reasonable notice of what is actually being claimed. Diodes, Inc. v. Franzen (1968) 260 Cal.App.2d 244, 253.
A vague allegation that a defendant took “confidential information,” “proprietary methods,” or “business know-how” may therefore be insufficient if the plaintiff cannot identify what allegedly constitutes the trade secret.
Discovery Creates an Additional Hurdle
Even if the claim survives the pleading stage, California imposes a special requirement before trade-secret discovery proceeds.
Code of Civil Procedure § 2019.210 requires a plaintiff alleging trade-secret misappropriation to identify the claimed trade secret with reasonable particularity before commencing discovery relating to it.
The plaintiff does not have to disclose every minute detail. Advanced Modular Sputtering, Inc. v. Superior Court (2005) 132 Cal.App.4th 826. But the designation must be sufficiently clear to define the boundaries of the claimed secret and permit meaningful discovery.
In Perlan Therapeutics, Inc. v. Superior Court (2009) 178 Cal.App.4th 1333, the Court of Appeal upheld a ruling preventing trade-secret discovery where the plaintiff’s designation lacked sufficient clarity and failed adequately to distinguish the claimed secrets from publicly available knowledge.
This creates one of the central difficulties in trade-secret litigation: a plaintiff must identify the secret with enough precision to litigate the case while continuing to protect the very information it claims is secret.
Confidential Information Is Not Automatically a Trade Secret
Information does not become a trade secret merely because a company labels it “confidential.”
The information must have economic value from its secrecy, and the owner must have taken reasonable measures to protect it. Those measures may include confidentiality agreements, restricted access, password protections, internal policies, and controls over disclosure.
California courts have also recognized that information readily available from public or industry sources may not qualify for trade-secret protection. See DVD Copy Control Assn., Inc. v. Bunner (2003) 31 Cal.4th 864; Morlife, Inc. v. Perry (1997) 56 Cal.App.4th 1514.
A company that broadly distributes information without meaningful restrictions may therefore have difficulty later establishing that the information was legally protected as a trade secret.
The Plaintiff Must Also Prove Misappropriation
Establishing a trade secret is only part of the case.
Under CUTSA, misappropriation generally requires improper acquisition of the trade secret, or unauthorized use or disclosure under circumstances specified by Civil Code § 3426.1(b).
Accordingly, the fact that a former employee possessed company information, later joined a competitor, or helped develop a similar product does not by itself necessarily establish liability. The evidence must connect the defendant’s conduct to the legally protected information and to an acquisition, disclosure, or use that constitutes misappropriation.
In Applied Medical Distribution Corp. v. Jarrells (2024) 100 Cal.App.5th 556, the Court of Appeal explained that a CUTSA misappropriation claim consists of two fundamental elements: the existence of a trade secret and improper acquisition, use, or disclosure of that trade secret.
Notably, a plaintiff does not necessarily have to prove monetary damages to establish misappropriation. CUTSA may permit injunctive relief or, in appropriate circumstances, a reasonable royalty even where actual damages or unjust enrichment cannot be proven.
Surviving the Pleading Stage Is Only the Beginning
A recent federal decision applying California trade-secret law illustrates the distinction.
In Flextronics AP, LLC v. Ricci (N.D. Cal. Aug. 3, 2026), the court refused to dismiss a CUTSA claim and rejected the argument that California’s § 2019.210 “reasonable particularity” requirement should operate as a heightened federal pleading standard.
The decision illustrates an important point: surviving a demurrer or motion to dismiss does not establish that a trade secret actually exists or that misappropriation can ultimately be proven.
Those questions often become more difficult during discovery, summary judgment, and trial, when the plaintiff must establish what the secret was, why it was actually secret, how it was protected, and how the defendant improperly acquired, disclosed, or used it.
For businesses considering trade-secret litigation, identifying the claimed secret and preserving evidence of confidentiality, access, acquisition, and use should therefore begin well before the lawsuit is filed.
Legal Authorities
- California Civil Code §§ 3426.1(b), 3426.1(d)
- California Code of Civil Procedure § 2019.210
- Diodes, Inc. v. Franzen (1968) 260 Cal.App.2d 244
- Advanced Modular Sputtering, Inc. v. Superior Court (2005) 132 Cal.App.4th 826
- Perlan Therapeutics, Inc. v. Superior Court (2009) 178 Cal.App.4th 1333
- DVD Copy Control Assn., Inc. v. Bunner (2003) 31 Cal.4th 864
- Morlife, Inc. v. Perry (1997) 56 Cal.App.4th 1514
- Applied Medical Distribution Corp. v. Jarrells (2024) 100 Cal.App.5th 556
- Flextronics AP, LLC v. Ricci (N.D. Cal. Aug. 3, 2026)
Related practice areas: Trade Secrets and Unfair Competition · Civil Litigation