United States District Court, N.D. California
ORDER GRANTING MOTION TO STRIKE MISAPPROPRIATION OF TRADE SECRETS CLAIM AND ORDER RE SOURCE-CODE COMPARISON
WILLIAM ALSUP, District Judge.
In this action involving allegations of copyright infringement and misappropriation of trade secrets for recruiting software, defendants move to strike the misappropriation of trade secrets claim and object to plaintiff's identification of alleged trade secrets. For the reasons stated herein, the motion is GRANTED.
Plaintiff Jobscience, Inc. develops and licenses recruiting software. Defendants are individuals and entities alleged to have copied Jobscience's software application, which was licensed to defendant CVPartners, Inc. Jobscience has obtained copyrights for versions of the code.
In September 2013, Jobscience commenced this action. In November 2013, Jobscience filed a first amended complaint alleging thirteen claims for relief. A January 2014 order granted in part and denied in part defendants' motion to dismiss. Notably, the misappropriation of trade secrets claim was dismissed because it was preempted by the Copyright Act and the complaint relied on nothing more than a vague reference to "software code, methods and other trade secrets" (Dkt. No. 29).
A February 2014 order then (among other things) granted plaintiff's motion to amend the first amended complaint to add a trade-secrets claim. The claim, however, could not cover software code because of the preemption problem. Because defendants raised serious challenges to the existence of trade secrets, Jobscience was ordered to file a detailed description of the alleged misappropriated trade secrets. At oral argument, counsel was warned to "be specific. If it's not specific, then [Defendants] can bring motions" (Feb. 27, 2014 Hr'g. Tr. 21-22). A companion order instructed defendants to turn over every version of the allegedly copied source code for a source-code comparison. Plaintiff chose and paid for an expert to analyze the code.
Plaintiff then filed a second amended complaint alleging copyright infringement, breach of contract, misappropriation of trade secrets, unfair competition, and constructive fraud (Dkt. No. 45).
Three weeks later, plaintiff filed a statement of trade secrets, organized as a three-page narrative with three schematics. Contrary to the instructions in the February 2014 order, plaintiff did not include a numbered list of the precise trade secrets with the specific elements for each trade secret. Instead, Jobscience alleged that it had "[REDACTED/], " derived "[REDACTED/]." The process was "not known to the general public" and Jobscience maintains its secrecy by requiring confidentiality agreements to access its products. Jobscience stated that the process has independent economic value as demonstrated through customers "paying to use it, " but the secrets "are not evident in a reading of [the] code." Jobscience does not claim that the existence of relational databases or their use of supporting business processes are trade secrets (Dkt. No. 48-4).
The instant defense motion seeks to strike plaintiff's misappropriation of trade secrets claim and objects to plaintiff's statement of confidential trade secrets.
On April 7, Jobscience filed a letter, appending the expert report of Kenneth Amron. Jobscience asked Mr. Amron to "determine whether [defendants'] Talent Rover code base exhibits evidence of code copying." Of the files Mr. Amron analyzed, he found "strong evidence of copying" (Dkt. No. 54).
On April 18, defendants filed a letter identifying deficiencies with Mr. Amron's report and qualifications. Defendants argued that Mr. Amron failed to perform a proper comparison of source code and argued that the "Court should either strike the copyright claim as a sanction for violating the February 28 Order or require Plaintiff to complete an actual source code comparison using CodeSuite" (Dkt. No. 62).
The fact discovery deadline is October 31, 2014. This order follows full briefing and oral argument.
1. MOTION TO STRIKE.
Even though defendants styled this motion as a "motion to strike, " they essentially move to dismiss the misappropriation of trade secrets claim based on inadequate disclosure in Jobscience's statement of trade secrets. Section ...