May 20, 2014

Pleading Plausible Trade-Secret Claims under Twombly and Iqbal

Ronald T. Coleman Jr.

Pleading a claim for misappropriation of trade secrets is always a challenge. A plaintiff cannot include too much detail for risk of disclosing the trade secret itself, or at least giving competitors more information about the plaintiff's business than it otherwise would like to disclose. But a plaintiff must describe the nature of the trade secret and the circumstances of the misappropriation in enough detail to give the opposing party and the court notice of what is at issue in the dispute.

Recently, the U.S. Supreme Court's decisions in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), imposed enhanced pleading standards for federal cases. These decisions direct trial judges to scrutinize pleadings to determine whether the allegations show not just a possibility of liability but the "plausibility of entitlement to relief."  Iqbal, 556 U.S. at 678.  Although the notice pleading requirements of Federal Rules of Civil Procedure 8 remain, plaintiffs must allege enough specific facts supporting their claims for relief in order to meet the "plausibility" standard of Twombly and Iqbal.

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