Tactical Timing: Disclosing Trade Secrets in Litigation

In nearly every trade secret misappropriation cases, two fundamental issues must be resolved: (1) Are the alleged trade secrets actually trade secrets under the definition provided in the applicable statute, and (2) has the defendant misappropriated them? See, e.g., Defend Trade Secrets Act (“DTSA”), 18 U.S.C. §§ 1836,1839. Neither issue can be definitively resolved until plaintiff identifies the trade secrets at issue. Thus, in managing case flow and judicial efficiency, a question courts have long grappled with—and continue to grapple with—is when must a plaintiff disclose its alleged trade secrets? Courts across the country have shown mixed approaches. Some have explicit and rigid timing requirements, and some are ambiguous, even allowing a plaintiff to disclose its trade secrets as late as during trial in certain cases.

The issue of trade secret disclosure comes up during two key early stages of litigation: pleadings and discovery. Relevant exemplary decisions and disclosure rules by jurisdiction are highlighted below.

Pleadings Stage

Most courts require a plaintiff to disclose alleged trade secrets in the pleadings stage only insofar as to meet general pleading standards. See, e.g., True Velocity Ammunitions, LLC & Lone Star Future Weapons, Inc. v. Sig Sauer, Inc., No. 2:24-CV-522, 2024 WL 4583118, at *10 (D. Vt. Oct. 25, 2024); Lupin Atlantis Holdings SA v. Xian-Ming Zeng, No. 23-61621-CIV, 2024 WL 4491993, at *3 (S.D. Fla. Oct. 15, 2024); Carlisle Interconnect Techs. Inc. v. Foresight Finishing LLC, No. CV-22-00717-PHX-SPL, 2023 WL 2528324 (D. Ariz. Mar. 15, 2023); Medtech Prods., Inc. v. Ranir, LLC, 596 F. Supp. 2d 778, 789 (S.D.N.Y. 2008). It would be uncommon for a court to mandate specific disclosure of trade secrets in a public complaint—indeed, no cases were readily found requiring such disclosure at the pleadings stage. Courts, on the contrary, frequently permit plaintiffs to identify alleged trade secrets broadly and categorically in pleadings. See, e.g., Beluca Ventures LLC v. Einride Aktiebolag, No. 21-CV-06992-WHO, 2023 WL 2456716, (N.D. Cal. Mar. 10, 2023); cf. Iqvia, Inc. v. Erica Breskin, No. CV 22-2610, 2023 WL 2588450 (E.D. Pa. Mar. 20, 2023). Plaintiffs must articulate their alleged trade secrets with greater particularity at a later point in litigation, almost always after the court has entered a protective order to maintain the secrecy of such disclosure.

Before and During Discovery

Parties and courts begin to scrutinize the issue of trade secret disclosure more closely as the case shifts into the discovery phase. Two states require plaintiffs to identify their alleged trade secrets with “reasonable particularity” even before commencing discovery: California and Massachusetts. Cal. Code Civ. Proc. § 2019.210 (“[B]efore commencing discovery relating to the trade secret, the party alleging the misappropriation shall identify the trade secret with reasonable particularity . . . .”); Mass. Gen. Laws Ann. 93 § 42D (“Before commencing discovery relating to an alleged trade secret, the party alleging misappropriation shall identify the trade secret with sufficient particularity under the circumstances of the case to allow the court to determine the appropriate parameters of discovery and to enable reasonably other parties to prepare their defense.”). While the balance of states do not have analogous statutory requirements, many courts have developed precedent favoring trade secret disclosure either before discovery or in the early stages of discovery. See, e.g., Carlisle Interconnect Techs. Inc. v. Foresight Finishing LLC, No. CV-22-00717-PHX-SPL, 2023 WL 2528324 (D. Ariz. Mar. 15, 2023) (Court ordering plaintiff to properly identify its trade secrets after the pleading stage, early in the discovery process); Argos U.S. LLC v. Young, No. 1:18-CV-02797-ELR, 2021 WL 3081332, at *7–9 (N.D. Ga. Feb. 2, 2021) (granting, in part, defendant’s motion to require pre-discovery identification of two trade secrets); JJ Planck Comp., LLC v. Bowman, No. 3:18-CV-00798, 2018 WL 3545319, at *3 (W.D. La. July 23, 2018) (noting that “pre-discovery identification seems to be the predominate trend”); Vention Med. Advanced Components, Inc. v. Pappas, 188 A.3d 261, 273 n.1 (N.H. 2018); DynCorp Int’l v. AAR Airlift Grp., Inc., 664 F. App’x 844, 848 (11th Cir. 2016) (noting that Florida courts require plaintiffs to identify trade secrets with reasonable particularity prior to discovery). Fewer jurisdictions have taken more reserved approaches, leaving it to the parties to resolve disclosure through the ordinary course of discovery: for example, defendant requesting identification via interrogatories. See, e.g., Huawei Techs. Co. v. Huang, No. 4:17-CV-00893, 2018 WL 3862061, at *4 (E.D. Tex. Aug. 14, 2018) (denying defendant’s motion for the plaintiff to more specifically identify its alleged trade secret during early discovery). And still yet, some jurisdictions (albeit a minority) seemingly favor more complete and robust discovery before requiring disclosure. See, e.g., M.H. Eby, Inc. v. Timpte Industries, Inc., No. 19-386, 2019 WL 6910153 at *1, *8 (E.D. Pa. Dec. 19, 2019); PDC Machs. Inc. v. Nel Hydrogen A/S, No. 17-5399, 2018 WL 3008531 (E.D. Pa. June 15, 2018).

Takeaways

Litigation strategies may differ depending on factual circumstances, but absent express rules from the court, plaintiffs generally favor delayed disclosure, whereas defendants mostly desire early disclosure. The clash of strategic thinking typically revolves around the following considerations: For a plaintiff, delaying disclosure as long as possible provides more time for discovery, with which the plaintiff could (1) cast a wider net around potential misappropriation, and (2) craft descriptions of its trade secrets to map more precisely onto the alleged misappropriation. For a defendant, an “as-soon-as-possible” disclosure approach cuts off exploratory discovery and shifts onus to plaintiff to describe its alleged trade secrets based (mostly, if not entirely) on its own information, which may make plaintiff’s description less likely to satisfy the statutory definition for a trade secret. Ultimately, whether plaintiff is required to disclose, or whether defendant might be successful in seeking to compel disclosure, is largely a jurisdiction-specific inquiry.