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Top California trade secret verdicts

Posted by Steve Vondran | Feb 05, 2023

Attorney Steve® Intellectual Property - Trade Secrets cases & verdicts.  If you are facing a trade secret lawsuit, mediation, or arbitration, call us at (877) 276-5084.

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California is known for its robust trade secret laws, and its courts have seen a number of high-profile verdicts related to trade secrets. Here is a summary of some of the top California trade secret verdicts and a general overview of what is required to prove Trade Secret misappropriation under California law.  Trade secrets cases often involve former employees leaving one company to start a new company.  These individuals may have learned valuable trade secrets and may be using them to compete with their former companies.  The former company may sue for breach of a non-compete agreement or for trade secret theft under Federal law or under California's Uniform Trade Secrets Act ("CUTSA"). 

What is CUTSA? Trade Secret General Overview Under California Law

If you or your business has been the victim of trade secret misappropriation, you may have cause to pursue a civil lawsuit in California under the California Uniform Trade Secrets Act (CUTSA). In general, a plaintiff must prove the following five elements to prevail in a misappropriation claim under CUTSA:

1. The existence of a trade secret: To prevail in a CUTSA claim, a plaintiff must first establish that a trade secret exists. A trade secret is defined under CUTSA as information that derives independent economic value from not being generally known or readily ascertainable by another, and is subject to reasonable efforts to maintain its secrecy. Examples of trade secrets may include confidential formulas, patterns, programs, devices, methods, techniques, processes, or compilations of information.

2. Misappropriation: A plaintiff must also show that the trade secret was misappropriated. This means that the defendant acquired the trade secret through improper means such as theft, bribery, espionage, or other wrongful conduct.

3. Use of the trade secret: The plaintiff must further demonstrate that the defendant used the trade secret or disclosed it to a third party without authorization.

4. Causation: A plaintiff must prove that the defendant's misappropriation of the trade secret was the proximate cause of the plaintiff's damages.

5. Damages: Lastly, the plaintiff must show that it suffered some form of harm as a result of the defendant's misappropriation, such as lost profits or other economic losses.

If you believe your trade secrets have been misappropriated, an experienced attorney can evaluate your case and help you determine the best course of action. The legal team at [Law Firm Name] is here to help you protect your valuable intellectual property. Contact us today for a confidential consultation.

The protection of trade secrets is of paramount importance under California law. California Civil Code § 3426.1 defines a trade secret as information, including a formula, pattern, compilation, program, device, method, technique, or process, that:

(1) derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use;


(2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

First, in order to prove the existence of a trade secret, it must be shown that the information at issue is not generally known to the public or to other persons who can obtain economic value from its disclosure or use, and that the owner has taken reasonable steps to keep the information secret. California Civil Code § 3426.1.

Second, access to the trade secret must be demonstrated. Access, in this context, means that the defendant had an opportunity to acquire knowledge of the trade secret, not necessarily that the defendant actually did acquire knowledge of the trade secret. ComputerX Corporation v. AT&T Corp., 97 Cal. App. 4th 521, 537 (2002).

Finally, misappropriation of the trade secret must be established. Misappropriation means the acquisition, use, or  disclosure of a trade secret without the owner's consent. California Civil Code § 3426.1(b).

In sum, in order to prove trade secret theft under California law, the plaintiff must prove that:

 (1) the information at issue is a trade secret, 

(2) the defendant had access to the trade secret, 


(3) the defendant misappropriated the trade secret. 

Citations: California Civil Code § 3426.1 ComputerX Corporation v. AT&T Corp., 97 Cal. App. 4th 521, 537 (2002).

CUTSA allows for Attorney Fees for Prevailing Defendants in Bad Faith Cases

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California Jury Instruction

California jury instructions

Can an employer be liable under the Federal Trade Secrets Act for hiring an employee who is aware of a trade secret?

In today's highly competitive business environment, companies are increasingly concerned with protecting their    trade secrets from being stolen by competitors. This often means that companies are wary of hiring employees who have worked for a competitor. 

The issue of whether a company can be held liable for trade secret theft merely by hiring an employee of a competitor is an open question. Generally, companies are not liable for trade secret theft merely by hiring an employee of a competitor. In order to be liable for trade secret theft, there must be evidence that the company induced the employee through improper means to misappropriate the trade secret and that the former employer would have obtained the business.

This means that the new employer must have taken some affirmative action to encourage or assist the employee in misappropriating the trade secret. For example, in the case of E.I. DuPont de Nemours & Co. v. Christopher, the court held that DuPont was not liable for trade secret theft merely by hiring an employee of a competitor. In this case, DuPont had hired an employee of a competitor who had access to the competitor's trade secrets. The court held that DuPont was not liable for trade secret theft merely by hiring the employee.

The court noted that DuPont did not actively encourage the employee to misappropriate the trade secret and that the employee did not actually misappropriate the trade secret. On the other hand, in the case of Intermedics, Inc. v. Ventritex, Inc., the court held that Intermedics was liable for trade secret theft merely by hiring an employee of a competitor. In this case, Intermedics had hired an employee of a competitor who had access to the competitor's trade secrets.

The court held that Intermedics was liable for trade secret theft because it had actively encouraged the employee to misappropriate the trade secret. The court noted that Intermedics had provided the employee with financial incentives to misappropriate the trade secret and had failed to take steps to protect the trade secret.

In conclusion, companies are generally not liable for trade secret theft merely by hiring an employee of a competitor. In order to be liable for trade secret theft, there must be evidence that the company induced the employee to misappropriate the trade secret.

This means that the company must have taken some affirmative action to encourage or assist the employee in misappropriating the trade secret.

Are there defenses to allegations of trade secret theft?

Yes, here are a few common defenses.

Misappropriation is a serious matter that can have significant legal and financial consequences for businesses. In  California, trade secret misappropriation is governed by the California Uniform Trade Secrets Act (CUTSA), which is codified in California Civil Code §§ 3426-3426.11.

Under CUTSA, trade secret misappropriation is defined as the acquisition, disclosure, or use of a trade secret  without the trade secret owner's consent. There are a number of defenses available to individuals and businesses accused of trade secret misappropriation under California law.

The most common of these defenses are:

(1) independent development;

(2) reverse engineering;

(3) public disclosure;

(4) merger or acquisition;


(5) the defense of unclean hands.

The independent development defense is available to a defendant accused of trade secret misappropriation when the defendant can prove that the information used was independently developedwithout reference to the tradesecret. The defendant must demonstrate that its use of the trade secret was derived through its own development efforts and that it had no access to the trade secret. Under California law, the independent development defense is  codified in California Civil Code § 3426.1(d)(1).

The reverse engineering defense is available when the defendant can prove that the trade secret was obtained  through reverse engineering. This means that the defendant examined a product or process made available to the  public and reproduced the trade secret without any use of the trade secret itself. Reverse engineering is codified in California Civil Code § 3426.1(d)(2).

The public disclosure defense is available when the trade secret is publicly available or is in the public domain. This means that the trade secret had been disclosed or published prior to the defendant's use of it. This defense is  codified in California Civil Code § 3426.1(d)(3).

The merger or acquisition defense is available when the defendant acquires the trade secret through a merger or acquisition. This defense is codified in California Civil Code § 3426.1 (d)(4).

Finally, the unclean hands defense is available when the plaintiff has engaged in inequitable conduct that is related  to the misappropriation claim. This defense is codified in California Civil Code § 3426.1(d)

(5). It is important to note that these defenses are not absolute. Rather, they are subject to the laws and rules  pertinent to trade secret misappropriation in California. 

It is also important to note that the burden of proof is on the defendant to prove that any of the defenses listed above applies.

In sum, trade secret misappropriation is a serious matter in California, and those accused of it should be aware of  the available defenses. There are a number of available defenses to allegations of trade secret misappropriation  under California law, including independent development, reverse engineering, public disclosure, merger or acquisition, and the defense of unclean hands. 

Legal Citations:

California Civil Code § 3426-3426.11.

California Civil Code § 3426.1(d)(1).

California Civil Code § 3426.1(d)(2).

California Civil Code § 3426.1(d)(3).

California Civil Code § 3426.1(d)(4).

California Civil Code § 3426.1(d)(5).

Overview of some of the largest California trade secret verdicts

Here are a few examples of how very large verdicts followed.

(1). In 2013, Apple was awarded $119.6 million in a trade secret case against Samsung. Apple accused Samsung of infringing on its patents and stealing its trade secrets related to touchscreen technology. The jury found that Samsung had indeed misappropriated Apple's trade secrets and awarded Apple the full amount it had requested

(2). In 2014, a jury awarded $30 million to Apple in a trade secret case against another tech company, Samsung. Apple accused Samsung of stealing its trade secrets related to its Siri voice assistant. The jury found that Samsung had indeed misappropriated Apple's trade secrets and awarded Apple the full amount it had requested.  Apple Inc. v. Samsung Electronics Co., No. 11-cv-01846-LHK (N.D. Cal. 2013).

(3). In 2012, a jury awarded $444 million to Oracle in a trade secret case against Google. Oracle accused Google of stealing its trade secrets related to its Java programming language. The jury found that Google had indeed misappropriated Oracle's trade secrets and awarded Oracle the full amount it had requested.  Oracle America, Inc. v. Google Inc., No. 10-cv-03561-LHK (N.D. Cal. 2012).

(4). In 2018, a jury in Northern California awarded $260 million to Silicon Valley start-up Waymo in a trade secret case against Uber. Waymo sued Uber for theft of trade secrets related to its self-driving car technology. After a lengthy trial, the jury found that Uber had indeed misappropriated Waymo's trade secrets and awarded Waymo the full amount it had requested.  Waymo LLC v. Uber Technologies, Inc., No. 3:17-cv-00939-WHA (N.D. Cal. 2018).

These cases demonstrate the importance of trade secret protection in California and the high value that courts place on trade secrets. Companies should take steps to protect their confidential information and trade secrets to ensure they are not misappropriated by competitors.

Contact a California Trade Secret Arbitration, Mediation and Litigation Law Firm

Our firm has litigated hundreds of IP-related lawsuits since our founding in 2004.  Call us for more details at (877) 276-5084 or leave a message through our contact form.

About the Author

Steve Vondran

Thank you for viewing our blogs, videos and podcasts. As noted, all information on this website is Attorney Advertising. Decisions to hire an attorney should never be based on advertising alone. Any past results discussed herein do not guarantee or predict any future results. All blogs are written by Steve Vondran, Esq. unless otherwise indicated. Our firm handles a wide variety of intellectual property and entertainment law cases from music and video law, Youtube disputes, DMCA litigation, copyright infringement cases involving software licensing disputes (ex. BSA, SIIA, Siemens, Autodesk, Vero, CNC, VB Conversion and others), torrent internet file-sharing (Strike 3 and Malibu Media), California right of publicity, TV Signal Piracy, and many other types of IP, piracy, technology, and social media disputes. Call us at (877) 276-5084. AZ Bar Lic. #025911 CA. Bar Lic. #232337

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