Integral Dev. Corp. v. Tolat

Summarized by:

  • Court: Intellectual Property Archives
  • Area(s) of Law: Trade Secrets, Misappropriation
  • Date Filed: 02-24-2014
  • Case #: No: C 12-06575 JSW
  • Judge(s)/Court Below: United States District Court for the Northern District of California
  • LexisNexis Citation: 2014 U.S. Dist. LEXIS 23429
  • Westlaw Citation: 2014 WL 721844
  • Full Text Opinion

Under the CUTSA, a plaintiff seeking relief for misappropriation of a trade secret must show the existence of the trade secrets with sufficient and reasonable particularity.

Opinion (White): The software development company, Integral, manages services in the area of online trading and other business services on the foreign exchange market. Until he departed the company in late 2012, Dr. Viral Tolat was the Chief Technology Officer and Head of Integral Products and Services. Tolat was also a co-founder of Integral in 1993. In December of 2012, Tolat left Integral and joined a competing business, EBS Dealing Resources, Inc. Integral brought suit against Tolat under the California Uniform Trade Secrets Act ("CUTSA") for misappropriation of trade secrets. Under the CUTSA, a plaintiff seeking relief for misappropriation of a trade secret must show the existence of the trade secrets with sufficient and reasonable particularity. The court first found that Integral had failed its burden of describing the allegedly-misappropriated trade secret material. Integral merely presented hundreds of documents and lines of source code and claimed Tolat had duplicated some portion of these. The court also found that Integral did not present sufficient evidence to prove that Tolat used any potential trade secrets to his new employer. The mere fact that Tolat downloaded a copy of source code material during his time at Integral while looking for other employment does not meet the burden of proving misappropriation. Lastly, the court found that Integral could not supply any evidence of financial damages they claimed to have suffered, which is a requirement under the CUTSA to recover on a claim for misappropriation of trade secrets. Based on these findings, the court GRANTED Dr. Viral Tolat’s motion for summary judgment with regards to Integral’s claim of misappropriation of trade secrets.

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