Not necessarily in California. The answer depends upon the unsettled issue whether California summary adjudication rules allow courts to dismiss some but not all of the asserted trade secrets before trial.
Trade secret claims brought by a technology company typically allege theft of not one but many trade secrets. The law recognizes as separate and specific trade secrets not just a particular technology, but also the underlying research, study, tests or investigation relating to this technology. For example, in Perlan Therapeutics, Inc. v. Superior Court, 178 Cal. App. 4th 1333, 1345 n.10 (2009), the court found that “Perlan’s eight purported trade secrets are: ‘(1) the Charles Invention, (2) Perlan’s Protein Multimerization Process, (3) Perlan’s novel idea [involving sialidase to] create a drug to combat the flu, and (4) all related research, (5) development, (6) advancements, (7) improvements and (8) processes related thereto.’”
Each of the numerous alleged trade secrets must satisfy certain requirements before they are deemed protectable in the eyes of the law. A trade secret must be described with sufficient particularity and have independent economic value derived from having been kept secret. And even if a particular trade secret is deemed legally protectable, there is no actionable theft (misappropriation) unless the trade secret has been improperly acquired, used or disclosed.
It is very rare that all trade secrets asserted at the beginning of a case satisfy all the requirements. There often are many clunkers among the asserted secrets and this is sussed out through the development of the case leading up to the trial. Furthermore, the identity of the bad trade secrets is or at least should be quite clear to the parties and the court following expert discovery, and in some cases even earlier in discovery. Limiting trial to those trade secrets that have some basis in law or fact can save the parties hundreds of thousands of dollars in attorney and expert fees and costs otherwise incurred to prosecute or defend the bad trade secrets on top those that might have some merit. Precious and scarce court resources are saved for resolving legitimately asserted trade secrets (and are not diluted or wasted on resolving the bad ones).
In California, it may not be possible to obtain partial judgment on some but not all asserted trade secrets. Lawsuits brought in California court for misappropriation of trade secrets under California law (California Uniform Trade Secrets Act, Civ. Code, § 3426 et seq.) are governed by state procedural rules for summary judgement and summary adjudication. Code Civ. Proc., § 437c subd. (a) (summary judgment) and (f) (summary adjudication). Summary judgement terminates the entire action. Summary adjudication is directed to some but not all “causes of action,” such that following entry of summary adjudication the case proceeds to trial on the remaining causes of action. You therefore can’t get summary judgment on some but not all trade secret claims, but you might get summary adjudication if the challenged trade secret claim is deemed a “cause of action” within the meaning of the rule.
The precedent is limited. In Lilienthal & Fowler v. Superior Court, 12 Cal. App. 4th 1848, 1853 (1993), the court said that as used in section 437c subd. (f), “cause of action” should be interpreted consistent with common usage as referring to paragraphs in a complaint that reflect a separate theory of liability. Each asserted trade secret, if protectable and misappropriated, supports a finding that the defendant is liable for trade secret misappropriation. In other words, so long as at least one of the asserted trade secrets satisfies the protectability and misappropriation requirements, there is liability even if none of the other trade secrets satisfy the requirements. Each asserted trade secret supports a separate claim for recovery. Under Lilienthal, each asserted trade secret is therefore a “cause of action” that can be summarily adjudicated.
Furthermore, allowing summary adjudication of separately asserted trade secrets is consistent with the policy behind the summary adjudication procedure. As explained in Lilienthal, the legislative intent behind limiting summary adjudication to “causes of action” was to avoid wasting court time and litigation costs on resolving issues that did not significantly reduce the evidence to be reviewed or the issues to be decided at trial. Tens of thousands dollars and hundreds of hours of time can be saved for each trade secret removed from the case before trial. No longer would lay witnesses need to be presented to address this trade secret. No longer would expert technical witnesses need to opine on such issues as whether the trade secret is already known to skilled workers or whether it derives economic value from being kept secret. No longer would a damage expert need to address whether there are actual or equitable damages that flow from the misappropriation of the trade secret. No longer would the parties or the court need to introduce and grapple with the admissibility of exhibits directed to this trade secret. No longer would the court or jury need to make the approximate 20 factual findings necessary to determining liability and damages for this trade secret. Summary adjudication of some but not all trade secrets certainly saves court time and reduces litigation costs consistent with the policy promoted by the limitation of summary adjudication to “causes of action.”
However, Lilienthal can be distinguished as not dealing with trade secret misappropriation. The same is true of the other California appellate courts that have allowed summary adjudication.
And at least one California trial court has expressly refused to allow summary adjudication of separate trade secrets that were pled under one cause of action for trade secret misappropriation. In Hansen Medical, Inc. v. Luna Innovations, Inc., Superior Court of California, Santa Clara County, No. 107CV088551, the plaintiff Hansen alleged trade secret misappropriation as a single count in a multi-count complaint against defendant Luna arising out of a failed effort to jointly develop a catheter-based medical robotics system. Hansen listed 19 different technologies and information as individual trade secrets that had been misappropriated. Luna sought summary adjudication on one of these trade secrets. Hansen objected to the motion on the procedural ground that all 19 trade secrets must be treated as a single cause of action and that summary adjudication was therefore not available on only one of the trade secrets encompassed by the cause of action. The trial court agreed with Hansen and denied Luna’s motion as improperly seeking “partial adjudication” of a cause of action that, if granted, would not dispose of what the court described as the “entire cause of action.”
Whether Hansen was rightly or wrongly decided (linked are the relevant briefs [Hansen Opp to Luna Mot for Summ Adjudication and Luna Reply ISO Mot for Summ Adjudication] as well as the court’s order), other California courts may cite it in support of refusing to enter judgment on some but not all asserted trade secrets. Should this occur, the resulting waste of court time and increased litigation costs due to resolving ill-founded trade secrets at trial (as opposed to before trial) contradicts the very principles on which summary adjudication is based.