Plaintiff Must Identify Software Trade Secrets

Here is a reminder that plaintiffs have an obligation to identify allegedly stolen trade secrets.  In MSCI, Inc. v. Jacob, 945 N.Y.S.2d 863 (April 20, 2012), a New York state court held that the plaintiffs were required to affirmatively identify features of their software that included trade secrets, rather than simply identify aspects of the software that did not include trade secrets.

The court had previously ordered the "plaintiffs to supplement their responses to defendants' interrogatories by providing a list of source code components: (i) that are covered by third party licenses; (ii) that are in the public domain; or (iii) over which plaintiffs do not claim trade secret  status."  The plaintiffs argued that it was sufficient for them to comply with this discovery order, and also “that their identification of the entirety of the source code in their interrogatory responses as a trade secret, is adequate because the source code underlying their products constitutes a compilation and sequencing of component parts.”

The court rejected the plaintiffs' arguments.  Its prior order had been preliminary.  Further, it was necessary for the plaintiffs to distinguish between their trade secrets and knowledge generally in the public domain in order for the court to evaluate the plaintiffs' claim.  Moreover, the court addressed the classic conundrum of trade secrets cases: “should defendants remain in the dark as to the explicit portions of the source codes that plaintiffs deem to be trade secrets misappropriated by defendants, plaintiffs, once privy to Axioma's source codes, could tailor their theory of misappropriation to Axioma's work.”  Accordingly, the court ordered the plaintiff to identify the trade secrets in their source code.