Key Takeaway

• The wide latitude plaintiffs previously enjoyed to simply claim trade secret status over large amounts of information or data may be under attack. Plaintiffs, specify your trade secrets or face dismissal. Defendants, hold a plaintiff’s feet to the fire, and require plaintiff, through depositions, motions, and discovery, to identify its purported trade secrets, and then seek dismissal when it doesn’t.

In 2019, Mike Hooper left his salesman job at Double Eagle Alloys, Inc. a Tulsa, OK alloy distributor, and went a few miles right down the road to work at Ace Alloys, a competitor in Catoosa. He arrived (a few minutes early with nicely pressed khakis, of course), with a lunchbox containing a peanut butter and jelly sandwich he made earlier that morning, a small briefcase with the local newspaper and a few pens, and about three thousand confidential files that he had downloaded, along with notes that he took from Double Eagle Alloys, his previous employer.

In the lawsuit Double Eagle immediately filed against Hooper and Ace Alloys, Double Eagle claimed that information that included Double Eagle’s PSQ (pump shaft quality) specifications, pricing, margins, costs, and customer drawings, constituted Double Eagle’s confidential trade secret information. But, after nearly five years of litigation, Ace Alloys moved to dismiss the case, claiming that – in all that time – Double Eagle did not identify what its trade secrets were. Surely, in a half decade of litigating, Double Eagle had, at the very least, identified the trade secrets, right?

Wrong. In Double Eagle Alloys, Inc. v. Michael Hooper; Ace Alloys, LLC, 19-cv-243-JDR-CDL (N.D. Okla. June 25, 2024), the Northern District of Oklahoma flat out dismissed Double Eagle’s lawsuit, holding that Double Eagle failed to identify its trade secrets because the “Court cannot determine from the current record what Double Eagle’s alleged trade secrets actually are.”

The Court cited decisions from circuits all over the country (including the 1^st, 2^nd, and 7^th Circuits) that shifting, incomplete, and overbroad descriptions of trade secrets in a trade secret case will result in a dismissal. The Double Eagle court stated that plaintiffs cannot give just a bird’s-eye view of their trade secrets or name broad categories of information, but instead must “at a minimum, describe the boundaries of the trade secrets in a manner that would permit the Court to understand whether the trade-secret protection is being claimed with respect to individual files or a combination thereof, evaluate whether the information (in whole or in combination) is publicly available, and rule on motions in limine and evidentiary challenges.”

The Court concluded that “[i]t is possible that the downloaded files may contain information that could qualify as a trade secret, but Double Eagle has done nothing to distinguish the wheat from the chaff. Accordingly, the Court holds that Double Eagle has failed to set forth evidence from which a jury could find that it holds a trade secret…”

To be clear, the Court did not exactly rule that the information at issue was not a trade secret, although its decision had the same effect. The Court only determined that Double Eagle had not identified its claimed trade secrets with enough specificity to raise a triable issue as to whether it had any and thereby survive a motion for summary judgment: “Double Eagle failed to identify its alleged trade secrets with sufficient particularity and clarity to proceed to trial… Because the Court cannot determine from the current record what Double Eagle's alleged trade secrets actually are, Double Eagle's claims under the OUTSA and DTSA must be denied as impermissibly overbroad.”  

To this author, this is a very important decision for both sides in trade secret lawsuits. For plaintiffs, this case is a warning that throwing everything but the kitchen sink into a case and maintaining that trade secrets are in there somewhere will fail. While trade secret plaintiffs may be uncomfortable specifying their trade secrets, being afraid to win the battle but lose the war by educating a competitor-defendant, they may thereby be left with a trade secret that is unenforceable in practice.  For defendants, the case is a reminder that pressing nervous plaintiffs to say exactly what their treasure is can expose the treasure to be dross if they do or lead a court to declare the treasure, if any, to be lost because the treasure map doesn’t say where to dig.

If you have any questions regarding the information covered in this blog, please contact John Baranello, Valeria Castanaro Galotta,  or your primary attorney at Moses Singer.