Ninth Circuit Reverses Preliminary Injunction in Inevitable Disclosure Case

In Lam Research Corporation v. Deshmukh, the Court of Appeals for the Ninth Circuit reversed a preliminary injunction granted by the Western District of Washington sought on the theory of inevitable disclosure. The case turned on choice of law. Washington trade secrets law recognizes the doctrine of inevitable disclosure, i.e. the theory that a key employee simply going to work for competitor would cause an inevitable disclosure of trade secrets. California law rejects the doctrine. The case thus turned on which state's law applied.

The court of appeals held that the district court erroneously applied Washington law. Under Washington's choice of law principles, the court should have looked to the state with the "most significant relationship" to the case. In a case with a California corporate defendant and an individual, originally resident in Washington, but moved to California, the court found that the state with the most significant relationship was California.