Tuesday, August 01, 2006, 8/01/2006 01:38:00 PM

Implied Preemption of Tort Claims by Uniform Trade Secrets Act

By Todd
Any attorney who's litigated departing employee misappropriation cases recognizes that the complaint often has seven or eight different claims for relief when the simple basis of the complaint is - "that departed person took our information/process/customer list and is a threat to us now."

California-based trade secrets litigation is apparently no different. The complaint in the case cited below alleges, among other things: (a) misappropriation of trade secrets under the California Uniform Trade Secrets Act; (b) conversion of trade secrets; (c) common law unfair competition through the theft and attempted use of trade secrets; and (d) statutory unfair competition through the theft and attempted use of trade secrets. What do (b), (c), and (d) have in common?

In the case of Air Defense, Inc. v. AirTight Networks, Inc., 2006 WL 2092053 (July 26, 2006 N.D. Cal.) the claims in (b), (c) and (d) all got dismissed as pre-empted by the statutory trade secrets act. The essential reasoning of the decision is that California's adoption of the Uniform Trade Secrets Act codified California's substantive law, and procedure, for complaining about and recovering for alleged theft of trade secrets. Using more nebulous tort or statutory unfair competition theories to get at this same set of facts isn't permitted.

Take note, our friends in California.

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