Tuesday, April 07, 2009, 4/07/2009 01:53:00 PM

California Uniform Trade Secrets Act Preempts Other Tort Claims

By Todd

The link above is to an interesting piece authored by Patrick Premo and Julie Nokleberg of the Fenwick & West law firm. They identify a recently entered California decision holding that the CUTSA preempted plaintiff's state law claims for breach of confidence, interference with contract and unfair competition because they were "based on the same nucleus of facts as the misappropriation of trade secrets claim."

Premo and Nokleberg note that the Court concluded that a broad view of CUTSA's preemptive effect was correct – specifically that CUTSA's "comprehensive structure and breadth" suggested a legislative intent to occupy the entire field of common law claims relating to trade secret misappropriation. Looking more narrowly, the Court found that the specific language of section 3426.7(b)(2), which reads "(b) This title does not affect...(2) other civil remedies that are not based upon misappropriation of a trade secret," would be rendered meaningless if common law claims based on misappropriation of trade secrets were not preempted. Finally, the language "based upon misappropriation" strongly suggested a factual inquiry, where the conduct alleged in the claim was examined for similarity to the misappropriation claim. Therefore, the Court ultimately agreed with and adopted the standard of prior federal cases, which held that section 3426.7(b) preempts common law claims that are "based on the same nucleus of facts as the misappropriation of trade secrets claim for relief."

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