caltradesecrets.com

Northern District Applies California Code of Civil Procedure § 2019.210 to Federal “Misappropriation of Business Ideas” Case

In C.C.P. § 2019.210 Pre-Discovery Disclosure, Common Law Misappropriation, Discovery, Patricia V. Trumbull on October 11, 2010 at 8:20 am
notepad
Image by john yaya via Flickr

In a federal case, the Northern District of California applied a California rule of procedure, California Code of Civil Procedure 2019.210, in ordering a plaintiff to identify its allegedly misappropriated business ideas.  Interserve, Inc. v. Fusion Garage Pte Ltd., No. C-09-05812 RS (PVT), 2010 WL 3931100 (N.D. Cal. Oct. 6, 2010) (slip op.).  But after the court dismissed without leave to amend plaintiff’s tort claim for “misappropriation of business ideas”, the court rejected defendant’s challenge to the sufficiency of the disclosure as moot.  Id. *2

Background

Defendant Fusion Garage PTE, Ltd. brought a renewed motion for a protective order pursuant to California Code of Civil Procedure Section 2019.210 and Rule 26(c), contending that Plaintiffs Interserve, Inc., doing business as TechCrunch and CrunchPad. failed identify their misappropriated business ideas with any specificity.  Id. *1.  Plaintiffs alleged claims for (1) misappropriation of business ideas; (2) false advertising; (3) breach of fiduciary duty, and (4) fraud.

Defendant asserted the following deficiencies with plaintiffs disclosure:

(1) plaintiffs identified as misappropriated business ideas a variety of information that TechCrunch has previously disclosed on its blog posts on the Internet; (2) defendant disputed whether access to certain individuals, including Michael Arrington, Heather Harde, Louis Monier, Brian Kindle, Nik Cubrilovic and other TechCrunch personnel is a valid and misappropriated business idea; (3) plaintiffs identified broad-brush topics such as prototype A, and its hardware configuration as a misappropriated business idea; and (4) plaintiffs identified such common concepts as “insisting” that the device have a camera when “nearly every modern cell phone and Blackberry device has a camera” and a single button “even though numerous devices have a single button.” See, e.g., Mot. at 5. Finally, defendant disputed whether plaintiffs’ marketing prowess renders its ideas as protectable that can be misappropriated.

Id.

Plaintiffs contended that the statement was adequate, arguing that it included 33 paragraphs spanning seven pages as well as an attachment.  Id. Plaintiffs further contended that the statement was not even necessary for them to obtain the discovery sought because the discovery was also relevant to their claims of fraud and breach of fiduciary duty. Id.

Thereafter, the district court dismissed without leave to amend the tort claim for misappropriation of business ideas.  Id . *2.  Plaintiffs filed their amended complaint, and did not include a claim for misappropriation.   The court concluded that “defendant Fusion Garage’s renewed motion challenging the sufficiency of the Statement of Business Ideas is now largely moot.” Id.

Despite this, defendant Fusion Garage continued to dispute the relevance of its “source code, confidential technical documents about Fusion Garage’s product, the joo joo, or other documents seeking Fusion Garage’s trade secrets and proprietary information” pursuant to Rule 26(c).” Id. And defendant specifically objected to producing the source code for the joojoo product.” Id. *3. Defendant contended that plaintiff TechCrunch had no involvement whatsoever in its programming and development.  Id. Plaintiff TechCrunch did not appear to dispute that Fusion Garage was largely responsible for the actual source code itself but countered that “[s]ource code is also likely to have embedded comments that bear not only on the technical nature of the code, but also on the circumstances of its creation, including any venture or dealings with Plaintiffs.”  Id.

The court found that plaintiff TechCrunch showed that the metadata (i.e., programmer’s notes or comments, and other annotations within the source code) in the source code may be relevant to its claims.  Id. “The metadata and dates of creation and/or modification in the source code may show the nature and extent of the parties’ collaboration.” Id. Thus, the court ordered  defendant to produce the metadata to the source code for the joojoo product, including the dates showing when the code was created and/or modified.  Id. It allowed defendant to redact the actual source code from the production of metadata and dates of creation and/or modification to plaintiff. Id.

Judge

United States Magistrate Judge Patricia V. Trumbull.

By CHARLES JUNG

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: