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Through a series of preliminary rulings, the Central District of California has found that a nonprofit organization’s confidential membership list could constitute a trade secret under the Defend Trade Secrets Act (DTSA). The case is Brain Injury Association of California v. Yari, No. CV 19-5912-MWF (JCX) (C.D. Cal.).

The plaintiff, Brain Injury Association of California (BIAC), alleges that a former BIAC board member, Naz Yari, took off with BIAC’s “master list”—a detailed compilation of data regarding 100,000 members of the traumatic brain injury community. BIAC used the master list to plan its annual conference, which boasted thousands of attendees and half a million dollars of funds raised. Immediately after resigning from the BIAC board, Yari formed a new nonprofit organization, Brain Society of California (BSC), and began planning a competing conference on BSC’s behalf. BIAC brought suit for misappropriation of trade secrets, among other claims, in July 2019. In August 2019, the court issued a temporary restraining order prohibiting Yari from accessing, using, or disclosing any contact information from BIAC’s master list.
Continue Reading Nonprofit Organization Member Lists Can Be Trade Secrets

The Third Circuit recently affirmed a ruling out of the U.S. District Court for the Middle District of Pennsylvania, which held that a NASA subcontractor could sue for misappropriation of trade secrets under the Pennsylvania Uniform Trade Secrets Act (the UTSA), even though the subcontractor did not own the trade-secret information. The subcontractor, Advanced Fluid Systems, Inc. (AFS), had signed a contract granting exclusive ownership rights in the hydraulic systems it designed to the Virginia Commonwealth Space Flight Authority. But the Third Circuit held that AFS could nonetheless maintain a lawsuit when its former employee misappropriated the designs for the benefit of AFS competitors.
Continue Reading Non-Owner Allowed to Sue for Trade Secret Misappropriation Where the Owner Had “Lawful Possession” of the Trade Secret

CleanFish LLC, a seafood wholesaler and importer, faced an early setback in its case against its founder who allegedly started a competing company by using CleanFish’s confidential customer lists and information. CleanFish alleged state and federal trade secret misappropriation claims and breach of contract based on confidentiality and proprietary-rights agreements.

In a March 17, 2020 ruling, the U.S. District Court for the Northern District of California dismissed CleanFish’s trade secret claims because it failed to identify any trade secret with sufficient particularity. CleanFish’s general descriptions of “customer lists, customer purchasing data, customer sales figures[,] and other related customer purchasing analysis and trends” were too broad and vague, making them indistinguishable from matters of general knowledge in the seafood-distribution business. On the other hand, the court allowed that the breach-of-contract claim could proceed because the contracts did not require CleanFish to allege a defined trade secret. (CleanFish has since amended its complaint, and defendants moved to dismiss).
Continue Reading CleanFish, LLC v. Sims