Intellectual Property News and Reports

The panel reversed the district court’s grant of summary judgment in favor of ETC Global Holdings, Inc. in an action alleging that ETC misused InteliClear, LLC’s securities trading tracking system.

InteliClear brought claims for trade secret misappropriations under both the federal Defend Trade Secrets Act (“DTSA”) and the California Uniform Trade Secrets Act.

The panel held that there was a genuine issue of material fact as to whether InteliClear identified its trade secrets with sufficient particularity. The panel further held that a jury properly instructed could make the determination of what trade secrets existed, before addressing other elements of the claim.

Under the DTSA, a required element of a trade secret is that the owner “has taken reasonable measures to keep such information secret.” 18 U.S.C. § 1839(3). The panel held that there was a triable issue whether InteliClear had shown that parts of the InteliClear system were secret. Specifically, first, the panel held that InteliClear, through a declaration, had demonstrated that its alleged trade secrets were not simply uncommon in other systems, but in combination, unique in the industry. Second, the panel held that InteliClear contended correctly that it took reasonable measures to encrypt and compile its source code and require licensees to agree to confidentiality. The panel concluded that a reasonable jury could find that portions of the InteliClear system were not generally known or reasonably ascertainable to others.

The panel held that the district court abused its discretion under Fed. R. Civ. P. 56(d) by issuing its summary judgment ruling before discovery occurred. The panel concluded that the summary judgment granted was precipitous, premature and did not fairly permit development of the issues for resolution because the nonmoving party did not have a discovery opportunity.

Download InteliClear LLC v. ETC Global Holdings Inc.