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Introduction
This publication summarizes noteworthy 2025 legal developments in trade secret law in key centers of commerce throughout the world. Understanding these legislative and judicial developments can help trade secret owners maintain trade secret protection, guard against misuse of their trade secrets by others, and assert rights as necessary.
KEY DEVELOPMENTS IN THE UNITED STATES
IDENTIFYING PROTECTABLE TRADE SECRETS
Ninth Circuit Finds that the Sufficiency of a Trade Secret Disclosure in Discovery Is a Question of Fact
Quintara Biosciences, Inc. v. Ruifeng Biztech, Inc., 149 F.4th 1081 (9th Cir. 2025)
The Ninth Circuit Court of Appeals recently decided a case of significance regarding a plaintiff's disclosure of its asserted trade secrets under the Defend Trade Secrets Act ("DTSA"). Quintara Biosciences, Inc., a DNA-sequencing-analysis company, brought suit in a California federal district court against Ruifeng Biztech, Inc., alleging misappropriation of trade secrets under the DTSA.1 At the outset of discovery, Ruifeng moved the court for a protective order to halt discovery until Quintara further specified its trade secrets. Ruifeng made its request consistent with California Code of Civil Procedure Section 2019.210, which requires that a plaintiff identify its trade secrets with reasonable particularity before obtaining discovery into a defendant's technology
While there was no California Uniform Trade Secrets Act ("CUTSA") claim in the case, the district court cited Section 2019.210 in ordering Quintara to further identify its trade secrets. Ultimately, Quintara did not identify its trade secrets to Ruifeng's satisfaction, and Ruifeng again moved to halt discovery. To end the discovery standoff, the district court gave Ruifeng a choice to either accept the disclosure and comply with discovery or move to strike the disclosure and accept the consequences if wrong. Ruifeng moved to strike the trade secrets in the disclosure under Federal Rule of Civil Procedure 12(f). Drawing on Section 2019.210, the district court granted the motion, striking nine of 11 trade secrets. The district court acknowledged that the state procedure did not govern, yet it applied that "reasonable particularity" rule "to nail down [Quintara's] asserted trade secrets ... [and] permit [the court] to discern the reasonable bounds of discovery."2
On appeal, the Ninth Circuit reversed the order striking the asserted trade secrets. The court explained that CUTSA's disclosure rule does not govern a DTSA claim and stated that under the DTSA, it is a question of fact whether a trade secret has been sufficiently identified in a disclosure. Thus, "whether a plaintiff has sufficiently particularized a trade secret under DTSA is usually a matter for summary judgment or trial."3
The Ninth Circuit held that the circumstances did not warrant the harsh penalty of dismissal of Quintara's claims as a sanction for failure to comply with a pretrial order under Federal Rule of Civil Procedure 37. Among other things, the Ninth Circuit noted that the district court did not consider alternatives before striking Quintara's trade secrets (including that after an opportunity for discovery on the identification of trade secrets, the district court could have invited a motion for summary judgment and, absent a genuine fact dispute as to whether the trade secrets were sufficiently particularized, could have granted summary judgment as to those trade secrets). Accordingly, the Ninth Circuit held that it was error for the district court to strike and functionally dismiss trade secret claims as a discovery sanction as part of the trade secret disclosure process.4
Quintara builds on prior Ninth Circuit cases stating that a plaintiff must sufficiently identify its trade secrets in order to prevail on the merits of a trade secret claim. See InteliClear, LLC v. ETC Glob. Holdings, Inc., 978 F.3d 653 (9th Cir. 2020); Imax Corp. v. Cinema Techs., Inc., 152 F.3d 1161 (9th Cir. 1998).
The holding in Quintara does not resolve the question of whether a DTSA defendant can insist on a sufficient trade secret identification before providing technical discovery. Nor does Quintara speak to the standard for pleading a DTSA claim. Quintara makes it clear that, for a defendant to prevail on grounds of insufficient particularity of a trade secret, the defendant usually must wait for summary judgment or trial to show that the trade secrets were not sufficiently identified.
Fourth Circuit Affirms Dismissal for Failure to Meet Sufficient Particularity Requirement
Sysco Mach. Corp. v. DCS USA Corp., 143 F.4th 222 (4th Cir. 2025)
Sysco Machinery Corporation, a manufacturer of rotary die cutting machines, sued its former distributor, DCS USA Corporation ("DCS"), for trade secret misappropriation. Sysco alleged that DCS sold counterfeit machines made by a Sysco competitor. According to Sysco, the competitor produced those machines using information stolen from Sysco. Sysco brought trade secret misappropriation claims against DCS under the DTSA and the North Carolina Trade Secrets Protection Act, in addition to several other claims. The instant lawsuit was Sysco's third attempt to bring a federal lawsuit against DCS, after the first two—which included the competitor and were filed in different districts—were dismissed.
The court emphasized that pleading a trade secret misappropriation claim requires some specificity given that "it is the type of claim that has the potential to seriously disrupt ordinary business relationships."
The district court dismissed Sysco's claim for trade secret misappropriation under Rule 12(b)(6) for failure to state a claim "because it was stated in 'broad, sweeping terms' that, 'absent factual enhancement,' lacked the specificity needed to be cognizable."5 The district court also denied Sysco's subsequent request to alter or amend the judgment and for leave to amend its complaint, finding that Sysco's behavior across its three civil actions called into question whether it had engaged in bad faith pleading practice.6
The Fourth Circuit affirmed the district court's dismissal of Sysco's trade secret misappropriation claims, holding that Sysco failed to plausibly allege either a valid trade secret or misappropriation. Sysco failed to identify its claimed trade secrets with sufficient particularity because its shifting trade secret definitions, in different parts of its complaint and at oral argument, forced the defendant and the court "into a fishing expedition to find evidence of a valid trade secret in the pleadings" from which the court "emerged empty-handed."7 At various points during litigation, Sysco identified the following as trade secrets:
- "Sysco's compilation of machinery, software, and confidential information,"8
- "Sysco's proprietary and confidential information, including the Copyrighted Works, and technical, financial, operations, strategic planning, product, pricing vendor, and customer information,"9 and
- "'[T]he technical documents, test videos, statistical data, client contracts, and other confidential information used by Sysco to develop and manufacture' rotary die cutting machines."10
According to the court, these definitions "suggest that nearly Sysco's entire business is a trade secret" and were so "sweeping and conclusory" that they prevented DCS from knowing what it was accused of misappropriating, and prevented the court from evaluating whether Sysco met the reasonable measures and independent economic value requirements.11
Other aspects of the complaint also doomed Sysco's claims. First, the court held that Sysco's claimed trade secrets like the "Copyrighted Works" included public information, which is ineligible for trade secret protection.12 Second, the court held that Sysco's complaint failed to plausibly allege misappropriation because it "did not make clear how DCS acquired, disclosed, or used its trade secrets."13 The court emphasized that pleading a trade secret misappropriation claim requires some specificity given that "it is the type of claim that has the potential to seriously disrupt ordinary business relationships."14
Footnotes
1 Quintara Biosciences, Inc. v. Ruifeng Biztech, Inc., 149 F.4th 1081, 1085 (9th Cir. 2025).
2 Id. at 1086.
3 Id. at 1085.
4 Id. at 1089.
5 Sysco Mach. Corp. v. DCS USA Corp., 143 F.4th 222, 227 (4th Cir. 2025).
6 Id.
7 Id. at 228–29.
8 Id. at 228.
9 Id.
10 Id. at 228–29.
11 Id. at 229 (quoting Krawiec v. Manly, 811 S.E.2d 542, 548 (N.C. 2018)).
12 Id.
13 Id. at 230.
14 Id.
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