Growing Consensus That Trade Secret Claims Must Be Pleaded With Particularity In New York And Elsewhere

Key Takeaways:

• Federal courts in New York, and elsewhere, are increasingly requiring plaintiffs in trade secret cases to describe their trade secrets with specificity.
• This heightened standard makes it even more important for counsel to thoroughly investigate, and understand, a client's trade secrets so that he or she can carefully craft a complaint that complies with applicable pleading standards.

Under conventional pleading standards, courts generally allowed plaintiffs to describe their trade secrets with a level of generality when filing a complaint in a trade secret case. It often sufficed for plaintiffs to provide a rough description of the allegedly protected secrets along with allegations that the material was held as a secret and possessed "independent economic value" by virtue of being secret. This enabled plaintiffs to shield their trade secrets from the public and gave plaintiffs some flexibility in developing the trade secrets case as the litigation progressed.

But over the last several years, federal courts in New York'and California, Delaware, and Massachusetts, among others'are requiring plaintiffs to describe their trade secrets with greater detail or face dismissal.¹ In fact, Massachusetts codified this requirement in 2018.²

Momentum for a heightened pleading standard began to appear in New York with the cases of...