GA Telesis, LLC v. Salesforce, Inc.

Background

GA Telesis asserted claims under the federal Defend Trade Secrets Act and the California Uniform Trade Secrets Act. The claims concerned the alleged misappropriation of trade-secret information in a synopsis of GA Telesis’s GATES Production System. GA Telesis allegedly gave Salesforce the synopsis after Salesforce signed a nondisclosure agreement requiring Salesforce to keep the information secret and not disclose it. The document was also marked as proprietary and not to be reproduced or transmitted without written authorization.

According to the amended complaint, Salesforce took confidential information from the synopsis and emailed it to Barfield, which the complaint identified as GA Telesis’s direct competitor, on October 30, 2019. The email allegedly included descriptive information from the synopsis, an example and outline of a “GATE” process, links to a relevant maintenance, repair, and overhaul video, and a GA Telesis use case created by Salesforce. The complaint also alleged that Salesforce used and disclosed GA Telesis’s trade-secret information in that use case.

Motion to Dismiss

Salesforce challenged the misappropriation element of the claims. For purposes of the motion, Salesforce did not dispute that GA Telesis adequately alleged ownership of a protectable trade secret or harm. Salesforce argued that GA Telesis had not alleged misappropriation as defined by the statutes, including because it allegedly disclosed or used only portions of the synopsis rather than the entire trade secret.

Court’s Analysis

The court explained that misappropriation includes disclosing or using another person’s trade secret without consent when the defendant knew or had reason to know that the information was acquired under circumstances creating a duty to maintain its secrecy or limit its use. Mere possession or internal discussion is not enough, but using confidential information in activities such as production, research, development, marketing, or soliciting customers can constitute use.

Taking the complaint’s allegations as true and viewing them in GA Telesis’s favor, the court held that GA Telesis plausibly alleged that Salesforce disclosed and used the trade-secret information without permission, for Salesforce’s benefit and to GA Telesis’s detriment. The court found Salesforce’s cited cases procedurally different because they involved later stages of litigation, including a trial judgment and summary judgment, rather than a motion to dismiss. The court found no on-point authority requiring dismissal at the pleading stage under the circumstances alleged.

Disposition

The court denied Salesforce’s motion to dismiss the amended trade-secret claims. Salesforce was ordered to answer the amended complaint within 14 days of the order.