Carl Zeiss X-Ray Microscopy, Inc. v. Sigray, Inc.

Background

Carl Zeiss X-Ray Microscopy, Inc. (Zeiss) sued Sigray, Inc. for patent infringement, trade-secret misappropriation, and unfair competition. Zeiss alleged that it owned trade-secret information concerning the manufacturing and qualification of condenser lenses and scintillators used in x-ray microscopes. It also alleged that Sigray’s microscopes used lenses and scintillators made or qualified using misappropriated trade secrets and that Sigray infringed two identified patents.

The parties agreed to a case-management schedule under which Zeiss would identify its trade secrets under California Code of Civil Procedure § 2019.210, and Sigray would produce technical documents showing the structure, function, and operation of its accused products after that identification. Zeiss served an initial identification and then a First Amended Identification of Trade Secrets after Sigray challenged the disclosure.

Motion and legal standard

Zeiss moved for an order declaring that its trade-secret identification satisfied § 2019.210 and compelling Sigray to produce the technical documents. The parties agreed that § 2019.210 applied. That provision requires a party claiming trade-secret misappropriation to identify the trade secret with “reasonable particularity” before obtaining related discovery.

The court explained that reasonable particularity must allow the defendant to investigate the alleged trade secret, allow the court to control the scope of discovery, protect proprietary information, and permit the defendant to prepare a defense. The requirement does not demand a description of every minute detail or a mini-trial about the merits before discovery begins. It also does not automatically require a numbered list.

Court’s analysis

The court concluded that Zeiss’s disclosure, considered as a whole, made it difficult to determine the boundaries of the claimed trade secrets. The disclosure included broad categories, references to documents, “other trade secrets,” and examples described as illustrative. The court said Zeiss could not use terms such as “for example” or “including” to broaden the disclosure beyond specifically identified trade secrets.

The court also found that the disclosure did not clearly state whether a multi-step process or multi-element combination was claimed as a whole, whether individual steps or elements were separately claimed, or whether every possible combination was being claimed. Zeiss could identify a process or combination as a trade secret, but it could not use a phrase such as “any portions thereof” as a placeholder for all possible subsets and combinations.

The court agreed with Sigray that Zeiss’s broad references to exhibits could improperly encompass information in the public domain. Zeiss could refer to specific portions of documents, but it could not identify an entire document as merely “including” trade secrets without specifying the trade-secret information. Nor could it rely on unspecified “other documents and records” mentioned within cited materials without identifying those documents and the contents allegedly constituting trade secrets.

Technical-document production

The court denied Zeiss’s request to compel Sigray to produce technical documents. Although § 2019.210 applies only to discovery relating to alleged trade secrets, the parties’ joint proposal and the presiding judge’s case-management order made Sigray’s technical-document obligation depend on Zeiss’s identification of its trade secrets under § 2019.210. That condition applied regardless of whether the documents related to Zeiss’s trade-secret claims, patent claims, or both.

Because the court found that Zeiss had not yet provided a disclosure complying with § 2019.210, it denied the request to compel production. The court added that Zeiss would have to seek any relief from the case-management order from the presiding judge.

Disposition

The court denied Zeiss’s motion regarding the sufficiency of its trade-secret identification and to compel production of documents. The order addressed discovery and disclosure requirements; it did not decide whether Zeiss’s trade-secret or patent-infringement allegations ultimately succeed.