One of the most difficult things in prosecuting a trade secret case is determining how to define the trade secrets that have been misappropriated. If a plaintiff defines the trade secrets too narrowly, it runs the risk of failing to stop the misappropriation. However, if a plaintiff uses a definition of trade secrets that is based on broad or generic terms, then the plaintiff runs the risk that its requested injunctive relief will be denied.
Finite State Machine Labs, Inc. v. Spectracom Corp., No. A-17-CV-01040-SS, 2018 WL 4171503 (W.D. Tex. Aug. 30, 2018) is a good example of the latter. In Spectracom, plaintiff FSM Labs sued defendant Orolia, alleging that Orolia’s software product incorporated FSM Labs trade secrets acquired through the parties’ failed joint development arrangement. FSM Labs argued that Orolia’s product incorporated such trade secrets as its “components, information, parts, process, testing, training, and deficiencies.” The trial court, however, found that such a non-specific list of trade secrets was insufficient to basis for issuing a temporary injunction. Moreover, many of the items on the list were readily ascertainable through proper means, and there was no evidence that any of these items were used in Orilia’s product. Therefore, the court denied FSM Labs request for injunctive relief.