Walking The 2019.210 Tightrope

As a recent ruling from Magistrate Judge Paul S. Grewal in the Northern District of California demonstrates, plaintiffs must walk a tightrope when deciding what to disclose in their Cal. Civ. Proc. Code § 2019.210 statements.

In a wide ranging battle to protect its intellectual property, which includes the filing of criminal and civil complaints in Taiwan and a Taiwanese police raid of Defendants’ offices, Plaintiffs VIA Technologies, Inc. and VIA Labs, Inc. (hereinafter “VIA”) filed a patent infringement and trade secrets misappropriation suit against Defendants ASUS Computer International, ASUSTek Computer Inc., and ASMedia Technology, Inc. (hereinafter “ASUS”) in late 2014.

Earlier this year, VIA filed a motion to compel the additional production of documents, alleging that ASUS’s production was insufficient. ASUS countered that it only needed to produce documents related to trade secrets that VIA had specifically identified in its § 2019.210 statement. Although Judge Grewal granted VIA’s motion in-part, it was a hollow victory.

For those unaware, § 2019.210 requires that in an action alleging trade secrets misappropriation under the California Uniform Trade Secrets Act, the party alleging the misappropriation must identify the trade secrets at issue with reasonable particularity before discovery relating to the trade secret can begin.

VIA alleged in its motion that because its stolen trade secrets included large functional areas of USB chipsets, ASUS had to turn over their design schematics for those same functional areas for every USB chip that ASUS manufactured. ASUS argued that it was only required to produce schematics corresponding to 12 components that VIA disclosed in its § 2019.210 statement and the 3,300 pages of documents that VIA produced to support its disclosure. Judge Grewal’s order came down to the insufficiency of VIA’s § 2019.210 statement.

In analyzing VIA’s disclosure, the court found that while VIA did identify 12 schematics with particularity, the layers of hedging language used, such as “include, but are not limited to,” made VIA’s disclosure insufficient. VIA’s § 2019.210 statement was clear that VIA considered all of its analog and digital schematics trade secrets in their entirety. However, VIA failed to identify with particularity all of these trade secrets. The court even found the 3,300 pages of documents produced to support VIA’s disclosure to be useless without context. Accordingly, Judge Grewal only ordered that ASUS produce circuit designs of portions of their accused products that would correspond with the 12 component schematics VIA identified with particularity, documents that ASUS stated it had already produced. Additionally, Judge Grewal ordered that ASUS produce schematics that were already in VIA’s possession. Beyond that, the court stated that VIA’s present disclosure failed to merit any more discovery. In fact, as Judge Grewal made clear, VIA was lucky that he did not rule out all discovery in the case because of the insufficiency of its § 2019.210 statement. Accordingly, although VIA’s motion was granted-in-part, VIA failed to receive any of the additional discovery that it requested.

This order highlights common arguments presented about the role of § 2019.210 statements. Plaintiffs often want to limit the amount of information disclosed in the § 2019.210 statement for fear of it being disclosed to competitors. Defendants, on the other hand, may attempt to argue that discovery must be limited by the scope of the trade secrets statement.