No Explicit Efforts To Maintain Secrecy? No Problem, Suggests The Ninth Circuit

In Direct Technologies, LLC v. Electronic Arts, Inc., the Ninth Circuit set forth an interesting take on what is sufficient to demonstrate reasonable efforts to maintain secrecy under the California Uniform Trade Secrets Act ("CUTSA"). In the case, plaintiff Direct Technologies, LLC asserted a trade secret misappropriation claim against defendant Electronic Arts regarding the disclosure of its usb drive prototype for Electronic Arts to a third-party. The district court granted summary judgment for Electronic Arts, finding that no reasonable jury could find that Direct Technologies had taken reasonable efforts to maintain the confidentiality of its prototype.

The Ninth Circuit disagreed. While agreeing that "the record shows that [Direct Technologies] did not do much, if anything, to explicitly protect its prototype design," the Ninth Circuit nevertheless declined to affirm the decision on that basis. Citing the 1974 Ninth Circuit decision in Pachmayr Gun Works, Inc.