# InteliClear v. ETC Global: When Must a DTSA Plaintiff Pin Down Its Trade Secrets?

> The Ninth Circuit held trade-secret identification is usually a fact question, and one secret described with particularity defeats early summary judgment.

Topic: Trade Secrets  |  Author: Lidiia Levitska  |  Source: Intellectual Property Law (outsideipcounsel.com)
Canonical: https://outsideipcounsel.com/blog/inteliclear-v-etc-global-dtsa-identification-timing/


Trade-secret defendants routinely argue that a plaintiff has never said, with any precision, what its secret actually is. That gambit collapsed in *InteliClear, LLC v. ETC Global Holdings, Inc.*, 978 F.3d 653 (9th Cir. 2020), decided October 15, 2020. The United States Court of Appeals for the Ninth Circuit reversed a summary judgment that a district court had entered before any discovery had taken place, holding that whether a plaintiff has identified its trade secrets with sufficient particularity is ordinarily a triable question of fact, and that identifying even one secret with the requisite specificity is enough to create a triable issue.

The decision matters because "identify your trade secrets" is the first and often decisive battleground in modern misappropriation litigation. Defendants press for an early, exacting disclosure; plaintiffs resist over-describing their secrets in public filings. *InteliClear* supplies the Ninth Circuit's clearest statement on how that tension resolves under the federal Defend Trade Secrets Act (DTSA), 18 U.S.C. § 1836, and its California counterpart.

## At a glance

- **Case:** *InteliClear, LLC v. ETC Global Holdings, Inc.*, 978 F.3d 653, No. 19-55862 (9th Cir. 2020).
- **Decided:** October 15, 2020, on appeal from the Central District of California (No. 2:18-cv-10342, Judge R. Gary Klausner); opinion by Judge Gould, reversing.
- **Holding:** Whether a plaintiff has described its trade secrets with sufficient particularity is generally a question of fact, and identifying at least one trade secret with particularity creates a triable issue; denying InteliClear's Rule 56(d) request to defer a summary judgment ruling until discovery had proceeded was an abuse of discretion.
- **Status:** Summary judgment reversed. The panel expressly left ETC free to renew its summary judgment motion after the conclusion of discovery.

## The identification requirement and where it lives

As the *InteliClear* panel framed it, a DTSA plaintiff must prove three things: that it possessed a trade secret, that the defendant misappropriated it, and that the misappropriation caused or threatened damage to the plaintiff. The trade-secret element itself has components. The information must derive independent economic value from not being generally known or readily ascertainable, and the owner must have taken reasonable measures to keep it secret. See 18 U.S.C. § 1839(3). California's Uniform Trade Secrets Act, Cal. Civ. Code § 3426.1, tracks the same structure, and the *InteliClear* court analyzed the federal and state claims together.

Layered on top of the statutory elements is a practical gatekeeping rule the courts have developed: a plaintiff must identify the alleged trade secret with "sufficient particularity" to separate it from matters of general knowledge in the trade and from the skill an ordinary person in the field would possess. The rationale is fairness and administrability. A defendant cannot mount a defense against a secret it cannot see, and a court cannot decide misappropriation without knowing what was allegedly taken. But the same rule cuts the other way: forcing a plaintiff to describe its secret in exhaustive public detail can destroy the very secrecy the suit is meant to protect. *InteliClear* sits at that fault line.

## The facts and the premature ruling

InteliClear built a securities-clearing and settlement software platform, the InteliClear System, that it licensed to financial firms. ETC Global Holdings, through a subsidiary, licensed the system and later developed its own competing platform. InteliClear sued for trade-secret misappropriation under both the DTSA and California law, alleging that ETC had copied the architecture and design of the InteliClear System.

At the highest level of generality, InteliClear described its trade secrets as "the InteliClear System's unique design and concepts and the unique software, formulas, processes, programs, tools, techniques, tables, fields, functionality, and logic by which its components interrelate and process data." It also submitted a sealed declaration from Martin Barretto, the system's architect, pointing to specific database tables, table columns, account identifiers, codes, and the methodologies by which components interrelated. ETC moved for summary judgment on May 21, 2019, the day after discovery opened and before any discovery had been requested or provided. The district court granted the motion and denied InteliClear's Rule 56(d) request to defer a ruling, reasoning that InteliClear had failed to identify its trade secrets with adequate particularity and that discovery would not cure the deficiency.

## The Ninth Circuit's reasoning

The panel reversed on two independent grounds. First, it held that trade-secret identification is ordinarily a factual question, not a threshold legal one that a court can resolve on the pleadings or on a bare record. Because the existence and definition of a trade secret turn on evidence about what is generally known in the industry and what the plaintiff actually protected, those disputes belong to the factfinder unless the record is one-sided.

Second, and more concretely, the court held that the presence of catch-all or hedging language does not doom a claim if the plaintiff has identified at least one trade secret with sufficient particularity. InteliClear had done exactly that. Its declaration pointed to specific tables, columns, account identifiers, and codes, and explained the methodology by which the system's components interrelated to process data. That level of detail, the court reasoned, was concrete enough to distinguish the claimed secret from general programming knowledge and to allow a jury to evaluate misappropriation. The additional, broader language did not subtract from the particularity of the concrete disclosures; it simply reserved InteliClear's ability to prove more as discovery unfolded.

The timing compounded the error. The district court had granted summary judgment before any discovery had taken place, and it had refused InteliClear's request under Federal Rule of Civil Procedure 56(d) to defer the ruling until discovery proceeded. That refusal, the panel held, was an abuse of discretion. Reviewing the record, the panel concluded that the summary judgment was "precipitous, premature and did not fairly permit development of the issues for resolution," because the nonmoving party had not had the opportunity to discover information essential to its opposition. As the panel put it, even a small amount of discovery would have let InteliClear clarify the discrete points ETC called unclear, "which would have driven a potentially meritorious case forward."

## What the decision changed in practice

*InteliClear* recalibrated the leverage in the identification fight. Before it, defendants in the Ninth Circuit could argue that anything short of an exhaustive, itemized list of secrets warranted dismissal, and some district courts obliged early. After it, the message is that a plaintiff who can point to even one secret with concrete particularity, a named table, a specific code, a described methodology, is entitled to reach discovery and, usually, a jury. Hedging language that preserves flexibility is tolerated, provided it accompanies at least one well-defined secret.

The decision does not, however, license vagueness. The court took pains to note that InteliClear had submitted specific, technical detail. A plaintiff that offers only abstractions, describing its secret as its "business methods" or "proprietary software" without more, still risks dismissal because such descriptions cannot be separated from general industry knowledge. The lesson is one of floor-setting: identify one thing precisely, and the catch-all language will not sink the claim.

## Open questions

The opinion leaves several edges unresolved. It does not fix a uniform standard for how detailed the "one" particularized secret must be; the sufficiency of any given description remains case-specific and fact-bound. On California Code of Civil Procedure section 2019.210, which requires a pre-discovery identification statement in California trade-secret cases and which some federal courts have applied in federal cases, the panel said only in a footnote that a triable issue existed under both the federal and the state standard, without resolving whether or when section 2019.210 governs in federal court. And because the panel emphasized the premature timing, it left open how the same identification arguments should fare after a full discovery record, when a defendant may renew its particularity challenge on a developed factual basis rather than at the outset of the case. Footnote 5 of the opinion expressly preserves that possibility.

## Implications for inventors and businesses

- **Identify one secret with surgical precision.** A single trade secret described with concrete specificity, a named database table, a particular code or parameter, a defined methodology, is enough to survive summary judgment. Do not rely on catch-all phrasing alone.
- **Preserve flexibility, but anchor it.** Broad, hedging language is permissible when it accompanies at least one particularized secret. It is fatal only when it stands alone.
- **Resist premature dismissal on timing grounds.** If a defendant moves before meaningful discovery, invoke *InteliClear* to argue that identification is a fact question the plaintiff is entitled to develop through discovery.
- **Mind the state-court overlay.** In California actions, section 2019.210 may still require an early identification statement; the federal rule of *InteliClear* does not displace that separate procedural obligation.

## Frequently asked questions

**Does *InteliClear* require a plaintiff to identify every trade secret with particularity to survive summary judgment?** No. The Ninth Circuit held that identifying at least one trade secret with sufficient particularity creates a triable issue. Broad or hedging catch-all language does not defeat the claim so long as one secret is described concretely enough to separate it from general knowledge in the field.

**Can a court grant summary judgment on trade-secret identification before discovery has occurred?** Only rarely. ETC moved the day after discovery opened, and the panel held the district court abused its discretion by refusing InteliClear's Rule 56(d) request to defer a ruling until discovery proceeded, because whether information is a trade secret is ordinarily a question of fact that the plaintiff is entitled to develop through discovery.

**What counts as identifying a trade secret with sufficient particularity?** The description must distinguish the claimed secret from matters of general knowledge or skill in the trade. InteliClear pointed to specific database tables, columns, account identifiers, codes, and the methodology by which components interrelate, which the court found particular enough to reach a jury.

## Authorities and sources

- *InteliClear, LLC v. ETC Global Holdings, Inc.*, 978 F.3d 653 (9th Cir. 2020), slip opinion (Ninth Circuit): https://cdn.ca9.uscourts.gov/datastore/opinions/2020/10/15/19-55862.pdf
- *InteliClear, LLC v. ETC Global Holdings, Inc.* (Leagle): https://www.leagle.com/decision/infco20201015108
- Defend Trade Secrets Act, 18 U.S.C. § 1836 and definition at § 1839(3): https://www.law.cornell.edu/uscode/text/18/1839
- Sheppard Mullin, "Trade Secret Takeaways from the Ninth Circuit's Decision in InteliClear, LLC v. ETC Global Holdings, Inc.": https://www.tradesecretslawblog.com/2020/11/ninth-circuits-inteliclear-global-holdings/
- Benesch, "No More Early Gatekeeping: Ninth Circuit Clarifies Timing For Trade Secret Identification Under DTSA": https://www.beneschlaw.com/insight/no-more-early-gatekeeping-ninth-circuit-clarifies-timing-for-trade-secret-identification-under-dtsa/
- IPWatchdog, "Ninth Circuit Gives Guidance on Specification of Trade Secrets Under the Defend Trade Secrets Act": https://ipwatchdog.com/2021/02/02/ninth-circuit-gives-guidance-specification-trade-secrets-defend-trade-secrets-act/id=129584/