Cal. Civ. Code § 3426 et seq.; Cal. Code Civ. Proc. § 2019.210
Trade secret misappropriation: the statute that eats your other claims
A claim in California superior courts · Last verified August 26, 2026
California's Uniform Trade Secrets Act protects information that derives value from not being known and that its owner took reasonable steps to keep secret.
Two features of it catch people who plead it as one count among many.
It supersedes the common law. Civil Code § 3426.7 displaces conflicting civil remedies for the misappropriation of a trade secret — and California courts read that to displace any common law claim resting on the same nucleus of facts. Conversion, unfair competition, breach of confidence, and interference counts pleaded alongside a trade secret claim are routinely struck.
And you must identify the secret before you take discovery. CCP § 2019.210 requires the plaintiff to identify the trade secret with reasonable particularity before commencing discovery relating to it. That requirement exists in almost no other jurisdiction, and it front-loads the hardest work in the case.
What the claim is
Someone acquired, disclosed, or used your trade secret by improper means, or knowing it had been obtained improperly.
The recurring situations: a departing employee taking customer lists, pricing, or technical information; a competitor hiring a team to obtain their former employer's methods; a vendor or partner using information shared under a non-disclosure agreement; a failed acquisition where the buyer keeps what it learned in diligence.
Where the right comes from
Civil Code § 3426 et seq., California's version of the Uniform Trade Secrets Act, adopted in 1984.
Section 3426.1 supplies the definitions. Section 3426.7 is the supersession provision.
What a plaintiff has to prove
- The plaintiff owned a trade secret.
- The defendant acquired, used, or disclosed it.
- Through improper means, or with knowledge it was acquired improperly or under a duty to maintain secrecy.
- The plaintiff was harmed, or the defendant was unjustly enriched.
A trade secret is information — including a formula, pattern, compilation, program, device, method, technique, or process — that:
- derives independent economic value from not being generally known to the public or to others who could obtain economic value from its disclosure or use, and
- is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
The secrecy efforts element is where claims fail. Information a company treated casually — shared without agreements, stored without access controls, distributed to employees with no confidentiality obligation — is not a trade secret however valuable it is. Reasonable efforts are proved with documents: NDAs, access restrictions, marking, exit interviews, policies enforced in practice.
"Improper means" includes theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, and espionage. It expressly excludes reverse engineering and independent derivation, which are lawful.
The supersession trap — plead this carefully
Civil Code § 3426.7 displaces conflicting civil remedies for trade secret misappropriation.
California courts read it broadly. In K.C. Multimedia, Inc. v. Bank of America Technology & Operations, Inc. (2009) 171 Cal.App.4th 939 and Silvaco Data Systems v. Intel Corp. (2010) 184 Cal.App.4th 210, the Courts of Appeal held CUTSA supersedes common law claims based on the same nucleus of facts as the trade secret misappropriation — not merely claims that duplicate its elements.
So the standard belt-and-braces complaint backfires. Conversion, unfair competition, breach of confidence, unjust enrichment, and interference claims arising from the same taking are displaced, and a defendant's first motion will target them.
A note for anyone citing Silvaco: it was disapproved on other grounds by Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, on a point unrelated to supersession.
What survives supersession:
- Breach of contract — an NDA or employment agreement claim is expressly preserved by § 3426.7.
- Claims resting on facts other than the misappropriation — a separate breach of fiduciary duty, or the taking of information that is not a trade secret, though the latter is a difficult position to hold.
- Federal claims, including the federal trade secrets statute, which may be pleaded alongside.
The practical rule: plead the CUTSA claim, plead the contract claim, and be deliberate about anything else.
How long you have to file
Three years, under Civil Code § 3426.6, from when the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered.
A continuing misappropriation is a single claim. The statute says so expressly — continued use does not restart the clock. That is unusual and it runs against plaintiffs: a defendant who has been using the secret openly for four years is protected even though the use continues today.
What has to happen before you file
Nothing to file.
But before discovery, CCP § 2019.210. In an action alleging trade secret misappropriation, the plaintiff must identify the trade secret with reasonable particularity before commencing discovery relating to it.
Character: a procedural gate on discovery, not on the claim. The action may be filed without it; the case cannot move without it.
It is more consequential than it sounds, for two reasons. It forces the plaintiff to commit early, before discovery has shown what the defendant took — and the identification defines the scope of the case thereafter. And it produces satellite litigation: motions over the adequacy of the identification are routine and can delay a case by months.
"Reasonable particularity" means enough to distinguish the secret from general knowledge in the field and to let the court determine the scope of discovery. A description at the level of "our customer data and business methods" will not do.
Who can be sued — and who cannot
The person who took or used it, and their new employer, where the employer knew or had reason to know.
Not someone who reverse engineered it or developed it independently. Both are expressly lawful, and independent derivation is a complete defense.
And employee mobility is protected in California in a way it is not elsewhere. Business and Professions Code § 16600 voids non-compete agreements, and California has strengthened that position repeatedly. An employer cannot use a trade secret claim as a substitute for a non-compete, and the "inevitable disclosure" doctrine — under which some states enjoin an employee from taking a job where they would inevitably use a former employer's secrets — has been rejected in California.
That rejection matters more than any other single fact about these cases. A plaintiff must prove actual or threatened misappropriation, not merely that the employee knows things and went to a competitor.
Common defenses
The information is not a trade secret — generally known, readily ascertainable, or of no independent economic value.
No reasonable efforts to maintain secrecy — the most common and most effective defense, proved by what the plaintiff did not do.
Independent development, and reverse engineering.
No improper means — the information was disclosed voluntarily, or acquired lawfully.
The § 2019.210 identification is inadequate, which stalls the case.
The three-year period, with the single-claim rule for continuing misappropriation.
Employee mobility, and the rejection of inevitable disclosure.
Anti-SLAPP, rarely, where the disclosure was speech on a public issue.
What the claim pays
Actual loss caused by the misappropriation.
Unjust enrichment — the defendant's gain, to the extent not accounted for in the actual loss. Note the contrast with the Unfair Competition Law, where nonrestitutionary disgorgement is barred: here the defendant's gain is recoverable.
A reasonable royalty, in lieu of the other measures, where neither is provable.
Exemplary damages of up to twice the award, for wilful and malicious misappropriation, under § 3426.3.
Attorney's fees, under § 3426.4 — and this one runs both ways. Fees are available to a prevailing plaintiff where the misappropriation was wilful and malicious, and to a prevailing defendant where the claim was made in bad faith. A trade secret claim brought to suppress competition is a genuine fee risk.
Injunctive relief, under § 3426.2 — often the real object. An injunction may continue for as long as necessary to eliminate the commercial advantage gained, and in exceptional circumstances may condition future use on a royalty rather than prohibiting it.
Preservation of secrecy during litigation is expressly protected by § 3426.5, and sealing and protective orders are routine.
Jury trial: yes on damages; injunctive relief is equitable.
What people get wrong
"I'll plead conversion and unfair competition too, to be safe." Those counts are displaced by CUTSA if they rest on the same facts, and pleading them invites a motion you will lose.
"It's valuable, so it's a trade secret." Only if you took reasonable steps to keep it secret. Value without secrecy efforts is not protectable.
"They know our methods, so they can't work for a competitor." California rejects inevitable disclosure and voids non-competes. You must prove actual or threatened misappropriation.
"They reverse engineered it, which is theft." It is expressly lawful.
"They're still using it, so my claim is fresh." A continuing misappropriation is a single claim accruing at discovery. Continued use does not restart the three years.
"I'll figure out what they took during discovery." You must identify the secret with reasonable particularity before discovery relating to it.
"There's no downside to filing." A claim brought in bad faith exposes you to the defendant's attorney's fees.
Where it came from
Trade secret protection began in equity as an offshoot of breach of confidence, and it was unsystematic — a body of case law about employees, competitors, and confidential relationships, varying sharply between states.
The Uniform Trade Secrets Act was drafted to fix that, and California adopted it in 1984. The uniform structure supplied a definition, a limitations period, remedies, and — critically — the supersession provision, whose purpose was to replace the tangle of overlapping common law theories with one statutory claim.
California courts have enforced that purpose more aggressively than most. K.C. Multimedia and Silvaco read § 3426.7 to displace claims sharing a nucleus of facts with the misappropriation, which is broader than displacing claims sharing its elements — and it means the statute did what it was designed to do.
The other California distinctive is employee mobility, and it comes from a different statute entirely. Business and Professions Code § 16600's prohibition on non-competes reflects a policy judgment as old as the state, and California courts have consistently refused to let trade secret law become a route around it. Rejecting inevitable disclosure was the necessary consequence: a doctrine that enjoins an employee from taking a job because of what they know is a non-compete by another name.
Section 2019.210 is California's own addition, with no counterpart in the uniform act. It was enacted because trade secret claims were being filed without a defined secret and used as a vehicle for discovery into a competitor's operations. The identification requirement makes the plaintiff say what was taken before finding out.
Common questions
Can I plead conversion and unfair competition alongside a trade secret claim?
Generally not, if they rest on the same facts. Civil Code § 3426.7 supersedes common law claims sharing a nucleus of facts with the misappropriation. A breach of contract claim on an NDA is expressly preserved.
Do I have to say what the secret is before discovery?
Yes. CCP § 2019.210 requires you to identify the trade secret with reasonable particularity before commencing discovery relating to it — a requirement that exists in almost no other state.
My former employee went to a competitor and knows everything. Can I stop them?
Not on that alone. California voids non-compete agreements and rejects the inevitable disclosure doctrine. You must prove actual or threatened misappropriation.
They reverse engineered our product. Is that misappropriation?
No. Reverse engineering and independent development are both expressly lawful.
How long do I have?
Three years from when you discovered or should have discovered the misappropriation. Continuing use is a single claim — it does not restart the clock.
Can I recover their profits?
Yes. Unjust enrichment is recoverable to the extent not counted in your actual loss, along with a reasonable royalty as an alternative, and up to double damages for wilful and malicious misappropriation.