Agency Solutions.Com, LLC v. Trizetto Group, Inc.
2011 U.S. Dist. LEXIS 103892
E.D. Cal.2011Background
- This is a diversity action by HCS against TriZetto seeking a preliminary injunction to stop Enrollment Manager as alleged trade secret misappropriation.
- The case concerns a 2009 Strategic Alliance Agreement governing development and marketing of an integrated solution known as QuoteToCard (QTC).
- Exclusivity and IP provisions control ownership, licensing, and post-termination rights regarding QTC components and related software.
- HCS alleges TriZetto used HCS trade secrets to develop Enrollment Manager and seeks to enjoin its marketing.
- TriZetto contends the alleged trade secrets are not protectable concepts and that disclosure via confidential documents does not equate to misappropriation.
- Judge Ishii denied HCS’s motion, finding insufficient proof of protectable trade secrets and lack of irreparable harm.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Adequacy of trade secret identification | HCS identifies trade secrets with specificity in Appendix C and Masciopinto declaration. | Zero or vague descriptions fail to meet statutory and case-law specificity requirements. | Not identified with sufficient particularity; failure to satisfy element. |
| Existence of trade secrets among the alleged items | Multiple items in Appendix 1 and Masciopinto Reply describe discrete, secret knowledge embedded in code. | Most items are general knowledge, ideas, or information reflected in program functionality, not secret. | Most alleged items fail as trade secrets; only some remain potentially questionable. |
| Misappropriation by improper means | TriZetto illicitly obtained and used trade secrets through the Alliance; misappropriation by improper means is plausible. | All information was disclosed under the Agreement and used within its terms; no improper means. | No misappropriation by improper means found. |
| Misappropriation by unlawful disclosure or use | Disclosures via marketing and the Service Manual threaten disclosure of trade secrets. | Service Manual not a trade secret; disclosure threat not adequately shown; use is uncertain. | No actionable unlawful disclosure or use established. |
| Necessity of irreparable harm for injunction | Threatened disclosure and competitive harm constitute irreparable injury. | Irreparable harm not shown; exclusivity breach is contract-based, not trade secret harm. | Irreparable harm not demonstrated; injunction denied. |
Key Cases Cited
- Silvaco Data Systems v. Intel Corp., 184 Cal.App.4th 210 (6th Dist.2010) (designs and functional descriptions are not trade secrets)
- Ajaxo, Inc. v. E*Trade Group, Inc., 135 Cal.App.4th 21 (6th Dist.2006) (disclosure via NDA does not automatically create trade secret misappropriation)
- MAI Systems Corp. v. Peak Computer, Inc., 991 F.2d 511 (9th Cir.1993) (specific customer database required; generalized claims fail)
- Diodes, Inc. v. Franzen, 260 Cal.App.2d 244 (4th Dist.1968) (pleading trade secrets requires with specificity)
- JustMed, Inc. v. Byce, 600 F.3d 1118 (9th Cir.2010) (use of trade secrets includes exploitation or sale of goods embodying the secret)