AllRounds, Inc. v. eShares, Inc., 3:20-cv-07083

Background

AllRounds, a provider of private-investment/fund-management software, sued Carta, Draper/DFJ-related entities, and others for patent infringement and trade secret misappropriation.
AllRounds alleges it disclosed confidential implementation details in meetings and customer agreements; defendants invested in or had financial ties to each other and to Carta; Carta’s product later resembled AllRounds’ software.
Defendants moved to dismiss for patent ineligibility under 35 U.S.C. § 101 and to dismiss trade secret claims (arguing lack of particularity, statute of limitations, and public disclosure via patent application/copyright deposit).
The court found the patents appear directed to an abstract idea but declined to resolve § 101 at the pleading stage due to factual and claim-construction issues requiring development.
The court held AllRounds’ trade-secret allegations sufficiently particular and plausible as to misappropriation and timing; disclosure/publication and statute-of-limitations defenses could not be resolved on a motion to dismiss.
The court dismissed Threshold Management LLC as a defendant for lack of specific culpable allegations, without prejudice to adding it later if discovery warrants.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Patent eligibility under § 101	Patents cover concrete software improvements for private-investment workflows	Patents are directed to an abstract idea and thus ineligible	Denied motion to dismiss; eligibility is a close question but requires factual/claim-construction development
Trade secret identification	Identifies specific software functionalities and implementation details disclosed to defendants	Alleged descriptions are generic or categorical, insufficiently particular	Identification adequate at pleading stage; plaintiff met minimal pleading requirement
Misappropriation / indirect liability	Timing of meetings, customer agreements, investments, product similarity support direct and indirect misappropriation	Similarity insufficient; no knowledge or notice of misappropriation; innocent independent development	Misappropriation plausibly pleaded against most defendants; Carta could be liable for indirect misappropriation at this stage
Statute of limitations	Claims timely based on alleged discovery/timing	Claims time-barred	Motion denied; not clear plaintiff can prove no set of facts making claims timely
Public disclosure (patent application / copyright deposit)	Alleged secrets are implementation details not disclosed in filings	Patent application and copyright deposit publicly disclosed the secrets, extinguishing trade-secret claims	Denied on motion to dismiss; factual disputes about extent of disclosure make resolution inappropriate now
Liability of Threshold Management LLC (DFJ entity)	Threshold is part of DFJ group and thus culpable	Threshold only alleged to have undergone a name change; no specific wrongdoing alleged	Threshold dismissed without prejudice for lack of specific allegations

Key Cases Cited

Trading Technologies International, Inc. v. IBG LLC, 921 F.3d 1378 (Fed. Cir. 2019) (software claims can be abstract)
Aatrix Software, Inc. v. Green Shades Software, Inc., 882 F.3d 1121 (Fed. Cir. 2018) (fact issues may preclude resolution of § 101 at pleading stage)
Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018) (where underlying factual questions exist, patent eligibility may not be decided on the pleadings)
InteliClear, LLC v. ETC Global Holdings, Inc., 978 F.3d 653 (9th Cir. 2020) (trade-secret pleadings require identification beyond catchall categories)
Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleadings)
Supermail Cargo, Inc. v. United States, 68 F.3d 1204 (9th Cir. 1995) (statute-of-limitations dismissal appropriate only when plaintiff cannot possibly succeed)
Attia v. Google LLC, 983 F.3d 420 (9th Cir. 2020) (public disclosures can defeat trade-secret claims but require factual analysis)