CAFC Affirms District Court's Ruling That Trade Secrets Were Not Sufficiently Identified Under Statute

"Business analytics company APT sued MarketDial, Inc. and John Stoddard in the U.S. District Court for the District of Utah for patent infringement and trade-secret misappropriation and later added Morgan Davis as a defendant and added breach-of-contract and tort claims. Stoddard formerly worked with consulting firm McKinsey & Company, Inc. where he was part of a team that evaluated software, including APT's Test & Learn ("T&L") software."

"The Utah district court granted Market Dial's motion to dismiss APT's breach-of-contract claim against Stoddard, finding that APT "failed to establish that it was a third-party beneficiary of Stoddard's Employee Agreement." It then found that APT "failed to sufficiently identify and define its alleged trade secrets and failed to provide sufficient evidence that they derive independent economic value from not being generally known or readily ascertainable, as required by both" the Defend Trade Secrets Act (DTSA) and the Utah Uniform Trade Secrets Act (UUTSA)"

The CAFC affirmed the district court's finding that APT failed to sufficiently identify alleged trade secrets under both the Defend Trade Secrets Act and the Utah Uniform Trade Secrets Act. APT sued MarketDial and two former consultants, alleging patent infringement and trade-secret misappropriation after documents were shared while the consultants were at McKinsey and BCG and later founded MarketDial. The district court dismissed APT's breach-of-contract claim for lack of third-party beneficiary status and granted summary judgment on trade-secret claims for failure to identify secrets and to show independent economic value from secrecy.

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