Ensoniq Corp. v. Superior Court

65 Cal. App. 4th 1537, 77 Cal. Rptr. 2d 507, 98 Cal. Daily Op. Serv. 6387, 98 Daily Journal DAR 8833, 1998 Cal. App. LEXIS 712
CourtCalifornia Court of Appeal
DecidedAugust 14, 1998
DocketNo. H016861
StatusPublished
Cited by12 cases

This text of 65 Cal. App. 4th 1537 (Ensoniq Corp. v. Superior Court) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ensoniq Corp. v. Superior Court, 65 Cal. App. 4th 1537, 77 Cal. Rptr. 2d 507, 98 Cal. Daily Op. Serv. 6387, 98 Daily Journal DAR 8833, 1998 Cal. App. LEXIS 712 (Cal. Ct. App. 1998).

Opinion

Opinion

COTTLE, P. J.—

I. Introduction

This matter arises from the competing claims of petitioner Ensoniq Corporation (hereafter, Ensoniq) and its former employee, real party in interest Jon Dattoro (hereafter, Dattoro) to intellectual property which Dattoro brought to California when he left his employment with Ensoniq. Ensoniq contacted the district attorney, who obtained a search warrant and seized the disputed property from Dattoro’s residence. However, the district attorney decided not to prosecute Dattoro, who then brought a motion for return of the seized property.

Ensoniq now seeks a writ of mandate to compel respondent superior court to vacate its order setting forth the procedure for the hearing on Dattoro’s motion for return of property seized under search warrant. In its order, the superior court ruled that Ensoniq has no standing to participate in the hearing, and permitted only the district attorney to present evidence that Ensoniq is the rightful owner of the seized property.

We hold that the superior court properly determined that, under the circumstances of this case, Ensoniq is a third party with no standing under the Penal Code to apply for delivery of the seized property or otherwise contest Dattoro’s motion for return of seized property. We also hold that the court erred in requiring the district attorney to participate in the hearing, because the trial court cannot compel the district attorney to oppose a motion for return of seized property. The district attorney has not charged Dattoro with any crime, has conceded that the People cannot prove that Dattoro stole the seized property from Ensoniq, and has not objected to the return of the property to Dattoro.

Under these circumstances, due process requires that Dattoro’s motion for return of legal property seized under warrant be granted, and that the superior court issue an order returning actual possession of the seized physical items to Dattoro. As we further explain, this order is limited to a determination of the right of actual possession of the physical items in this [1543]*1543proceeding, and has no effect upon the parties’ competing civil claims to ownership of either the physical items or the intellectual property contained within them. We therefore grant the petition for writ of mandate, and direct respondent court to issue an order in accordance with our holding.

II. Factual and Procedural Background

A. Seizure of Property Pursuant to Search Warrant

Dattoro was employed by Ensoniq as a design engineer from May 1987 until he resigned in July 1995. Ensoniq is a company based in Pennsylvania which develops computer software to operate musical instruments. As a design engineer, Dattoro maintained engineering notebooks in which he recorded his progress in developing mathematical computations and algorithms for Ensoniq products.

While he was employed at Ensoniq, Dattoro was advised by his Pennsylvania attorney that under Pennsylvania law an employee owns the trade secrets and inventions which he has developed on company time and premises, in the absence of any agreement to the contrary. The Pennsylvania attorney further advised Dattoro that when he left Ensoniq he could take with him any documents containing trade secrets owned by him.

Dattoro resigned from Ensoniq in 1995 and moved to Palo Alto, California. He brought his engineering notebooks with him, along with other items acquired through his work at Ensoniq. Ensoniq then sought return of the engineering notebooks and other items by way of the California criminal justice system.

In January 1996, Ensoniq’s attorney contacted the Santa Clara County District Attorney’s office to report the theft of trade secrets by Dattoro. Ensoniq’s vice-president of engineering executed an affidavit stating that Dattoro refused to return engineering notebooks containing Ensoniq’s proprietary information, and that Dattoro had also taken books belonging to Ensoniq.

The deputy district attorney then obtained a search warrant for Dattoro’s residence and vehicle. The search warrant described the stolen property as documents, including documents in computer readable form, which contained information pertaining to specific Ensoniq projects or products; computers, peripheral devices, and computer disks; and documents, such as telephone bills, showing the identity of the residents of the house.

The search warrant was executed at Dattoro’s Palo Alto residence on March 21, 1996. The property seized included engineering notebooks, [1544]*1544source code, documents and papers, computer discs, computer drives, data tapes, and computer chips. Subsequently, Dattoro’s California attorney advised the district attorney that Dattoro had relied upon the advice of counsel that he was entitled to possession of the seized property.

The deputy district attorney reviewed the evidence gathered in his investigation and decided not to prosecute Dattoro, later stating in a declaration that, “[m]y decision was based upon my belief that there was insufficient evidence to convince a jury beyond a reasonable doubt that Mr. Dattoro acted with the required criminal intent. My decision was not based upon any determination by me or my office that Mr. Dattoro was the rightful owner of the property seized from his residence.”

B. Proceedings for Return of the Seized Property

In January 1997, Dattoro filed a motion to return property seized pursuant to search warrant, under Penal Code sections 1536, 1539, and 1540.1 In his motion, Dattoro did not attack the legality of the search warrant, instead arguing that the property should be returned to him because it was not stolen. Dattoro contended that he, not Ensoniq, owned the trade secrets contained in the seized items pursuant to Pennsylvania intellectual property law.

A hearing was held in superior court on February 6, 1997, with regard to Dattoro’s motion to return seized property. The court requested that Ensoniq and Dattoro brief the issue of whether Ensoniq had standing to contest Dattoro’s motion, and continued the hearing on the motion to a later date.

In its memorandum of points and authorities, Ensoniq argued that it had standing to contest the return of the seized property to Dattoro, because due process required that Ensoniq not be deprived of its intellectual property without notice and an opportunity to be heard on the issue of ownership. Ensoniq also argued that section 1407 et seq. provides that the owner of stolen property in the possession of a magistrate may apply for delivery of the property, and that decisions interpreting these statutes have required that an evidentiary hearing be held whenever ownership is disputed. Ensoniq also argued at length that Ensoniq, not Dattoro, owns the seized property under Pennsylvania intellectual property law.

Dattoro filed points and authorities in opposition, contending that Ensoniq did not have standing to contest his motion for return of seized property, because Ensoniq’s ownership claims should be resolved in the civil forum, and appellate decisions interpreting section 1407 et seq. hold that it is the [1545]*1545People who have the burden of proving that seized property was stolen and should not be returned to the person from whom it was taken.

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65 Cal. App. 4th 1537, 77 Cal. Rptr. 2d 507, 98 Cal. Daily Op. Serv. 6387, 98 Daily Journal DAR 8833, 1998 Cal. App. LEXIS 712, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ensoniq-corp-v-superior-court-calctapp-1998.