Proofpoint, Inc. v. Vade Secure, Incorporated

Opinion

1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE NORTHERN DISTRICT OF CALIFORNIA 7 8 PROOFPOINT, INC., et al., Case No. 19-cv-04238-MMC

9 Plaintiffs, ORDER DENYING DEFENDANTS' MOTION TO PARTIALLY DISMISS 10 v. PLAINTIFFS' COMPLAINT; VACATING HEARING 11 VADE SECURE, INCORPORATED, et al., Re: Dkt. No. 29 12 Defendants.

13 14 Before the Court is defendants Vade Secure, Inc., Vade Secure SASU 15 (collectively, "Vade"), and Olivier Lemarié's ("Lemarié") Motion, filed September 16, 2019, 16 "to Partially Dismiss Plaintiffs' Complaint." Plaintiffs Proofpoint, Inc. ("Proofpoint") and 17 Cloudmark, LLC ("Cloudmark") have filed opposition, to which defendants have replied. 18 Having read and considered the papers filed in support of and in opposition to the motion, 19 the Court deems the matter appropriate for decision on the parties' respective written 20 submissions, VACATES the hearing scheduled for November 8, 2019, and rules as 21 follows. 22 By the instant motion, defendants seek dismissal of one of the five causes of 23 action alleged in plaintiffs' complaint, namely, Count I, which alleges a claim of 24 "Misappropriation of Trade Secrets" under the Defend Trade Secrets Act, 18 U.S.C. 25 § 1836. For the reasons stated below, the motion is hereby DENIED: 26 1. Contrary to defendants' argument, plaintiffs have sufficiently described the 27 alleged trade secrets, specifically, a "combination of technical features in a unified 1 allege, was "designed and developed" by Lemarié while he was employed by Cloudmark. 2 (See Compl. ¶ 32 (listing features comprising claimed combination))1; see, e.g., Keyssa, 3 Inc. v. Essential Products, Inc., 2019 WL 176790, at *2 (N.D. Cal. January 11, 2019) 4 (denying motion to dismiss misappropriation claim, where trade secrets were allegedly 5 obtained under nondisclosure agreement and complaint "describe[d] the categories of 6 trade secret information" obtained, such as "[c]ircuitry and semiconductor architecture, 7 including design files exchanged between the parties with iterative modifications by 8 [plaintiff's] engineers"; finding description of trade secrets was "sufficiently particular to 9 place [d]efendant on notice of what information is at issue"); TMX Funding, Inc. v Impero 10 Technologies, Inc., 2010 WL 2509979, at *3-4 (June 17, 2010) (denying motion to 11 dismiss misappropriation claim, where complaint "alleged nine broad categories of trade 12 secret information" allegedly stolen by former employees, such as "software, source 13 codes, data, formulas, and other technical information developed as proprietary and 14 confidential products and services"; finding allegations sufficiently set forth "boundaries 15 within which the secrets lie"). 16 2. Contrary to defendants' arguments, plaintiffs have sufficiently alleged facts from 17 which misappropriation reasonably can be inferred, specifically, that, after Lemarié 18 "voluntarily terminated his employment with Cloudmark," he began working as the Chief 19 Technology Officer for Vade (see Compl. ¶¶ 5-6), and that Vade thereafter began selling 20 a product that "incorporated" the "techniques and technology developed previously by 21 Lemarié and his team at Cloudmark" (see Compl. ¶ 8; see also Compl. ¶¶ 41-42 22 (describing Vade's competing product)). See Alta Devices, Inc. v. LG Electronics, Inc., 23 343 F. Supp. 3d 868, 883 (N.D. Cal. 2018) (finding allegations of misappropriation 24

25 1The "combination of technical features" is described as follows: (1) "behavioral analysis and machine learning"; (2) "heuristic rules"; (3) "statistical models and scoring"; 26 (4) "real-time, cloud-based threat analysis"; and (5) "easy integration and quick deployment into the popular Microsoft Office 365 architecture in a unique and seamless 27 manner using Office 365 journaling, which avoids making complicated modifications to a 1 sufficient, where plaintiff alleged existence of "similarities" between its product and 2 || defendant's product and set forth "exactly how defendants improperly obtained the 3 || alleged trade secrets"). 4 IT IS SO ORDERED. 5 6 || Dated: November 5, 2019 ; . INE M. CHESNEY 7 United States District Judge 8 9 10 11 12

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