Wixen Music UK Ltd. v. Transparence Entertainment Group, Inc.

• Court: District Court, C.D. California
• Decided: November 30, 2023
• Docket: 2:21-cv-02663
• Status: Unknown

Opinion

1 O 2

8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10

11 WIXEN MUSIC UK LTD., a UK limited Case No.: 2:21-cv-02663-MEMF-MRW corporation, 12 ORDER GRANTING SUMMARY Plaintiff, 13 JUDGMENT PURSUANT TO RULE 56(f) 14 v. 15 T GR RA ON US PP IA NR CE .,N aC CE a lE ifN orT nE iaR cT oA rpI oN rM atiE oN n;T DENNIS DREITH, an individual; SHARI 16 HOFFMAN, an individual; and TANIA OLIVEIRA, NÉE WOODCOCK, an 17 individual; and Does 1 through 10, inclusive, 18 Defendants. 19 20

21 22 Before the Court are the parties’ briefs regarding the Court’s notice of intent to grant 23 summary judgment in favor of Plaintiff on the trade secret status of its client names and contact 24 information pursuant to Federal Rule of Civil Procedure 56(f). ECF Nos. 100, 101. For the reasons 25 stated herein, the Court GRANTS SUMMARY JUDGMENT in finding that Plaintiff’s client names 26 and contact information qualify as protected trade secrets. 27 / / / 28 / / / 1 I. Factual & Procedural Background 2 Plaintiff Wixen Music UK Ltd. (“Wixen”) and Defendant Transparence Entertainment Group 3 Inc. (“TEG”) are companies that administer music copyrights and collect royalties for their clients. 4 Individual Defendants Dennis Dreith and Shari Hoffman founded TEG (collectively, the “TEG 5 Defendants”). This case concerns Wixen’s allegations that Individual Defendant Tania Oliveira 6 (“Oliveira,” and together with the TEG Defendants, (“Defendants”)), a former Wixen employee, 7 conspired with the TEG Defendants to misappropriate Wixen’s trade secrets. 8 On August 3, 2023, Defendants filed a Motion for Summary Judgment on Wixen’s 9 remaining causes of action. ECF No. 77 (“MSJ”). The Court held a hearing on the MSJ on October 10 5, 2023, and issued an order granting the MSJ in part on October 10, 2023. ECF No. 94 (“MSJ 11 Order”). In its MSJ Order, the Court explained that it appeared appropriate to grant summary 12 judgment in favor of Wixen pursuant to Federal Rule of Civil Procedure 56(f) that the names and 13 contact information of Wixen’s clients qualify as protected trade secrets, and gave the parties and 14 opportunity to respond in writing. MSJ Order at 16–17. The parties filed responsive briefing on this 15 issue on November 8, 2023. ECF Nos. 100 (“Wixen Brief”), 101 (“TEG Brief”). 16 II. Applicable Law 17 Under Federal Rule of Civil Procedure 56(f), a district court may sua sponte grant summary 18 judgment if the parties have “notice and a reasonable time to respond.” Fed. R. Civ. P. 56(f); KST 19 Data, Inc. v. DXC Technology Company, 980 F.3d 709, 714 (9th Cir. 2020). Specifically, the court 20 may “(1) grant summary judgment for a nonmovant; (2) grant the motion on grounds not raised by a 21 party; or (3) consider summary judgment on its own after identifying for the parties material facts 22 that may not be genuinely in dispute.” Fed. R. Civ. P. 56(f). “Sua sponte grants of summary 23 judgment are only appropriate if the losing party has ‘reasonable notice that the sufficiency of his or 24 her claim will be in issue.’” Greene v. Solano Cnty. Jail, 513 F.3d 982, 990 (9th Cir. 2008) (quoting 25 Buckingham v. United States, 998 F.2d 735, 742 (9th Cir. 1993)). 26 / / / 27 / / / 28 / / / 1 III. Findings of Fact 2 The Court made detailed findings of fact in its Order on the Motion for Summary Judgment. 3 See MSJ Order at 7–14. The Court will not repeat those findings here. No further findings of fact 4 are necessary for this Order, and neither party requested any further findings of fact. 5 IV. Discussion 6 In the MSJ, Defendants moved on the five categories of trade secrets that Wixen had 7 identified as being protected trade secrets. These five categories of trade secrets underlie all three of 8 Wixen’s remaining causes of action—trade secret misappropriation under federal law, trade secret 9 misappropriation under state law, and conspiracy to misappropriate. The only relevant category of 10 trade secrets to the current Order is the category regarding the names and contact information of 11 Wixen’s clients and potential clients (“First Alleged Trade Secret”). To claim misappropriation, a 12 plaintiff must prove that (1) it possessed a trade secret, (2) that the defendant misappropriated it, and 13 (3) that the misappropriation caused damage. InteliClear, LLC v. ETC Glob. Holdings, Inc., 978 F.3d 14 653, 657–58 (9th Cir. 2020). In the MSJ Order, the Court stated that it was inclined to find that, 15 based on the undisputed facts, the First Alleged Trade Secret satisfied this first element because it 16 was something that had been specifically identified, has been reasonably protected by Wixen, and 17 derives economic value from not being generally known. MSJ Order at 16.1 Defendants argued as 18 part of the MSJ that Wixen did not maintain a “specific, segregated list,” but the Court noted that 19 Wixen had submitted as an exhibit a specific client list. MSJ Order at n.14; ECF No. 86-4 (“Wixen 20 Decl.”) at 17-27 (“Client List”). 21 In the TEG Brief, Defendants seek clarification on whether the First Alleged Trade Secret is 22 the Client List specifically as it has been presented in the exhibit, or whether the First Alleged Trade 23

24 1 To prove ownership of a trade secret, a plaintiff “must identify the trade secrets and carry the burden of 25 showing that they exist.” MAI Sys. Corp. v. Peak Comput., Inc., 991 F.2d 511, 522 (9th Cir. 1993). “The plaintiff ‘should describe the subject matter of the trade secret with sufficient particularity to separate it from 26 matters of general knowledge in the trade or of special knowledge of those persons . . . skilled in the trade.’” Imax Corp. v. Cinema Techs., Inc., 152 F.3d 1161, 1164 (9th Cir. 1998). Moreover, trade secrets are only 27 subject to protection if (1) the owner has taken reasonable measures to keep such information secret, and (2) the information derives independent economic value from not being generally known. 18 U.S.C. § 1839(3); 28 | | Secret encompasses Wixen’s electronic database as a whole. TEG Brief at 4. However, Defendants 2 | appear to conflate the first two elements of misappropriation—whether something can be and is 3 | protected, which is distinct from what was actually misappropriated. The Court is making no finding 4 | on what was misappropriated, if anything. The Court is merely making a finding that the client 5 | information that Wixen possessed, in whatever form it may be, qualifies as a protected trade secret. 6 | Inthe TEG Brief, Defendants make no further arguments as to whether Wixen has taken reasonable 7 | measures to keep its client names and contact information secret, and whether such information 8 | derives economic value from not being generally known. The Court further finds that Wixen has met 9 || its burden in showing that it does maintain a database with client names and information, and this is 10 | sufficiently identified to be a trade secret. Therefore, the Court finds it appropriate to grant summary 11 | judgment that Wixen has met the first element of misappropriation specifically as to the First 12 | Alleged Trade Secret, in that it possessed information that qualifies as a trade secret. 13 V. Conclusion 14 For the reasons stated herein, the Court hereby GRANTS summary judgment to Wixen and 15 | finds that its client names and contact information qualify as protected trade secrets. 16 17 | ITIS SO ORDERED. 18 19 Dated: November 30, 2023 20 MAAME EWUSI-MENSAH FRIMPONG 21 United States District Judge 22 23 24 25 26 27 28