CACI 4405 Misappropriation by Acquisition

California Civil Jury Instructions CACI

4405 Misappropriation by Acquisition

[Name of defendant] misappropriated [name of plaintiff]’s trade secret[s] by acquisition if [name of defendant] acquired the trade secret[s] and knew or had reason to know that [he/she/nonbinary pronoun/it/[name of third party]] used improper means to acquire [it/them].

Directions for Use

Read this instruction with CACI No. 4401, Misappropriation of Trade Secrets—Essential Factual Elements, if the plaintiff claims that the defendant’s acquisition of the information alleged to be a trade secret is a misappropriation. Give also CACI No. 4408, Improper Means of Acquiring Trade Secret.

Civil Code section 3426.1(b)(1) defines “misappropriation” as improper “[a]cquisition” of a trade secret, and subsection (b)(2) defines it as improper “[d]isclosure or use” of a trade secret. In some cases, the mere acquisition of a trade secret, as distinguished from a related disclosure or use, will not result in damages and will only be relevant to injunctive relief. Because generally the jury should only be instructed on matters relevant to damage claims, this instruction should not be given unless there is evidence that the acquisition resulted in damages, other than damages from related disclosure or use.

Sources and Authority

“Misappropriation” Defined. Civil Code section 3426.1(b)(1).

“Defendants … obtained these secrets improperly. Their tortious acts resulted from a breach of confidence by [defendant] in copying or stealing plans, designs and other documents related to [plaintiff]’s products which defendants themselves wanted to produce in competition with [plaintiff]. The protection which is extended to trade secrets fundamentally rests upon the theory that they are improperly acquired by a defendant, usually through theft or a breach of confidence.” (Vacco Indus. v. Van Den Berg (1992) 5 Cal.App.4th 34, 50 [6 Cal.Rptr.2d 602].)

“One does not ordinarily ‘acquire’ a thing inadvertently; the term implies conduct directed to that objective. The choice of that term over ‘receive’ suggests that inadvertently coming into possession of a trade secret will not constitute acquisition. Thus one who passively receives a trade secret, but neither discloses nor uses it, would not be guilty of misappropriation. We need not decide the outer limits of acquisition as contemplated by CUTSA, however, for there is no suggestion here of acquisition even in the broadest sense, i.e., that [defendant] ever came into possession of the source code constituting the claimed trade secrets. Indeed [plaintiff] does not directly argue that [defendant] acquired the trade secrets at issue but only that, under the terms of the statute, it could have done so without itself having ‘knowledge’ of them. We doubt the soundness of this suggestion, but assuming it is correct, it remains beside the point unless [defendant] came into possession of the secret. Since there is no basis to find that it did, the mental state required for actionable acquisition appears to be academic.” (Silvaco Data Systems v. Intel Corp. (2010) 184 Cal.App.4th 210, 223 [109 Cal.Rptr.3d 27], internal citations omitted.)

Secondary Sources

3 Levy et al., California Torts, Ch. 40, Fraud and Deceit and Other Business Torts, § 40.53[1][a] (Matthew Bender)
49 California Forms of Pleading and Practice, Ch. 565, Unfair Competition, § 565.103[4][c] (Matthew Bender)
Edelson & Kay, eds., Trade Secret Litigation and Protection in California (State Bar of California 2009) Chs. 2, 6, 12