Modus, LLC v. Encore Legal Solutions, Inc.
April 2, 2012
Federal District Court for the District of Arizona
Plaintiff Modus, LLC (Modus) hired a number of Defendant Encore Legal Solutions, Inc. (Encore)’s former employees, all of whom had signed a non-compete agreement while working for Encore. Modus brought this action seeking a declaratory judgment invalidating the non-compete agreement, and Encore counterclaimed for, among other things, misappropriation of trade secrets in violation of the Arizona Trade Secrets Act. In response, Modus filed a motion to dismiss, arguing with respect to the trade secrets claim that Encore had failed to identify with particularity what trade secrets had been misappropriated.
In denying the motion to dismiss, the United States District Court for the District of Arizona agreed that a plaintiff must identify the trade secret “with sufficient particularity to separate it from matters of general knowledge in the trade.” The court went on to hold that Encore had been sufficiently particular by pointing to a huge library of software scripts that the former employees had access to. Despite not identifying the exact scripts misappropriated from the library, the court held that Encore had been sufficiently particular to defeat a motion to dismiss.
Encore Legal Solutions, Inc.