Two federal district courts in California recently concluded inevitable disclosure is not the law of this state. ( Globespan, Inc. v. O'Neill (C.D.Cal. 2001) 151 F. Supp.2d 1229, 1235 (order by Baird, J.) ["The Central District of California has considered and rejected the inevitable disclosure doctrine"]; Bayer Corp. v. Roche Molecular Systems, Inc. (N.D.Cal. 1999) 72 F. Supp.2d 1111, 1120 (order by Alsup, J.) ["California trade-secrets law does not recognize the theory of inevitable disclosure"]; but see Note, Intellectual Slavery?: The Doctrine of Inevitable Disclosure of Trade Secrets (1996) 26 Golden Gate U. L.Rev. 717, 719 ["Because California has adopted the [Uniform Trade Secrets Act] and because PepsiCo was a fact intensive analysis, this decision will affect California law"].

The doctrine requires a court to recognize and enforce a de facto noncompetition agreement to which the former employee is bound, even where no express agreement exists. See Bayer Corp. v. Roche Molecular Sys., Inc., 72 F.Supp.2d 1111, 1120 (N.D. Cal. 1999) (“To the extent that the theory of inevitable disclosure creates a de facto covenant not to compete without a nontrivial showing of actual or threatened use or disclosure, it is inconsistent with California law.”)

To state a claim for misappropriation of trade secrets under UTSA, a plaintiff must allege that the defendant (1) "disclose[d] or use[d] the trade secret of another without express or implied consent" and (2) "at the time of the disclosure or use, [the defendant] knew or had reason to know that its knowledge of the trade secret was derived from a person who owed a duty to the entity seeking relief to maintain the trade secret's secrecy or limit its use." Bayer Corp. v. Roche Molecular Sys., Inc., 72 F. Supp. 2d 1111, 1117 (N.D. Cal. 1999) (citing Cal. Civ. Code § 3426.1(b)(2)(B)). "The plaintiff 'should describe the subject matter of the trade secret with sufficient particularity to separate it from matters of general knowledge in the trade or of special knowledge of those persons . . . skilled in the trade.'" Imax Corp. v. Cinema Technologies, Inc., 152 F.3d 1161, 1164-65 (9th Cir. 1998) (quoting Universal Analytics v. MacNeal-Schwendler Corp., 707 F. Supp. 1170, 1177 (C.D. Cal. 1989), aff'd, 914 F.2d 1256 (9th Cir. 1990)).

The "theory of inevitable disclosure" relied on by Plaintiff "creates a de facto covenant not to compete [and] run[s] counter to the strong public policy in California favoring employee mobility." Bayer Corp. v. Roche Molecular Sys., Inc., 72 F. Supp.2d 1111, 1120 (N.D.Cal. 1999). Thus, because Plaintiff's theory of "inevitable disclosure" raises the issue of the existence of a de facto covenant not to compete, Section 16600 and the public policy for which it stands may be applicable to the instant action.

Among other courts, including those interpreting other versions of the Uniform Act, the theory remains the subject of considerable disagreement. Compare Whyte v. Schlage Lock Co., 101 Cal.App. 4th 1443 (Cal.Ct.App. 2002) (rejecting the "inevitable disclosure" doctrine after surveying the cases that have considered the theory), Del Monte Fresh Produce Co. v. Dole Food Co., 148 F. Supp.2d 1326 (S.D. Fla. 2001) (same), Bayer Corp. v. Roche Molecular Systems, Inc., 72 F. Supp.2d 1111 (N.D. Cal. 1999) (same), and EarthWeb, Inc. v. Schlack, 71 F. Supp.2d 299 (S.D.N.Y. 1999) with Strata Marketing, Inc. v. Murphy, 740 N.E.2d 1166 (Ill.App. 2000), Pepsico, Inc. v. Redmond, 54 F.3d 1262 (7th Cir. 1995), Merck Co., Inc. v. Lyon, 941 F. Supp. 1443 (M.D.N.C. 1996), and Uncle B's Bakery, Inc. v. O'Rourke, 920 F. Supp. 1405 (N.D. Iowa 1996); see also Comment, An Overview of Individual States' Application of Inevitable Disclosure: Concrete Doctrine or Equitable Tool?, 55 SMU L. REV. 621 (2002); Babirak at 198-99 (stating that courts do not agree about the application of "inevitable disclosure"). The court in Whyte v. Schlage Lock Co., 101 Cal.App. 4th 1443 (Cal.Ct.App. 2002) recently presented a comprehensive discussion of the theory within the context of California law.

(Bus. Prof. Code, § 16600; Metro Traffic Control, Inc. v. Shadow Traffic Network (1994) 22 Cal.App.4th 853, 859 [ 27 Cal.Rptr.2d 573]; Bayer Corp. v. Roche Molecular Systems, Inc. (N.D.Cal. 1999) 72 F.Supp.2d 1111, 1119-1120.) The doctrine of inevitable disclosure is not the law in California.

The ''inevitable disclosure” doctrine is the idea that “a plaintiff may prove a claim of threatened misappropriation of a trade secret by demonstrating that a former employee's new employment will inevitably lead him to rely on plaintiff's trade secret.” Bayer Corp. v. Roche Molecular Sys., Inc., 72 F.Supp.2d 1111, 1118 (N.D. Cal. 1999). As Cisco concedes, the Bayer court held that “California trade-secrets law does not recognize the theory of inevitable disclosure; indeed, such a rule would run counter to the strong public policy in California favoring employee mobility.

a plaintiff must allege that the defendant (1) "disclose[d] or use[d] the trade secret of another without express or implied consent," and (2) "at the time of the disclosure or use, [the defendant] knew or had reason to know that its knowledge of the trade secret was derived from a person who owed a duty to the entity seeking relief to maintain the trade secret's secrecy or limit its use."Bayer Corp. v. Roche Molecular Sys., Inc., 72 F. Supp. 2d 1111, 1117 (N.D. Cal. 1999) (quoting Cal. Civ. Code § 3426.1(b)(2)(B)). /// Defendant argues that "Plaintiff's allegations of competitive parallels between the Parties, products or business practices, without any supporting facts, amount to nothing more than 'similarities' between the business models of two nearly identical niche-market entities, both which resell excess textiles with the use of inventory processor software."

22 So.2d 232, 234 (Fla. Dist. Ct. App. 1960); Ackerman v. Kimball Int'l, Inc., 634 N.E.2d 778 (Ind. Ct. App. 1994), aff'd, 652 N.E.2d 507 (Ind. 1995); Barilla America, Inc. v. Wright, 2002 WL 31165069, at *9 (S.D. Iowa 2002); La Calhene, Inc. v. Spolyar, 938 F. Supp 523, 531 (W.D. Wisc. 1996) (applying Minnesota law); H & R Block Eastern Tax Servs, Inc. v. Enchura, 122 F. Supp 2d 1067, 1075 (W.D. Mo. 2000); Fluoramics, Inc. v. Trueba, 2005 WL 3455185 (N.J. Super. Ch. 2005); The Estee Lauder Co., Inc. v. Batra, 430 F. Supp. 2d 158 (S.D. N.Y. 2006); Merck & Co. Inc. v. Lyon, 941 F. Supp. 1443, 1460 (M.D. N.C. 1996); Proctor & Gamble Co. v. Stoneham, 747 N.E.2d 268 (Ohio Ct. App. 2000); Bimbo Bakeries USA, Inc. v. Botticella, 613 F.3d 102, 110 (3d Cir. 2010); Rugen v. Interactive Bus. Sys., Inc., 864 S.W.2d 548, 551 (Tex. App. 1993); Novell Inc. v. Timpanogos Research Group Inc., 1998 WL 177721 (D. Utah 1998); Solutee Corp., Inc. v. Agnew, 1997 WL 794496 (Wash. Ct. App. 1997). See, e.g., Bayer Corp. v. Roche Molecular Sys., Inc., 72 F Supp 2d 1111, 1120 (N.D. Cal. 1990); Saturn Sys., Inc. v. Militare, 252 P.3d 516, 626-27 (Colo. App. 2011); Tubular Threading, Inc. v. Scandaliato, 443 So.2d 712, 715 (La. Ct. App. 1983); LeJeune v. Coin Acceptors, Inc., 849 A.2d 451, 471 (Md. 2004); Motion Control Sys., Inc. v. East, 546 S.E.2d 424 (Va. 2001). Oregon has, however, shown a willingness by legislation to reduce the scope and application of noncompetition agreements.

Moreover, while plaintiffs reference a recent decision of the California Superior Court that purportedly finds the City's ban to be unconstitutional under Article I, Section 2(a) of the California Constitution, this decision is currently on appeal and, in any event, “California Superior Court decisions ... are not citable authority.” Bayer Corp. v. Roche Molecular Sys., Inc., 72 F.Supp.2d 1111, 1118 (N.D.Cal.1999). Plaintiffs also request judicial notice of the City's Recommendation Report regarding the City Council's Planning and Land Use Management Committee's proposed ordinance to modify the billboard ban.