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COA Dismisses TSPA Claim For Indefinite Pleading

By Sean E. Andrussier

Today the Court of Appeals (COA) reiterated that, to plead misappropriation of trade secrets, "a plaintiff must identify a trade secret with sufficient particularity so as to enable a defendant to delineate that which he is accused of misappropriating and a court to determine whether misappropriation has or is threatened to occur." When a trade-secrets complaint does not specifically indentify the alleged trade secrets or describe the acts by which the alleged misappropriation occurs, the complaint fails to state a claim under the Trade Secrets Protection Act (TSPA). The case is Washburn v. Yadkin Valley Bank & Trust Co.

In today's case the claimant, a bank, alleged that defendants "acquired knowledge of [its] business methods; clients, their specific requirements and needs; and other confidential information pertaining to Yadkin's business." The bank further alleged that this "confidential client information and confidential business information" constituted trade secrets as defined by the TSPA and that the bank "believes [they] used its trade secrets on behalf of [a new employer] without [the bank's] permission." The COA held that these allegations "do not identify with sufficient specificity either the trade secrets ... allegedly misappropriated or the acts by which the alleged misappropriations were accomplished." The identification of the trade secrets was "broad and vague," and the bank's allegation that it believes they used its trade secrets was too "general and conclusory." Accordingly, the TSPA claim was properly dismissed.

Full post as published by North Carolina Appellate Blog on May 06, 2008 (boomark / email).