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California's version of Uniform Trade Secrets Act permits injunctive relief

Background: Hospital brought claim against medical group for anticipatory breach of contract, relating to letter of intent giving hospital an option to purchase rural health clinics from medical group. Medical group cross-complained for injunction to protect confidential information it disclosed to hospital during due diligence period. After voluntary reference, the referee found for medical group on hospital's claim and on medical group's cross-complaint. The Superior Court, No. 02CECG02396, Fresno County, M. Bruce Smith, J., granted medical group's motion for injunction. Hospital appealed. Holdings: The Court of Appeal, Dawson, J., held that: (1) a party to a contract does not lose the right to treat an implied repudiation of the contract as an anticipatory breach by failing to seek damages immediately after learning of the events that constitute the implied repudiation; (2) existence of executory covenants that hospital did not perform before treating the purported repudiation, by medical group, of letter of intent as an anticipatory breach of contract, did not bar hospital from pursuing a damages claim based on anticipatory breach; and (3) California's version of Uniform Trade Secrets Act permits injunctive relief to be based on threatened misappropriation of trade secrets. Reversed and remanded.

Full post as published by The Trade Secrets Vault on May 23, 2008 (boomark / email).