California Civil Jury Instructions (CACI) (2017)

4405. Misappropriation by Acquisition

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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/it/[name of third party]] used
improper means to acquire [it/them].
New December 2007
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