On August 12, 2025, the US Court of Appeals for the Ninth Circuit issued a pivotal ruling in Quintara Biosciences, Inc. v. Ruifeng Biztech, Inc. that significantly alters the landscape of federal trade secret litigation. The court held that the Defend Trade Secrets Act (DTSA) does not require a plaintiff to identify allegedly misappropriated trade secrets with “reasonable particularity” at the outset of a case. This decision establishes a clear distinction between the DTSA and the California Uniform Trade Secrets Act (CUTSA), the latter of which mandates pre-discovery identification.
The ruling shifts the burden of defining trade secrets from the pleading stage to later phases of litigation, such as summary judgment or trial. While this represents a significant win for plaintiffs by lowering the barrier to entry for federal claims, it introduces substantial complexities for defendants, including increased discovery costs and the risk of “shifting sands” litigation where trade secrets are defined based on information uncovered during discovery. Consequently, the decision necessitates more active judicial management through protective orders and phased discovery to prevent potential abuse.
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Case Background and Procedural History
The dispute originated between two California-based DNA sequencing companies, Quintara Biosciences and Ruifeng Biztech, following a breakdown in their business relationship. Quintara filed a complaint in the Northern District of California, asserting a DTSA claim and alleging the misappropriation of various trade secrets, including:
- Customer and vendor databases
- Marketing plans
- Software code
- Proprietary technologies and product designs
The District Court’s Approach
During the discovery phase, the district court applied the discovery rules set forth in CUTSA (specifically Section 2019.210), requiring Quintara to summarize its trade secrets with “reasonable particularity” before proceeding. The court demanded precise elements for each secret, similar to patent claims, to define the bounds of discovery and provide the defendant with notice.
When Quintara’s disclosures failed to meet these standards, the district court granted the defendant’s motion to strike under Federal Rule of Civil Procedure 12(f), effectively dismissing nine of the 11 alleged trade secrets as a discovery sanction.
The Ninth Circuit Reversal
The Ninth Circuit concluded that the district court abused its discretion. The appellate court emphasized that the DTSA does not contain the specific timing or scope requirements for trade secret identification found in CUTSA. Furthermore, it ruled that striking these claims under Rule 12(f) or as a discovery sanction under Rule 16 was inappropriate, as dismissal is a harsh penalty reserved only for “extreme circumstances.”
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Central Legal Themes and Findings
1. Pleading vs. Fact-Finding
The Ninth Circuit clarified that whether a trade secret is sufficiently particularized is usually a matter of fact to be decided at summary judgment or trial, rather than a prerequisite for discovery. The court categorized trade secret identification as both a procedural notice issue and a substantive element of the claim that must eventually meet statutory definitions.
2. The Iterative Discovery Process
The court embraced an “iterative” view of discovery, aligning with recommendations from the Sedona Conference and the Federal Judicial Center. This perspective holds that:
- Identification is a procedural tool for case management, not an adjudication of merits.
- Discovery itself can and should lead to more particularized identifications as the case progresses.
- The identification of a secret during a lawsuit is not a substitute for the eventual merits-based determination.
3. Procedural Limitations
The ruling established that Federal Rules of Civil Procedure 12(f) (motion to strike) and Rule 16 (pretrial conferences/management) are not proper vehicles for the early dismissal of DTSA claims based on a lack of particularity.
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Comparative Analysis: DTSA vs. CUTSA
The Quintara decision highlights a critical divergence between federal and California state law regarding trade secret litigation.
| Feature | Defend Trade Secrets Act (DTSA) | California Uniform Trade Secrets Act (CUTSA) |
| Identification Requirement | No “reasonable particularity” required at the outset. | Mandatory identification with “reasonable particularity” prior to discovery. |
| Timing of Specification | Usually determined at summary judgment or trial. | Prerequisite for initiating the discovery process. |
| Legal Basis | Federal law; procedural and substantive fact-finding. | California Code of Civil Procedure Section 2019.210. |
| Judicial Philosophy | Flexible, iterative, discovery-driven process. | Rigid pre-discovery boundary setting to prevent “shifting sands.” |
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Strategic Implications for Litigants
For Plaintiffs
- Increased Accessibility: Plaintiffs are more likely to pursue DTSA claims in federal court to avoid the stringent pre-discovery particularity requirements of CUTSA.
- Discovery Advantages: Plaintiffs can initiate litigation with broader, more ambiguous descriptions, obtaining the benefits of discovery before precisely defining their claims.
- Reduced Dismissal Risk: The threat of early-stage dismissal for lack of specificity is significantly diminished.
For Defendants
- Escalating Costs: Defendants may be forced deeper into discovery without a clear understanding of the scope of the claims against them.
- “Shifting Sands” Risk: Plaintiffs may attempt to define their trade secrets based on what they find in the defendant’s files during discovery—a tactic described as “drawing the bullseye around the arrow.”
- Strategic Countermeasures: Defendants must use contention interrogatories and expert witnesses early to force plaintiffs to define their secrets with enough specificity to distinguish them from general industry knowledge.
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Evolving Judicial Management and Open Questions
Recommendations for Judicial Oversight
The Ninth Circuit suggested that courts manage the “delicate problem” of trade secret disclosure through active case management rather than dismissal:
- Protective Orders: Implementing early-stage orders to control the flow of sensitive information.
- Phased Discovery: Limiting initial discovery to the identification of trade secrets before allowing broader discovery into misappropriation.
- Iterative Refinement: Encouraging a process where the scope of the case is narrowed through successive stages of the litigation.
Remaining Legal Ambiguities
The Quintara decision leaves several questions unresolved for future litigation:
- Mixed Claims: It remains unclear if CUTSA’s particularity requirements are binding in federal court when a plaintiff asserts both DTSA and CUTSA claims.
- Standards of Precision: The court did not articulate a specific standard for how precisely a plaintiff must define a secret to survive summary judgment or trial.
- Dispositive Remedies: There is no clear guidance on when a defendant might seek a dispositive pretrial remedy for poorly identified trade secrets if discovery motions fail to provide clarity.
What does this mean? Get that TRO or preliminary injunction!
David Seidman is the principal and founder of Seidman Law Group, LLC. He serves as outside general counsel for companies, which requires him to consider a diverse range of corporate, dispute resolution and avoidance, contract drafting and negotiation, and other issues. In particular, he has a significant amount of experience in hospitality law by representing third party management companies, owners, and developers.
He can be reached at david@seidmanlawgroup.com or 312-399-7390.
This blog post is not legal advice. Please consult an experienced attorney to assist with your legal issues.
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