Is the federal DTSA grass always greener?
Sometimes yes!
Most people think that federal actions under DTSA are basically the same as state actions under UTSA, but that’s an oversimplification. Sure, DTSA was based on UTSA, but occasionally we are reminded that there can be meaningful differences between UTSA and DTSA.
Quintara Biosciences sued Ruifeng Biztech and several individuals in Federal court in the Northern District of California, accusing Ruifeng of misappropriating eleven trade secrets. The case was brought under federal DTSA, but not under the California state CUTSA.
Significantly, the California Code of Civil Procedure (section 2019.210) requires the plaintiff to identify the alleged trade secret with reasonable particularity before commencing discovery relating to the trade secret. DTSA, however, does not contain this requirement.
The trial court struck nine of the eleven trade secrets before discovery due to a lack of “reasonable particularity”. Only two remained: a customer profile database and a vendor database. All of the nine trade secrets relating to products and technologies were not allowed to proceed. Discovery proceeded with the two trade secrets, but Quintara chose not to pursue the vendor database claim. The jury returned a verdict for Ruifeng on the single remaining trade secret.
Quintara appealed. The Ninth Circuit found that the district court abused its discretion by applying the state law in striking the trade secrets. The issue of particularity in Federal court should be addressed at summary judgment or at trial, not before commencing discovery.
DTSA does require the plaintiff to identify trade secrets with “sufficient particularity”, but doesn’t set the specific timing.
The dispute is now being remanded back to the district court.
Tangibly’s take:
1.) Procedure Over Substance
This case echoes my law school professor’s mantra of “procedure is everything, substance is nothing”. Even after five years of trial and appeal, the courts still haven’t addressed the technology trade secrets that are central to the dispute between the parties.
2.) Timing Advantages Under Federal DTSA
In California, a trade secret owner has more time to refine and define their trade secrets if they proceed only under DTSA and not either CUTSA alone or CUTSA in combination with DTSA.
3.) Defining Trade Secrets Early
Whether in state court or federal court, the trade secret owner has to define what their trade secrets are. It’s mainly an issue of timing under DTSA or UTSA. Having your trade secrets well-articulated before you even have a theft will save you time and effort later.
4.) Balancing Technology and Business Trade Secrets
Asserting both technology trade secrets and business trade secrets together is a good idea (assuming that both were stolen). While some people dismiss business trade secrets as being “soft” or less sexy than technology trade secrets, Business trade secrets tend to be easier to define and assert when stolen.
Cases like this remind us that timing and clarity matter. If you’re wondering how prepared your company really is, now is the time to take a closer look. Book a meeting with our experts.
Citation is: Quintara Biosciences, Inc. v. Ruifeng Biztech, Inc., — F.4th —-, 2025 WL 2315671, at *3 (9th Cir. Aug. 12, 2025).
Follow Tangibly’s Chief IP Officer, Chris Buntel on LinkedIn.
