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Trade Secrets Suit Should Be Dismissed on 'Lack of Particularity,' Says Gage

Vox’s lawsuit alleging Gage Technologies conspired with two of its former employees to steal trade secrets should be dismissed because the plaintiff failed to adequately plead trade secret misappropriation or to identify trade secrets with “sufficient particularity,” said defendants' Tuesday motion (docket 3:22-cv-09135) to dismiss in U.S. District Court for Northern California in San Francisco.

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Additional claims of unfair competition, breach of fiduciary duty, fraudulent concealment, civil conspiracy and tortious/intentional interference should be dismissed because Vox’s claim that Gage, formerly Gage Telecom, violated the California Uniform Trade Secrets Act (CUTSA) preempts its other claims, said the defendants. To state a plausible claim for trade secret misappropriation, under CUTSA, the plaintiff must show existence of a trade secret, misappropriation and that it was harmed or that the defendant was unjustly enriched, with the misappropriation as “a substantial factor,” it said.

In its December complaint (see 2301030008), Vox alleged former employees Kristopher McGreevey and Kevin Frazier formed a plan in September 2021 to exit the company, which would later include a “close-knit group of Vox employees” who exploited Vox resources while on its payroll to secure employment with direct competitor Gage.

The employees helped each other secure employment with Gage, “coordinating the theft and misappropriation of VOX’s confidential and proprietary intellectual property” from its San Francisco headquarters, alleged the complaint. They used the intellectual property to “poach existing VOX clients” for the benefit of Gage, it said. McGreevey and Frazier “discreetly and surreptitiously” solicited existing Vox clients into terminating their Vox relationships and “lured” the clients to Gage, the complaint said.

Gage “knowingly received and capitalized on” Vox’s “stolen and confidential” intellectual property, the complaint said, and Gage aided and abetted in the misappropriation to poach Vox clients. During the months leading up to their exit from Vox, McGreevey and Frazier attempted to cover up evidence of their theft and other misconduct, it alleged.

Vox’s CUTSA claim on a “laundry list” of general categories fails to “separate” the asserted trade secrets from “general knowledge in the trade or of special persons who are skilled in the trade,” said the defendants’ motion to dismiss. Alleged client contacts involve Consumer Cellular, with whom McGreevey and Frazier had a longstanding relationship that predated their work for Vox, the motion said: “Such information is not a trade secret.”