An interesting case up north between Space Data Corporation and X, Google’s skunkworks division.

Space Data demoed its cool near-space balloon-constellation tech to Google. But before doing so, Space Data made Google sign a non-disclosure agreement. Smart move.

Except the NDA had a hole. It allowed Google to “use Residuals for any purpose . . . .” And “residuals” were defined to mean “information that is retained in the unaided memories of Google’s employees or Representatives who had had access to Confidential Information pursuant to the terms of the [NDA].” So under the NDA, any trade secret shown to some Googler with a keen memory or memory palace can be used by Google if the Googler remembers it.

Now, Space Data’s sued Google over the latter’s balloon tech, which allegedly misappropriates Space Data’s trade secrets and infringes its patents. The NDA’s stalled part of that suit. The court recognized that the NDA allows Google to use its reps’ memories of Space Data’s confidential information. Given that, Space Data must allege that Google’s use of trade secrets was prohibited — that it was not a permissible use of Google’ recolletions. Space Data’s trade secret counts didn’t allege this, so the court dismissed them.

One more interesting note about Space Data. California has a law (CCP § 2019.210) saying that, before discovery can begin, the company claiming its trade secrets were stolen must first identify those trade secrets with reasonable particularity. Whether and how that state law applies in federal court is open to debate. Space Data comes down on the side that the law doesn’t apply to a motion to dismiss. Yet there wasn’t any argument on that point. So future defendants can cast aside Space Data as dicta.

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A final point unrelated to trade secrets. Rarely do complaints cite writers, let alone in paragraph 1. And down here in the Central District of California, we’re supposed to limit that paragraph to jurisdictional allegations. But our Hosie Rice friends up north live a freer life. And they can begin their complaint however they damn well want. So, enter DFW into para. 1:

1. The internet has changed how we live. In urban areas, we are online all the time: constantly checking where to eat, meet, buy gas, the new political news, the President’s latest tweet, and so on. Life without internet access would be unworkable, unthinkable. The web has become the water we swim in, as ubiquitous and critical as oxygen. Cf. David Foster Wallace “This is Water” Address (see https://web.ics.purdue.edu/~drkelly/DFWKenyonAddress2005.pdf).