Pleading Your Case Without Giving Away The Store: Surviving A Motion To Dismiss In Trade Secret Cases

Trade secret plaintiffs routinely face a paradox at the pleading stage: describe your secrets with enough particularity to survive a motion to dismiss, but without revealing the very information you are trying to protect. O9 Solutions Inc. v. SAP SE et al., a recent ruling from the Northern District of Texas, offers useful guidance on how to properly thread that needle.

How the Dispute Began: Employees, Downloads, and a Competitor

O9 Solutions, Inc., an artificial intelligence software company, filed suit in the Northern District of Texas alleging that three former senior employees—the Chief Revenue Officer and two colleagues—left for competitor SAP. The lawsuit alleged that before leaving, those employees downloaded thousands of O9 files containing confidential business information and trade secrets. O9 asserted claims for misappropriation of trade secrets under both the federal Defend Trade Secrets Act (DTSA) and the Texas Uniform Trade Secrets Act (TUTSA), as well as breach of confidentiality and stock option agreements, and tortious interference with contractual relations.

O9’s Complaint Describes the Alleged Secrets With Sufficient Detail

The individual defendants moved to dismiss under Rule 12(b)(6), arguing O9’s Complaint failed to plausibly allege: (i) the trade secrets at issue; and (ii) how each individual defendant allegedly misappropriated them. As experienced trade secret litigators know, these are two of the most common and effective arguments defendants raise at the pleading stage.

The court rejected the challenge. Citing Centennial Bank v. Holmes, 717 F. Supp. 3d 542 (N.D. Tex. 2024), Magistrate Judge David Horan confirmed that a plaintiff need not provide a specific description of the allegedly misappropriated trade secret to survive dismissal. Rather, it is sufficient to claim that at least some aspects of the information at issue constitute a trade secret. Courts in the Fifth Circuit have found allegations adequate where the plaintiff: (1) identifies specific groupings of information containing trade secrets; (2) identifies the types of secrets within those groupings; and (3) explains how the secrets were maintained as confidential.

O9’s complaint did exactly that. The court highlighted that O9 identified eight distinct groupings of trade secrets—including its Digital Brain platform design and architecture, products and solutions roadmap, client-specific capabilities, sales and marketing strategies, customer lists and intelligence, business and partnership proposals, competitive intelligence, and financial information—and pointed to specific documents within each grouping marked “confidential and proprietary.”

O9 also sufficiently pleaded reasonable secrecy measures: NDAs with suppliers and contractors, encryption and password protection, need-to-know access restrictions, and detailed confidentiality obligations in employee agreements requiring the return of company property upon termination.

Plaintiff’s Allegations of Misappropriation Were Adequate at the Pleadings Stage

O9’s misappropriation allegations were also sufficiently detailed. According to the Complaint, one defendant mass downloaded nearly 10,000 files on December 30, 2024—the same day he met the departing CRO for breakfast—and thousands more over the New Year holiday while on paid time off. Another defendant allegedly sent himself a “test” email, then an email with the subject line “Download Spullen” (Dutch for “Download Stuff”), before downloading thousands of O9 trade secret files, creating O9-client-specific folders, and forwarding himself emails containing O9 trade secrets. Shortly after the defendants joined SAP, the former CRO reposted an article on SAP’s behalf announcing that Henkel—a customer both O9 and SAP had competed for—had partnered with SAP to implement the exact kind of AI-assisted solutions O9 had been developing for Henkel.

The Court Declines to Dismiss on the Basis of “Group Pleading” and Forum Non Conveniens

The decision also addresses two issues beyond trade secret identification that practitioners should keep in mind. First, the court rejected SAP’s argument that O9’s group pleading—asserting claims against SAP SE and SAP America collectively—was impermissible. Specifically, Magistrate Judge Horan noted that “Group pleading is not inherently evil” where the complaint gives both entities adequate notice and alleged facts supporting their joint conduct, such as shared recruiting infrastructure.

Second, the court denied the defendants’ forum non conveniens motion to transfer the case to the Netherlands, finding that the defendants had not specifically identified the key witnesses they claimed were located there, nor outlined the substance of their testimony—a failure that proved fatal to the motion.

Key Takeaways for Trade Secret Litigators

• Use the three-part pleading framework. To survive a motion to dismiss, identify your trade secrets by category, provide document-level examples within each category, and describe the specific measures you used to keep the information confidential. That combination—groupings, examples, and security practices—is the operative template in the Northern District of Texas.
• You do not need to reveal the secret to plead it. A plaintiff need not describe the trade secret with exacting particularity; it is enough to show that at least some aspects of the information qualify. The court declined to impose a heightened standard at the Rule 12(b)(6) stage.
• Behavioral evidence of misappropriation is powerful. Unusual mass downloads timed to key events, self-directed “test” emails, suspicious subject lines, and post-departure customer announcements can collectively support a compelling and plausible inference of misappropriation.
• Group pleading against related entities is not automatically fatal. But it requires factual support. Allege specific facts showing the entities acted in concert, such as shared operations, shared recruiting, or coordinated decision-making.
• Forum non conveniens motions require specificity. Vague assertions that witnesses are abroad are not enough. The movant must identify the witnesses by name and describe what they would testify about. Without that, the motion will likely fail.
• This is not yet a final order. The case remains before U.S. District Judge Sam A. Lindsay for final disposition, and the defendants have 14 days to file written objections. Stay tuned.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.