Convolve, Inc. v. Compaq Computer Corp.

Trade secrets willingly given to another company without proper protection will not be protected by the courts.

Opinion (O'Malley): Convolve, Inc. ("Convolve") appealed the decision of the District Court granting summary judgment for Compaq Computer Corp. ("Compaq"). Convolve claimed that Compaq misappropriated their trade secrets. The parties had signed a nondisclosure agreement 1998. The Court held that because the trade secrets were disclosed to Compaq with the absence of a written confidentiality memo required by the NDA signed between the two companies, the appropriation of information learned did not constitute a breach of the agreement. Convolve also argued that the trade secrets were violated under the California Uniform Trade Secrets Act ("CUSTA"), which does not require disclosure in writing. However, the court found that under the CUSTA, the trade secrets must have been used or disclosed without the express or implied consent of the moving party. Here, the court found that, because Convolve willingly gave Compaq the information, the CUSTA did not apply. The district court's dismissal of all trade secret claims against Compaq was AFFIRMED.