F.

Miller

1 ROBERTS. SHWARTS (STATE BAR NO. 196803) Electronically Filed

[email protected] by Superior Court of CA,
2 MICHAEL D. WEIL (STATE BAR NO. 209056) County of Santa Clara,
[email protected] on 7/9/2019 12:03 AM
3 SPENCER H. WAN (STATE BAR NO. 304329) Reviewed By: F. Miller
[email protected] Case #19CV345966
4 MARIAN. SOKOVA (STATE BAR NO. 323627)
[email protected] Envelope: 3100639
5 ORRICK, HERRINGTON & SUTCLIFFE LLP
The Orrick Building
6 405 Howard Street
San Francisco, CA 94105-2669
7 Telephone: +1 415-773-5700
Facsimile: + 1 415-773-5759
8
Attorneys for Defendant
9 FISKERINC.
10 SUPERIOR COURT OF THE STATE OF CALIFORNIA
11 COUNTY OF SANTA CLARA
12 QUANTUMSCAPE CORPORATION, a Case No. 19-CV-345966
Delaware company,
13 FISKER INC.'S OPPOSITION TO
ENTRY OF PRELIMINARY
14 Plaintiff, INJUNCTION
15 V. Date: July 25, 2019
Time: 9:00 a.m.
16 FISKER INC., a Delaware company, DONG Judge: Hon. Helen E. Williams
HEE "ANNA" CHOI, an individual resident of Dept.: IO
17 California, FABIO ALBANO, an individual
resident of California, and DOES 1-10, [PUBLIC-REDACTS MATERIALS
18 inclusive, FROM CONDITIONALLY SEALED
RECORDS]]]
19 Defendant.
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FISKER'S OPPOSITION TO ENTRY OF PRELIMINARY INJUNCTION

Case No. 19-CV-345966
 1 TABLE OF CONTENTS

2 Page

3 I. INTRODUCTION .............................................................................................................. 1
II. STATEMENT OF FACTS ................................. ... ............................................................. 2
4
A. Recruitment and Hiring of Choi .............................................................................. 2
5 Choi's Employment at Fisker ................................................................................. 4
B.
6 C. Fisker's Quarantine Efforts ..................................................................................... 5
III. ARGUMENT ...................................................................................................................... 6
7
A. QuantumScape's Claimed Trade Secrets are Not Trade Secrets ............................ 7
8 QuantumScape's Alleged Trade Secrets Are Generally Known Or
1.
In Public Literature ..................................................................................... 7
9
1. QuantumScape's 2019.210 Disclosure ........................................... 8
10
2. QuantumScape's Supplemental Declaration of Timothy
Holme ...... .............................................. .......................................... 9
11
11. The Processes Claimed by QuantumScape as Trade Secrets Are
12 Covered in Fisker's Patents ....................................................................... 11
111. Equipment listed in Choi's Emails are not Secrets ................................... 12
13
B. QuantumScape Did Not Take Reasonable Steps to Protect the Secrecy of
14 its Alleged Trade Secrets .................................................................. .................... 13
C. QuantumScape Has Not and Will Not Suffer Any Harm ..................................... 14
15
IV. CONCLUSION ....................................................................... .......................................... 15
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 1 TABLE OF AUTHORITIES

2 Page(s)
3 Cases
4
Abba Rubber Co. v. Seaquist,
5 235 Cal. App. 3d 1 (1991) ........................................................................................................... 7

6 Advanced Modular Sputtering, Inc. v. Superior Court,

132 Cal.App.4th 826 (2005) ........................................................................................................ 7
7
Aetna Bldg. Maintenance Co., 39 Cal. 2d 198 (1952) .................................................................... 12
8
Agency Solutions. Com, LLC v. TriZetto Grp., Inc.,
9 819 F. Supp. 2d 1001 (E.D. Cal. 2011) ....................................................................................... 8
10
AMN Healthcare, Inc. v. Aya Healthcare Servs., Inc.,
11 28 Cal. App. 5th 923 (2018) .............................................................................................. 6, 7, 14

12 DVD Copy Control Assn., Inc. v. Bunner,

116 Cal. App. 4th 241 (2004) .................................................................................................... 13
13
New Life Scis., LLC v. Weinstock,
14 197 Cal. App. 4th 676 (2011 ) ...................................................................................................... 6
15 In re Providian Credit Card Cases,
16 96 Cal. App. 4th 292 (2002) .............................................................................................. 6, 7, 13

17 San Jose Constr., Inc. v. SB.CC, Inc.,

155 Cal. App. 4th 1528 (2007) .................................................................................................. l 3
18
Thompson v. lmpaxx, Inc.,
19 113 Cal. App. 4th 1425 (2003) .................................................................................................... 7
20 TMC Aerospace, Inc. v. Elbit Sys. ofAm. LLC,
No. CV 15-07595-AB (EX), 2016 WL 3475322 (C.D. Cal. Jan. 29, 2016) ............................... 8
21

22 West v. Lind,
186 Cal. App. 2d 563 (1960) ....................................................................................................... 6
23
Whyte v. Sch/age Lock Co.,
24 101 Cal. App. 4th 1443 (2002) .................................................................................................... 7

25 Statutes
26 C.C.P. § 2019.210 ............................................................................................................................. 7
27
C.C.P. § 2025.230 ...................................................................................... ....................................... 3
28
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 1 Cal. Civ. Code§ 3426.1(4)(a) ........................................................................................................... 7

2 Cal. Civ. Code§ 3426.l(d)(2) ........................................................................................................... 6

3 Cal. Civ. Code§ 3426.3(a) ............................................................................................................. 15
4

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 I. INTRODUCTION

2 QuantumScape Corporation ("QuantumScape") seeks an injunction preventing Fisker Inc.

3 ("Fisker") from using its trade secrets relating to solid-state electrolyte battery technology. 1 The

4 Court should deny the application because QuantumScape's alleged trade secrets are not trade

5 secrets at all, both because the "trade secrets" cover information generally known and in public

6 literature, and because QuantumScape utterly failed to reasonably protect the secrecy of its "trade

7 secrets". Moreover, Quantum Scape had not and will not suffer any harm because Fisker has not

8 used (and is not using) QuantumScape non-public information, trade secret or otherwise.

9 QuantumScape (and to some extent Fisker) operate in a very crowded and competitive

IO field. Indeed, there are many researchers, scientists, and companies seeking to develop solid-state

11 electrolyte batteries, and as a result, numerous articles and patents have been published covering

12 the area. In fact, Fisker owns its own patents in this space. By its claims, QuantumScape is

13 improperly trying to prevent Fisker from pursuing appropriate and necessary research by broadly

14 claiming public materials and processes as trade secrets.

15 Further, this action arises from QuantumScape's insufficient and ineffective measures to

16 protect what it claims to be highly valuable trade secrets and its "secret sauce." QuantumScape

17 allowed a low-level technician, defendant Dong Hee "Anna" Choi ("Choi"), unfettered and

18 unmonitored access to its networks. When Choi resigned from Quantum Scape for a job at Fisker,

19 she was able to unilaterally download numerous QuantumScape files onto external drives for her

20 own use. QuantumScape also allowed her to have a phone in its lab which Choi used to take

21 pictures of QuantumScape equipment. Choi did not need to circumvent any security measures or

22 exit processes to obtain and depart with this supposedly vital information, all without

23 QuantumScape's knowledge. And QuantumScape took no steps to determine if Choi left with

24 any inappropriate material. It was only by chance (because Choi referenced a QuantumScape

25 item number on a call with a third-party supplier) did QuantumScape learn of Choi's activity.

26
1
The only relief requested in QuantumScape's Application is a preliminary injunction (a) enjoining Defendants
27 "from using any QuantumScape trade secrets and other confidential information that Choi unlawfully obtained"; and
(b) requiring Defendants to return QuantumScape trade secrets and not to use any such material not in tangible form
28 and capable of return.
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 Regardless, and despite Choi's unilateral actions, Fisker never wanted any QuantumScape

2 confidential information, and it has not used any QuantumScape non-public information.

3 Nonetheless, Fisker has quarantined all work and materials related to Choi's work at Fisker.

4 QuantumScape has not and will not suffer any harm from Choi's actions.

5 In order for QuantumScape to obtain preliminary injunctive relief, it must show a

6 likelihood of success on the merits and interim harm from the non-issuance of an injunction.

7 QuantumScape cannot meet that burden - its application for a preliminary injunction should be

8 denied.

9 II. STATEMENT OF FACTS

10 Founded in September 2016, Fisker is an eMobility and technology company which

11 designs and develops electric vehicles, and related electrification technologies such as future

12 battery technology. Declaration ofGeeta Gupta ("Gupta Deel.") ~4. As part of its research and

13 development, Fisker acquired patents covering solid-state electrolyte batteries. Id. at ~5. -

14

15

16 A. Recruitment and Hiring of Choi

17

18

19

20

21

22

23 Supplemental Declaration of David S. Elkins ("Supp. Elkins Deel."), Ex. 3. On-site, Choi met

24 with a few Fisker employees including Dr. Gupta, Dr. Fabio Albano ("Albano"), and Martin

25 Welch. Gupta Decl. ~7. During the technical portion of the interview, Choi interviewed

26 primarily with Albano. Id. When Albano asked to make her presentation, Choi had technical

27
28
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Case No. l 9-CV-345966
 difficulties with her own laptop, so she transferred the presentation to Albano. Fisker Depo. 2

2 116:23-117:5. Albano then displayed the powerpoint from his laptop. Id.

3 After the interviews, Fisker asked Choi to provide references. Gupta Deel. ~8; Choi Depo.

4 45: 10-21. Choi promptly provided three references, one of whom was her manager at

5 QuantumScape. Gupta Decl. ~8. Fisker reached out to Choi's references and was able to contact

6 two who offered positive comments. Id. Notably, Choi's QuantumScape manager provided

7 Fisker a very positive recommendation for her candidacy at Fisker. Id.; Wan Deel., Exs. A-8.

8 Since Choi's job at Fisker would involve using and maintaining the lab equipment

9 necessary for her duties, Fisker's director of purchasing, Matt Riley, emailed Choi for her vendor

10 preferences and recommendations for a Fisker Depo. 141 :12-142:6;

11 Supp. Elkins Deel. Ex. 6; Gupta Deel. ~l 0. The next day, Choi responded to Riley and listed out

12 four pieces of equipment she would prefer to use. Supp. Elkins Deel. Ex. 7. She also attached

13 photos of equipment (possibly from QuantumScape's lab),

15 what equipment QuantumScape used or to provide Id.

16 On December 2, 2018, Fisker made an offer of employment and sent Choi an offer letter.

17 Gupta Deel. ~12, Supp. Elkins Deel. Ex 10. Choi accepted and signed the next day. Id. After

18 some back and forth, Choi and Fisker agreed to a start date at the beginning of January. Gupta

19 Decl. ~13. Choi did not inform Dr. Gupta that she was going to be remain employed at

20 QuantumScape through December. Id.

21 On December 3, 2018, Albano emailed Choi asking her whether specific equipment fit

22 with her recommendations. Supp. Elkins Deel. Ex. 12. Riley then followed with an email -

23 Id. Again; despite Fisker never asking for QuantumScape

24 information, Choi responded to the email attaching a

25 - Supp. Elkins Deel. Ex. 13. Then on December 5, 2018, again without Fisker asking,

26 Choi provided a

27
2
"Fisker Depo" refers to the deposition ofFisker Inc. taken by plaintiff pursuant to C.C.P. Section 2025.230. Dr.
28 Gupta served as Fisker's witness at the deposition.
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 Supp. Elkins Deel. Ex. 15. Most, if not all, of the items recommended by

2 Choi were items Fisker had considered and for some, even obtained quotes for, before Choi was

3 interviewed. Gupta Decl.111. More important, Fisker did not purchase most of the equipment

4 given by Choi. Id.

5 Fisker and Choi made arrangements for Choi to visit Fisker's office again on December

6 13-14, 2018. Id. at 114. The purpose of the visit was for Choi to meet employees, attend Fisker's

7 holiday lunch, and look for housing. Id. While she was at Fisker's office on these dates, Choi

8 was invited to join battery team meetings. Id. Unbeknownst to Fisker, Choi brought her

9 QuantumScape computer and apparently accessed QuantumScape's networks while she was at

10 Fisker's office. Id. at 115; Choi Depa. 64:2-8. QuantumScap~ was apparently unaware of Cho i's

11 activity until March 2019.

12 B. Choi's Employment at Fisker

13

14

15

16

17 Choi started her job at Fisker on January 2, 2019, ultimately reporting to Albano. Gupta

18 Decl.116. At Fisker, Cho i's job responsibilities included working on the

19

20

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22

23

24

25 As part of the sintering process, setters are often used to optimally arrange ceramic pieces

26 in a kiln or furnace. Id. at 110. Setters are widely used in ceramic processing and are plates used

27 to stack ceramic pieces during firing. Id. Setters can come in many forms and can be made of

28 -different types of materials. I

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 2
3

5
6

IO Fisker terminated Choi's employment on April 26, 2019. Gupta Decl.118. Albano

11 resigned from Fisker on May 24, 2019. Id. at 119.

12 C. Fisker's Quarantine Efforts

13 Since the inception of this lawsuit and learning of Choi's conduct, Fisker has taken the

14 steps to purge all of Choi's work product from Fisker's research to ensure that no QuantumScape

15 information, proprietary or otherwise, is used in Fisker's research. Choi and Albano's laptops

16 and lab notebooks have been placed in a locked box in a locked room. Renna Decl.116(b).

17 Fisker is using to

18 identify and quarantine all relevant documents, experiment results, materials and methods used in

19 creation of slurries, hardware or materials proposed by Choi, or any other work product by Choi. 3

20 Id. at 116(a). All slurries made by Choi and components that used these slurries have been
21 quarantined. Id. at 1 I 6(h). All materials and chemicals that were requested by or purchased for

22 Choi have also been quarantined. Id. at 116(c). Cells (batteries) made by Fisker during Choi's

23 employment have been quarantined. Id. at116(i). Equipment, including a ball mill specified by

24 Choi and a furnace whose requisition was initiated by Choi have been quarantined. Id. at 116(g).

25 3
Because of the temporary restraining order ordered by the Court and its litigation preservation obligations, Fisker
has not been allowed to destroy or delete quarantined items and material. Fisker has locked away all physical items
26 and all quarantined equipment has been decommissioned from use. Components that cannot be put in a locked
cabinet have been put in secondary containment in the lab and labelled "Quarantine." Quarantined digital files have
27 been migrated to a separate directory with restricted access. To be clear, regardless of the Court's ruling on the
present application, and with the Court's permission, Fisker is prepared to return and/or destroy all of the Choi-
28 related material.
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Case No. 19-CV-345966
 Experimental observation data sheets made and used by Choi that were located locally on a lab

2 machine were migrated to a quarantine directory. Id. at~! 6(f). Work instructions written by Choi

3 have also been quarantined. Id. at ~16(k).

4 Fisker's entire battery team quarantined their existing lab notebooks and started new lab

5 notebooks. Id. at ~16(d). Fisker's current LLZO solid-state electrolyte recipe was developed

6 around May 20 I 8 prior to Choi's arrival at Fisker. Id. at ~l 6(m). This recipe was further

7 developed and initiated after Choi's departure from Fisker and was developed independently from

8 Choi. Id. Fisker now switched to using solvents that Choi did not use in her formulations. Id. at

9 ~8. All previous sintering profiles have been removed and replaced with new and different

10 sintering profiles that have been independently developed by a new employee that had no

11 previous exposure to Choi's work. Id. at~9. All work instructions and recipes for current

12 processes have been reviewed to ensure that Choi had not contributed to them. Id. at ~16(1).

13 III. ARGUMENT

14 QuantumScape cannot establish that it is likely to succeed on the merits of its claims,

15 thus the Court should not grant a preliminary injunction. Preliminary injunctive relief is an

16 extraordinary remedy that should be applied only when it is clear that sufficient cause for hasty

17 action exists. West v. Lind, 186 Cal. App. 2d 563, 565 (1960). "In deciding whether to issue a

18 preliminary injunction, a court must weigh two 'interrelated' factors: (I) the likelihood that the

19 moving party will ultimately prevail on the merits and (2) the relative interim harm to the

20 parties from issuance or nonissuance of the injunction." New Life Scis., LLC v. Weinstock, 197

21 Cal. App. 4th 676,686(2011).

22 A trade secret misappropriation claim "requires a plaintiff to show the plaintiff owned

23 the trade secret; at the time of misappropriation, the information was a trade secret; the

24 defendant improperly acquired, used, or disclosed the trade secret; the plaintiff was harmed;

25 and the defendant's acquisition, use, or disclosure of the trade secret was a substantial factor in

26 causing the plaintiff harm." AMN Healthcare, Inc. v. Aya Healthcare Servs., Inc., 28 Cal. App.

27 5th 923, 942 (2018). A plaintiff must make reasonable efforts to maintain the secrecy of the

28 information. Cal. Civ. Code § 3426.1 (d)(2); In re Providian Credit Card Cases, 96 Cal. App.
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FISKER'S OPPOSITION TO ENTRY OF PRELIMINARY INJUNCTION
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 4th 292, 306 (2002) (information claimed as a trade secret "must have been protected by

2 'efforts that are reasonable under the circumstances to maintain its secrecy"'). QuantumScape's

3 claim will fail because, at minimum, its alleged trade secrets are not trade secrets, it has failed

4 to protect the secrecy of its information, and it has not suffered any harm from Fisker. 4

5 A. QuantumScape's Claimed Trade Secrets are Not Trade Secrets

6 For each of its alleged trade secrets, QuantumScape must establish that the matter sought

7 to be protected is information (I) that derives independent economic value from not being

8 generally known to the public; and (2) that is subject to reasonable efforts to keep secret. Cal.

9 Civ. Code§ 3426.1(4)(a); Whyte v. Schlage Lock Co., 101 Cal. App. 4th 1443, 1454 (2002)

10 (citing Abba Rubber Co. v. Seaquist, 235 Cal. App. 3d 1, 18 (1991)). Simply labeling

11 information as a trade secret or as confidential information does not make it a trade secret. See

12 Thompson v. lmpaxx, Inc., 113 Cal. App. 4th 1425 (2003). Further, under C.C.P. section

13 2019.210, a plaintiff must "identify or designate the trade secrets at issue with 'sufficient

14 particularity' ... by distinguishing the trade secrets 'from matters of general knowledge in the

15 trade or of special knowledge of those persons ... skilled in the trade."' Advanced Modular

16 Sputtering, Inc. v. Superior Court, 132 Cal.App.4th 826, 835 (2005). QuantumScape cannot

17 make the required showing.

18 i. QuantumScape's Alleged Trade Secrets Are Generally Known Or In

Public Literature.
19
Failing the most basic test, QuantumScape's claimed trade secrets are generally known,
20
in the public domain (through articles and patents), or are processes already conducted by
21
Fisker. To qualify as a trade secret, the information "must be secret, and must not be of public
22
knowledge or of a general knowledge in the trade or business." AMN Healthcare, 28 Cal. App.
23
5th at 943. "Public disclosure, that is the absence of secrecy, is fatal to the existence of a trade
24
secret." In re Providian Credit Card Cases, 96 Cal. App. 4th 292, 304 (2002). As one example,
25
it is well-established that "disclosure of a trade secret in a patent places the information
26

27
4
Fisker does not concede that it committed any act of misappropriation under the CUTSA. For purposes of the
28 present application, in light of Choi's conduct, Fisker is addressing QuantumScape's other failures to meet its burden.
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FISKER'S OPPOSITION TO ENTRY OF PRELIMINARY INJUNCTION
Case No. 19-CV-345966
 comprising the secret into the public domain." TMC Aerospace, Inc. v. Elbit Sys. ofAm. LLC,

2 No. CV 15-07595-AB (EX), 2016 WL 3475322, at *4 (C.D. Cal. Jan. 29, 2016); Agency

3 Solutions. Com, LLC v. TriZetto Grp., Inc., 819 F. Supp. 2d 1001 (E.D. Cal. 2011) ("Proprietary

4 ways of doing the same thing that others in the same field do are not trade secrets").

5 1. Quantum Scape's 2019 .210 Disclosure

6 In QuantumScape's 2019.210 disclosure (submitted contemporaneously with its

7 application and unamended), it lists three subjects as its alleged trade secrets. Wan Deel. Ex.

8 C. All three subjects are disclosed in public literature or QuantumScape's own patents:

9 •
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 2
QuantumScape's 2019.210 disclosure also includes
3
Wan Deel. Ex. C. Fisker conducted a
4
forensic search for these filenames and did not locate any of the files on Cho i's Fisker computer.
5
Wan Deel. ~2. QuantumScape never made these files available to Fisker, so Fisker has never
6
seen the contents of any of these files. Id. Thus, although Fisker is unable to assess whether the
7
files contained trade secrets, Fisker did not possess any of the files. 5
8
2. OuantumScape's Supplemental Declaration of Timothy Holme
9
Instead of properly amending its 2019.210 disclosure, QuantumScape filed a
10
supplemental declaration significantly expanding upon its previous trade secret claims.
11
Supplemental Declaration of Timothy Holme ("Supp. Holme Decl."). 6 Despite not providing
12
Fisker with an amended 2019 .210 disclosure, Quantum Scape tries to broaden what it claims to
13
be its trade secrets by providing six topics that it claims were disclosed by Choi in powerpoints.
14
Supp. Holme Deel. ~ 6. Although Fisker need only respond to the disclosures in
15
QuantumScape's 2019.210 statement, the trade secret claimed in the Supplemental Holme
16
Declaration also fail to meet the trade secret standard:
17
•
18

19

20

21 I
22
23

24

25 I
26
5
QuantumScape apparently did not review all of the files it claims to be trade secrets because the list of files
27 included an empty index file used by all instances of Microsoft One Notebook software.
6
On June 14, 2019, Quantum Scape filed two supplemental declarations. The declarations (especially the Elkins
28 declaration) are essentially a blatantly improper end-around the page limit set by the Rules of Court.
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 2
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Supp. Holme Deel. ,r 6f. This claim fails the specificity
23
requirements of a trade secret. QuantumScape cannot broadly assert that
24
- are trade secrets without further detailing precisely what it is claiming to be a trade secret.
25
ii. The Processes Claimed by QuantumScape as Trade Secrets Are
26 Covered in Fisker's Patents

27 QuantumScape's is not only claiming trade secrets disclosed in public literature, they are

28 also claiming information disclosed by Fisker in its own patent applications. In November
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Case No. l 9:CV-345966
 2017, Fis~er filed a Patent Cooperation Treaty Application. Declaration of Patrick J. Coyne

2 ("Coyne Deel.") at ,rs. This application was published by the World Intellectual Property

5
6

9 Among other claims related to solid-state electrolyte batteries, Fisker's published PCT

10 application specifically discloses which

11 QuantumScape is claiming to be a trade secret. ldatififl6-17. Fisker's published PCT

12 application also disclosed

13 which Quantum Scape contends is a trade secret. Id. at ,r,r 18-22. Further,

14 Fisker's published PCT application discloses

which QuantumScape is claiming to be a trade

15 --
16 secret. Id. at ,r,r25-29. Lastly, Fisker's published PCT application also discloses

18 In addition, Fisker filed a number of additional provisional applications on August 23

19 and 23, 2018. Id at if l 0. These applications have not yet been published. Id. Nonetheless, they

20 evidence additional background information that was in Fisker's possession prior to November

21 12, 2018. Id. These applications also disclose a number of

22

23

24

25

26

27 - QuantumScape alleges as trade secrets. Id. at ,r,r43-46.

28
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 QuantumScape cannot claim as trade secrets processes and materials that Fisker was

2 already using and disclosed in its patents.

3 iii. Equipment listed in Choi's Emails are not Secrets

4 QuantumScape attempts to claim its selection and arrangement of specific lab equipment

5 as a trade secret. Matters of public knowledge or of general knowledge in an industry cannot

6 be appropriated by one as his secret. Aetna Bldg. Maintenance Co., 39 Cal. 2d 198, 206 (1952)

7 (holding that plaintiff's equipment was not a trade secret because it was not unusual or secret

8 equipment). None of this equipment or how it is organized in the lab can be claimed as a trade

9 secret in any way. All of the equipment is publicly available. In fact, much of the equipment

IO and quotes had already been researched by Fisker prior to interviewing Choi. Gupta Deel. ~11.

11 Choi herself did not believe the specifications and recommendations for the equipment were

12 confidential because it was all commercially available. Choi Depo. 48:24-49: 15. Although

13 Choi may have emailed recommendations of QuantumScape's equipment to Fisker,

14 recommendations based on her experience, preference, and what equipment the lab needs does

15 not qualify as a trade secret.

I6 As is evident, whether referring to the existing 2019 .210 statement, or the Supplemental

17 Holme Declaration, QuantumScape is seeking an injunction covering what it calls its "Trade

18 Secrets" that would necessarily and improperly cover published and publicly known material.

19 To the extent QuantumScape believes that far narrower and specific processes that are within

20 the broad categories identified above qualify as trade secrets, they have not been identified to

21 Fisker or the Court. At this stage, however, as defined in its application, QuantumScape has

22 failed to meet its burden to establish that it has actionable trade secrets. Its application should

23 be denied.

24 B. QuantumScape Did Not Take Reasonable Steps to Protect the Secrecy of its

25 Alleged Trade Secrets.

26 Even before Fisker has taken any discovery, it is beyond argument that QuantumScape

27 has not taken the sufficient reasonable measures to protect the information it claims are its

28 invaluable trade secrets. A plaintiff must undertake reasonable efforts to maintain the secrecy
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Case No. I 9-CV-345966
 of the information it is claiming to be a trade secret. See In re Providian Credit Card Cases at

2 306 (information claimed as a trade secret "must have been protected by 'efforts that are

3 reasonable under the circumstances to maintain its secrecy"'); DVD Copy Control Assn., Inc. v.

4 Bunner, 116 Cal. App. 4th 241, 251 (2004) (citing Cal. Civ. Code. § 3426.1, subd. (d). ); San

5 Jose Cons tr., Inc. v. S.B. C. C., Inc., 155 Cal. App. 4th 1528, 1543 (2007).

6 QuantumScape claims that it uses "various protocols" to protect its information, but the

7 reality is that its "protocols" were insufficient, ineffective, and unenforced. Ex Parte App. at

8 13. Indeed, QuantumScape's own allegations are evidence that it failed to take the reasonable

9 steps to keep its information secret. As a low-level technician, Choi was easily able to

IO download 8 USB sticks worth of information from QuantumScape's SharePoint and other

11 storage and take these files home. Supp. Elkins Decl.125; Choi Depa. 19:6-8, 102:5. She was

12 able to bring her QuantumScape laptop anywhere she wanted, including public places (airport)

13 and even to her interview at Fisker. Choi Depo. 47:18-23, 57:18-23, 60:25-61:7. She was

14 allowed to remotely VPN into the system and download allegedly confidential and proprietary

15 document, including, as QuantumScape claims, the alleged trade secrets at issue here, without

16 any added security or monitoring. Choi Depo. 57:21-58: 11. Choi would also use her personal

17 email for work, and regularly emailed QuantumScape files to her personal email account. Ex

18 Parte App. at 16.; Choi Depo. 64: 1-66:3. Further, Choi was even able to have phone access in

19 QuantumScape's lab, allowing her to take photos of QuantumScape equipment and materials.

20 Supp. Elkins Decl.19. QuantumScape has presented no evidence that it maintained or

21 enforced any obstacle or resistance to Choi's actions. As a technology company,

22 QuantumScape did not have a single protocol in place that would have been triggered by the

23 litany of reckless conduct by Choi.

24 Quantum Scape's use of the tracking service Sky High does not help its cause. While

25 SkyHigh permitted QuantumScape to monitor access to its cloud network for the past ninety

26 days, it obviously only works if you check it. QuantumScape either had no protocol to do so,

27 or did not do so competently.

28 Choi Depo. 45:14-21; Gupta Decl.110. If

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Case No. 19-CV-345966
 QuantumScape truly had reasonable protocols to keep its technology and processes a secret, its

2 knowledge that Choi was going to work for an alleged competitor should have, at minimum,

3 caused QuantumScape to make some review of Choi's conduct around the time of her

4 departure. Instead, QuantumScape sat on its hands for four months before they began

5 investigation into Choi, and only a f t e r - informed QuantumScape of their call with

6 Fisker. In an instance when an employee who has access to supposed valuable trade secrets

7 leaves for a competitor, it is wholly unreasonable for a company such as QuantumScape to be

8 completely unaware of the access and downloads of numerous files containing its supposed

9 most important trade secrets.

10 C. QuantumScape Has Not and Will Not Suffer Any Harm

11 Even if the Court was to conclude that QuantumScape has met the standard to establish

12 that it has one or more trade secrets, QuantumScape has not and will not suffer any damage from

13 Fisker. To succeed on a trade secret misappropriation claim, QuantumScape must show that

14 Fisker's alleged improper acquisition of the alleged trade secrets caused QuantumScape harm.

15 See AMN Healthcare, Inc. v. Aya Healthcare Servs., Inc., 28 Cal. App. 5th at 942 (2018).
16 First, QuantumScape has not shown, and cannot show, that any of its alleged trade secrets

17 are being used by Fisker for any purpose. Despite receiving a document production and

18 conducting two depositions, QuantumScape has not presented any evidence that the information

19 was ever actually used at Fisker. As Choi testified in her deposition,

20

21

22

24 Second, Fisker's battery technology is based on its own patents, trade secrets, and publicly

25 known material. Id. at ,r4. To the extent any of the information disclosed by Choi is a trade

26 secret, Fisker has not used and is not using such information in its battery development work.

27 Third, even if Choi's work during her brief tenure at Fisker did use Quantum Scape

28 information (confidential or otherwise), Fisker has taken immediate and appropriate steps to
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Case No. I 9-CV-345966
 purge all of Choi' s work product from Fisker' s research to ensure that no Quantum Scape

2 information is or can be used in Fisker's research. Choi and Albano no longer work for Fisker -

3 both have been gone for months. Gupta Decl.1117-19. And as detailed in Dr. Renna's

4 declaration and above, Fisker has quarantined laptops, Choi's work product, and equipment

5 related to Choi's employment. Renna Decl.118-9, 14-16.

6 Additionally, Fisker's entire battery team has quarantined their existing lab notebooks and

7 started new lab notebooks. Id. at 116(d). Fisker's current LLZO solid-state electrolyte recipe was

8 developed around May 2018 prior to Choi's arrival at Fisker. Id. at 116(m). This recipe was

9 further developed initiated after Choi's departure from Fisker and was developed independently

10 from Choi. Id. All previous sintering profiles have been removed and replaced with new and

11 different sintering profiles that have been independently developed by a new employee that had

12 no previous exposure to Choi's work. Id. at 19. All work instructions and recipes for current

13 processes have been reviewed to ensure that Choi had not contributed to them. Id.

14 Finally, both QuantumScape and Fisker are in the development stage of their respective

15 development process, and are a long way away from marketing any product. Accordingly,

16 QuantumScape has not suffered any actual loss from any Fisker conduct. See Cal. Civ. Code Sec.

17 3426.3(a). And in light of the prophylactic measures taken by Fisker as outlined above,

18 QuantumScape cannot establish that Fisker has been unjustly enriched by Choi's conduct. Id.

19 IV. CONCLUSION
20 For the foregoing reasons, QuantumScape's application for a preliminary injunction

21 should be denied.

22
Dated: July 8, 2019 ORRICK, HERRINGTON & SUTCLIFFE LLP
23

24
By: Isl Robert S. Shwarts
25 Robert S. Shwarts
Attorneys for Defendant
26 FISKER INC.
27

28
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Case No. l 9-CV-345966