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Electronically Filed by Superior Court of CA, County of Santa Clara, On 7/9/2019 12:03 AM Reviewed By: F. Miller Case #19CV345966 Envelope: 3100639
Electronically Filed by Superior Court of CA, County of Santa Clara, On 7/9/2019 12:03 AM Reviewed By: F. Miller Case #19CV345966 Envelope: 3100639
Miller
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2 Page
3 I. INTRODUCTION .............................................................................................................. 1
II. STATEMENT OF FACTS ................................. ... ............................................................. 2
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A. Recruitment and Hiring of Choi .............................................................................. 2
5 Choi's Employment at Fisker ................................................................................. 4
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6 C. Fisker's Quarantine Efforts ..................................................................................... 5
III. ARGUMENT ...................................................................................................................... 6
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A. QuantumScape's Claimed Trade Secrets are Not Trade Secrets ............................ 7
8 QuantumScape's Alleged Trade Secrets Are Generally Known Or
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In Public Literature ..................................................................................... 7
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1. QuantumScape's 2019.210 Disclosure ........................................... 8
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2. QuantumScape's Supplemental Declaration of Timothy
Holme ...... .............................................. .......................................... 9
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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
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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
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IV. CONCLUSION ....................................................................... .......................................... 15
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FISKER'S OPPOSITION TO ENTRY OF PRELIMINARY INJUNCTION
Case No. I 9-CV-345966
1 TABLE OF AUTHORITIES
2 Page(s)
3 Cases
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Abba Rubber Co. v. Seaquist,
5 235 Cal. App. 3d 1 (1991) ........................................................................................................... 7
22 West v. Lind,
186 Cal. App. 2d 563 (1960) ....................................................................................................... 6
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Whyte v. Sch/age Lock Co.,
24 101 Cal. App. 4th 1443 (2002) .................................................................................................... 7
25 Statutes
26 C.C.P. § 2019.210 ............................................................................................................................. 7
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C.C.P. § 2025.230 ...................................................................................... ....................................... 3
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Case No. l 9-CV-345966
1 Cal. Civ. Code§ 3426.1(4)(a) ........................................................................................................... 7
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I. INTRODUCTION
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
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.
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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.
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.
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. -
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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
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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
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
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
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 -
25 - Supp. Elkins Deel. Ex. 13. Then on December 5, 2018, again without Fisker asking,
26 Choi provided a
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"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
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
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17 Choi started her job at Fisker on January 2, 2019, ultimately reporting to Albano. Gupta
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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
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IO Fisker terminated Choi's employment on April 26, 2019. Gupta Decl.118. Albano
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).
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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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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
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
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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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
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
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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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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").
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:
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QuantumScape's 2019.210 disclosure also includes
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Wan Deel. Ex. C. Fisker conducted a
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forensic search for these filenames and did not locate any of the files on Cho i's Fisker computer.
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Wan Deel. ~2. QuantumScape never made these files available to Fisker, so Fisker has never
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seen the contents of any of these files. Id. Thus, although Fisker is unable to assess whether the
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files contained trade secrets, Fisker did not possess any of the files. 5
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2. OuantumScape's Supplemental Declaration of Timothy Holme
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Instead of properly amending its 2019.210 disclosure, QuantumScape filed a
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supplemental declaration significantly expanding upon its previous trade secret claims.
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Supplemental Declaration of Timothy Holme ("Supp. Holme Decl."). 6 Despite not providing
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Fisker with an amended 2019 .210 disclosure, Quantum Scape tries to broaden what it claims to
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be its trade secrets by providing six topics that it claims were disclosed by Choi in powerpoints.
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Supp. Holme Deel. ~ 6. Although Fisker need only respond to the disclosures in
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QuantumScape's 2019.210 statement, the trade secret claimed in the Supplemental Holme
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Declaration also fail to meet the trade secret standard:
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QuantumScape apparently did not review all of the files it claims to be trade secrets because the list of files
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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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Supp. Holme Deel. ,r 6f. This claim fails the specificity
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requirements of a trade secret. QuantumScape cannot broadly assert that
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- are trade secrets without further detailing precisely what it is claiming to be a trade secret.
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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
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9 Among other claims related to solid-state electrolyte batteries, Fisker's published PCT
13 which Quantum Scape contends is a trade secret. Id. at ,r,r 18-22. Further,
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
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QuantumScape cannot claim as trade secrets processes and materials that Fisker was
4 QuantumScape attempts to claim its selection and arrangement of specific lab equipment
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
14 recommendations based on her experience, preference, and what equipment the lab needs does
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
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.
22 QuantumScape did not have a single protocol in place that would have been triggered by the
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,
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
8 completely unaware of the access and downloads of numerous files containing its supposed
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
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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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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
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.
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Dated: July 8, 2019 ORRICK, HERRINGTON & SUTCLIFFE LLP
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By: Isl Robert S. Shwarts
25 Robert S. Shwarts
Attorneys for Defendant
26 FISKER INC.
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