In Trade Secret Cases, the Secret Has to Be Defined

Trade secret litigation presents a recurring tension: the information’s value depends on confidentiality, yet a party seeking relief must identify the alleged trade secret with enough clarity to allow the court and the opposing party to evaluate the claim. That issue is central in a pending Southern District of New York criminal prosecution, United States v. Ho (1:25-cr-00003), in which the government alleges that Richard Ho, a quantitative trader, misappropriated proprietary trading source code from Headlands Technologies. Although the matter arises under the federal theft of trade secrets statute, it shows a question that often arises in civil Defend Trade Secrets Act cases as well, that at some point, the asserted trade secrets must be defined with specificity.

This post examines two procedural disputes that bring that requirement into focus: a motion to dismiss arguing that the indictment does not adequately specify the alleged “stolen trade secrets,” and a defense subpoena to Headlands seeking material relevant to whether the information qualifies as a trade secret and to its asserted value.

The Ho indictment dispute is really a specificity dispute

The indictment alleges that Headlands invested over a billion dollars to develop its proprietary trading source code and that Mr. Ho copied “valuable trade secrets” from that code while still employed. The indictment describes the alleged trade secrets at a high level as “portions” or “components” of Headlands’ source code, including some “Atoms” (described as building blocks of the code) and some “Alphas” (described as predictive formulas), plus “other things.” It also describes alleged copying and translation into other programming languages while preserving “structure,” “logic,” “trading insights,” and “functionality.”

The defense response is straightforward: trade secrets are not fungible, and the government cannot prosecute an open ended set. In the motion to dismiss and the reply, the defense argues that an indictment must do more than describe a massive trade secret portfolio in generic terms. It must identify the trade secret or secrets allegedly stolen with enough specificity to satisfy basic constitutional functions: fair notice, grand jury charging limits, and protection against shifting theories.

One practical detail makes the dispute more concrete. According to the defense, the government produced a chart after the indictment with 61 rows comparing Headlands files to ORS files. The defense says the government labeled that list “non exhaustive” and reserved the right to supplement it. The defense position is that this is exactly the problem: the alleged trade secrets cannot be a moving target, because that risks trial on trade secrets that were not the basis for the grand jury’s charging decision.

Even if you set aside the criminal law framing, the core point translates to civil DTSA practice. A party cannot litigate “you stole my trade secrets” if the trade secrets are described as “parts of my source code” without identifying what parts, at least at a level that defines boundaries and lets a defendant prepare a defense.

The subpoena fight shows how “what is the trade secret” drives discovery

The second fight in the Ho case is about a defense subpoena served on Headlands under Criminal Rule 17(c), and Headlands’ effort to quash it as unreasonable and oppressive.

From a trade secrets practitioner’s perspective, what matters is the subject matter of the requests. The defense subpoena seeks categories of material that map onto the statutory elements that must be proven in a theft of trade secrets case and that also map onto what a DTSA plaintiff must prove in a civil case.

Examples include requests aimed at:Headlands’ measures to protect secrecy, such as who had access to specific code repositories at specific points in time. Whether the information had independent economic value from not being generally known, including profit and loss data tied to particular strategies, costs to develop particular strategy code, and order data that would allow analysis of what the strategies actually did in the market.

Context around alleged development and copying, including coding review comments and coding style guidance, which can bear on whether similarities are the product of shared norms, shared tools, shared prior experience, or copying.

Whatever the court ultimately orders Headlands to produce, the structure of the subpoena illustrates something civil DTSA litigators see constantly. The moment you try to prove (or disprove) trade secret status, you end up needing to know what, precisely, is being claimed, and you end up litigating discovery that tests secrecy measures, value, and whether the defendant’s work is actually the same thing. Courts can also be asked to recognize the plaintiff’s legitimate concern about not publicly disclosing the secret, which is why protective orders and sealed disclosures are valuable mechanisms for demonstrating specificity in otherwise public pleadings.

Trade secret definition is not a pleading technicality. It controls what discovery is proportional, what expert work is relevant, and what a jury will actually be asked to decide.

In a civil DTSA case, does the plaintiff have to identify what was stolen?

The DTSA does not contain a single, universal timing rule that says, for every DTSA case in every court, the plaintiff must identify the trade secrets with a particular level of detail by a particular day in the case. Courts differ on how early they force the issue, and recent appellate decisions highlight that split. But at some stage, particularly to avoid dismissal at summary judgment, the plaintiff must identify the trade secrets.

A useful way to think about this in federal practice is that trade secret litigation typically separates two related tasks. The first is pleading a plausible claim without destroying the secrecy of the information. The second is defining, in a protected setting, the specific information that will be litigated as the asserted trade secrets. Because a trade secret derives value from secrecy, courts generally do not require a plaintiff to identify the alleged trade secrets in detail in a public complaint. Instead, the complaint typically describes the trade secrets in general, non-confidential terms, and alleges enough factual context about access, confidentiality, and the alleged taking or use to satisfy ordinary federal notice pleading.

That later identification step functions primarily as a case management tool. A ruling that an identification is “sufficient” generally is not a merits determination that the information is, in fact, a trade secret or that misappropriation occurred. It is a procedural mechanism that pins down what information is in dispute so discovery, expert analysis, and remedies are tied to a defined subject matter rather than to shifting generalities.

Some courts require “sufficient particularity” at the pleading stage. Under that approach, a complaint that effectively says “our whole business is a trade secret” or “our entire software is a trade secret” without meaningful boundaries can be dismissed because neither the defendant nor the court can evaluate whether the alleged information plausibly meets the statutory definition. Even in jurisdictions that do not demand highly detailed pleading, courts often require more than the bare label “trade secrets” or a list of vague categories untethered to the alleged facts. The complaint usually must do enough, in non-confidential terms, to make the existence of protectable information and misappropriation plausible, while reserving the granular boundaries for the formal identification process conducted under confidentiality protections.

Other courts treat trade secret identification as something that can be refined through discovery management and protective orders. Under this more flexible approach, a DTSA plaintiff may not be required to provide an exhaustive, highly granular trade secret list before any discovery at all. Even then, the plaintiff still cannot get to summary judgment or trial without a defined trade secret. A jury cannot determine misappropriation unless it knows what the asserted trade secret is, and a court cannot enter an injunction or award damages without identifying the protected asset.

The timing question also becomes more concrete when a plaintiff seeks early equitable relief. If a trade secret plaintiff requests a temporary restraining order or preliminary injunction, courts often expect the plaintiff to identify the information at issue with enough clarity for the court to assess likelihood of success and to craft enforceable relief. Put differently, the more the plaintiff asks the court to act quickly, the more the plaintiff typically needs to define what the court is being asked to protect.

Another recurring case-management issue is what happens if the defendant challenges the sufficiency of the identification. Courts take different approaches to whether discovery should pause while that dispute is litigated. A common middle path is to avoid a blanket stay that can function as an indefinite freeze, while still allowing targeted sequencing or protective relief if a plaintiff seeks broad, invasive discovery untethered to what the plaintiff has actually placed at issue. The goal is to keep discovery moving, but in a way that remains proportional to the defined trade secret claims.

There is also an important overlay: many DTSA cases are filed alongside state Uniform Trade Secrets Act claims. Some states impose their own pre discovery identification requirement by statute. California is the most famous example, requiring a trade secret plaintiff to identify the trade secret with “reasonable particularity” before discovery relating to the trade secret begins. Massachusetts has a similar statutory sequencing rule. When DTSA and state law travel together, these state sequencing rules, or federal case management orders modeled on them, can move trade secret identification forward in the schedule as a practical matter.

So, while the “when” can vary by jurisdiction and by case management, the “whether” does not. A DTSA plaintiff must eventually put a stake in the ground and define the trade secrets allegedly misappropriated.

What “identify the trade secret” usually means in practice

Courts typically require the plaintiff to define the asserted trade secret with sufficient specificity to serve three related purposes: to distinguish the claimed secret from general knowledge and ordinary industry know how; to provide the defendant fair notice of what it is alleged to have taken or used; and to permit the court to manage discovery in a manner that is proportional to the claims and defenses. In practice, courts may employ particularity requirements, trade secret disclosure statements, and discovery sequencing orders to ensure that discovery remains focused on the information actually at issue.

Many courts analyze “reasonable particularity” in practical, functional terms. The identification should do enough, in the context of the case, to put the defendant on notice of the nature of the claim and to allow the defendant to assess the relevance of discovery requests to the asserted secrets. This does not require trade secret plaintiffs to draft patent-style claims. It requires boundaries that are concrete enough to distinguish protected information from generalized concepts and to prevent the case from drifting into a portfolio-level accusation.

In federal civil practice, that identification commonly takes the form of a written disclosure exchanged under a protective order or confidentiality agreement. Courts often prefer a numbered list format, with each item treated as a distinct asserted trade secret. Numbering helps define the boundaries between one asserted secret and the next, reduces the risk that multiple concepts are conflated into an amorphous “portfolio,” and gives the parties and the court a workable way to manage discovery, motion practice, and remedies.

The writing requirement also matters because it eliminates two arguments that courts frequently reject. A plaintiff generally cannot satisfy identification by saying, in substance, that “the defendant knows what it stole.” Nor can the plaintiff defer identification on the theory that it needs to see the defendant’s materials first before it can say what was taken. Courts recognize that trade secret plaintiffs often face asymmetric information, but still require the plaintiff to identify what it claims to own and what it claims was misappropriated, before the case turns into broad merits discovery.

Courts also tend to distinguish between identifying a trade secret and proving it. Identification is not a substitute for discovery, and it does not resolve the merits questions of secrecy measures, independent economic value, improper acquisition, use, disclosure, causation, or damages. Those issues remain the subject of discovery and proof. But identification is the gateway that ensures those merits questions are tethered to a defined subject matter.

Document references are often part of source-code cases, but courts generally expect more than incorporation by reference. A trade secret is not typically identified solely by pointing to a document unless the entire document is claimed as the secret. If the plaintiff uses documents to provide context, examples, or provenance, the identification usually still includes a narrative description that defines what in the document is claimed and where the boundaries lie. The same principle applies to “dump truck” identifications that cite large sets of materials without specifying what portions constitute the alleged secret.

In source code cases, that identification often takes the form of describing specific modules, functions, workflows, data structures, or repositories, with enough detail to differentiate the asserted secret from the broader codebase. Depending on the record and the protective order, the description may be tied to file paths, commit histories, internal documentation, model specifications, or a defined combination of components. The appropriate level of detail is case specific, but the consistent objective is to move toward a defined set of information that can be evaluated for trade secret status and tested for alleged misappropriation.

Combination and compilation theories add another layer. If the plaintiff contends that the trade secret lies in a specific combination of elements, the identification typically states the combination as a whole rather than listing ingredients and leaving the defendant to guess what combination is asserted. A related issue arises with negative know how. In some disputes, the asserted secret is not only what works, but what does not work, such as failed experiments or lessons learned that save development time. When that is the theory, the identification typically specifies the negative knowledge with enough clarity to show what lesson is claimed, not merely that the plaintiff undertook research and development.

Complex technical disputes sometimes prompt expert input, but not as a substitute for the identification itself. Courts often expect the identification to stand on its own as a description of the alleged secrets. Experts more commonly appear when the parties litigate whether an identification is sufficiently particular. In that posture, expert declarations can help the court determine whether qualified reviewers can understand what is being claimed, separate from the ultimate question of whether the claim succeeds on the merits.

Access and confidentiality are also part of “what identification means in practice.” Because the identification itself contains the asserted secrets, protective orders often define who can see it and under what tier of confidentiality. In competitor disputes, parties sometimes litigate whether the accused misappropriator or in-house personnel may review the identification, or whether access should be limited to outside counsel and experts. Those access rules can shape how the case is staffed, how discovery proceeds, and how the parties manage competitive risk while litigating the merits.

Finally, while identifications can sometimes be amended, the amendment process is typically managed to avoid a moving target. Courts often expect that the trade secrets identified early in the case, as later refined through an orderly process, are the same trade secrets litigated at summary judgment and trial, and that the wording does not materially change at the merits stage except through a controlled amendment process.

Why the Ho litigation is a useful reminder for DTSA plaintiffs

Even though the Ho case is criminal, its disputes illustrate a familiar risk in civil DTSA litigation. When the claimant does not clearly identify the asserted trade secret, the case is exposed at every procedural stage: it invites dismissal or narrowing on the pleadings in courts that require early particularity; it supports defense requests for an early trade secret disclosure before broad discovery; it creates summary judgment risk because the claimant cannot prove trade secret status or misappropriation without a defined subject matter; and it complicates trial because the jury instructions and verdict form require an identified trade secret.

As a practical matter, plaintiffs inventory and define their trade secrets before filing, then plead and disclose them in a manner that protects confidentiality while setting clear boundaries. Defendants press early on the threshold question, what is the trade secret, because that issue shapes the scope of discovery, expert analysis, damages, and injunctive relief.

Closing thought

Trade secret cases are not like ordinary commercial disputes where the “thing” at issue is a contract or a tangible product. The “thing” is information. If the plaintiff does not define it, the court cannot protect it, the defendant cannot defend against it, and the case cannot be tried.

The Ho motion to dismiss and the subpoena fight are an illustration of that reality, and a useful prompt for any party considering a DTSA claim or defense: define the secret early, define it carefully, and expect that the litigation will turn on that definition.

Our firm has represented hedge funds and quantitative trading firms in DTSA matters involving proprietary models, research workflows, and source code, including expedited proceedings when necessary. If you would like to discuss a potential trade secret issue, please contact us for a confidential conversation.

This post is for general informational purposes and does not constitute legal advice.

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