{"attribution":{"source":"legal.exploreworldai.com","canonical":"https://legal.exploreworldai.com/api/public/v1/judgment-text?id=us:ca4-24-2173-2025-11-18","cite_as":"NovaCopilot, legal.exploreworldai.com (https://legal.exploreworldai.com/api/public/v1/judgment-text?id=us:ca4-24-2173-2025-11-18)","license":"https://legal.exploreworldai.com/revision","version":"legal-2026-10-11","fingerprint":"ewai:us:e0b409","proof":"sha256:ec8c80364bb4d515ea49c31afec3f353aaa1bd21ac0ded582ef7ac821af15c60","jurisdiction":"us","lang":"en","publisher":"NovaCopilot by ExploreWorld Legal","terms":"https://legal.exploreworldai.com/om"},"brand_source":"Source: NovaCopilot","item":{"schema_version":"1.0.0","id":"us:ca4-24-2173-2025-11-18","jurisdiction":"us","lang":"en","brand_source":"Source: NovaCopilot","brand":{"product":"NovaCopilot","platform":"ExploreWorldAI","infrastructure":"ExploreWorld Legal","infrastructure_url":"legal.exploreworldai.com","legal_entity":"Valkiv Ventures AB","permanent_url":"https://legal.exploreworldai.com/novacopilot","source":"Source: NovaCopilot","powered_by":"Powered by NovaCopilot","license":"https://legal.exploreworldai.com/licensvillkor"},"sections":[{"title":"Front matter","paragraphs":["para_1","para_2","para_3","para_4","para_5","para_6","para_7","para_8","para_9","para_10","para_11","para_12","para_13","para_14","para_15","para_16","para_17","para_18","para_19","para_20","para_21","para_22","para_23","para_24","para_25","para_26","para_27","para_28","para_29","para_30","para_31","para_32","para_33","para_34","para_35","para_36","para_37","para_38","para_39","para_40","para_41","para_42","para_43","para_44","para_45","para_46","para_47","para_48","para_49","para_50","para_51","para_52","para_53","para_54","para_55","para_56","para_57","para_58","para_59","para_60","para_61","para_62","para_63","para_64","para_65","para_66","para_67","para_68","para_69","para_70","para_71","para_72","para_73","para_74","para_75","para_76","para_77","para_78","para_79","para_80","para_81","para_82","para_83","para_84","para_85","para_86","para_87","para_88","para_89","para_90","para_91","para_92","para_93","para_94","para_95","para_96","para_97","para_98","para_99","para_100","para_101","para_102","para_103","para_104","para_105","para_106","para_107","para_108","para_109","para_110","para_111","para_112","para_113","para_114","para_115","para_116","para_117","para_118","para_119","para_120","para_121","para_122","para_123","para_124","para_125","para_126","para_127","para_128","para_129","para_130","para_131","para_132","para_133","para_134","para_135","para_136","para_137","para_138","para_139","para_140","para_141","para_142","para_143","para_144","para_145","para_146","para_147","para_148","para_149","para_150","para_151","para_152","para_153","para_154","para_155","para_156","para_157","para_158","para_159","para_160","para_161","para_162","para_163","para_164","para_165","para_166","para_167","para_168","para_169","para_170","para_171","para_172","para_173","para_174","para_175","para_176","para_177","para_178","para_179","para_180","para_181","para_182","para_183","para_184","para_185","para_186","para_187","para_188","para_189","para_190","para_191","para_192","para_193","para_194","para_195","para_196","para_197","para_198","para_199","para_200","para_201","para_202","para_203","para_204","para_205","para_206","para_207","para_208","para_209","para_210","para_211","para_212","para_213","para_214","para_215","para_216","para_217","para_218","para_219","para_220","para_221","para_222","para_223","para_224","para_225","para_226","para_227","para_228","para_229","para_230","para_231","para_232","para_233","para_234","para_235","para_236","para_237","para_238","para_239","para_240","para_241","para_242","para_243","para_244","para_245","para_246","para_247","para_248","para_249","para_250","para_251","para_252","para_253","para_254","para_255","para_256","para_257","para_258","para_259","para_260","para_261","para_262","para_263","para_264","para_265","para_266","para_267","para_268","para_269","para_270","para_271","para_272","para_273","para_274","para_275","para_276","para_277","para_278","para_279","para_280","para_281"],"kind":"front_matter"}],"paragraphs":[{"text":"PUBLISHED","paragraph_id":"para_1"},{"text":"UNITED STATES COURT OF APPEALS","paragraph_id":"para_2"},{"text":"FOR THE FOURTH CIRCUIT","paragraph_id":"para_3"},{"text":"No. 24-2173","paragraph_id":"para_4"},{"text":"SAMUEL SHERBROOKE CORPORATE, LTD; SAMUEL GOLDNER,","paragraph_id":"para_5"},{"text":"Plaintiffs - Appellants,","paragraph_id":"para_6"},{"text":"v.","paragraph_id":"para_7"},{"text":"GABRIEL MAYER; BEAU WALKER; JOSEPH MATTHEW QUEEN; HELIOS","paragraph_id":"para_8"},{"text":"RISK SOLUTIONS, LLC,","paragraph_id":"para_9"},{"text":"Defendants - Appellees.","paragraph_id":"para_10"},{"text":"Appeal from the United States District Court for the Eastern District of North Carolina, at","paragraph_id":"para_11"},{"text":"Raleigh. Terrence W. Boyle, District Judge. (5:24-cv-00057-BO-RJ)","paragraph_id":"para_12"},{"text":"Argued: October 22, 2025 Decided: November 18, 2025","paragraph_id":"para_13"},{"text":"Before AGEE, THACKER, and RICHARDSON, Circuit Judges.","paragraph_id":"para_14"},{"text":"Reversed and remanded by published. Judge Thacker wrote the opinion, in which Judge","paragraph_id":"para_15"},{"text":"Agee and Judge Richardson joined.","paragraph_id":"para_16"},{"text":"ARGUED: Dylan Michael Bensinger, MCGUIREWOODS, LLP, Charlotte, North","paragraph_id":"para_17"},{"text":"Carolina, for Appellants. David L. Pardue, PIERSON FERDINAND, Atlanta, Georgia,","paragraph_id":"para_18"},{"text":"for Appellees. ON BRIEF: Jonathan Y. Ellis, Raleigh, North Carolina, Brian A. Kahn,","paragraph_id":"para_19"},{"text":"Zachary L. McCamey, Elizabeth P. Briand, MCGUIREWOODS LLP, Charlotte, North","paragraph_id":"para_20"},{"text":"Carolina, for Appellants. Brian D. Stoltz, Atlanta, Georgia, Scott E. Bayzle, Andrew P.","paragraph_id":"para_21"},{"text":"Tabeling, PARKER POE ADAMS & BERNSTEIN LLP, Raleigh, North Carolina, for","paragraph_id":"para_22"},{"text":"Appellees.","paragraph_id":"para_23"},{"text":"USCA4 Appeal: 24-2173 Doc: 48 Filed: 11/18/2025 Pg: 1 of 12","paragraph_id":"para_24"},{"text":"2","paragraph_id":"para_25"},{"text":"USCA4 Appeal: 24-2173 Doc: 48 Filed: 11/18/2025 Pg: 2 of 12","paragraph_id":"para_26","court_paragraph":2},{"text":"3","paragraph_id":"para_27"},{"text":"THACKER, Circuit Judge:","paragraph_id":"para_28","court_paragraph":3},{"text":"The question in this appeal is whether Samuel Sherbrooke Corporation","paragraph_id":"para_29"},{"text":"(“Sherbrooke”) and Samuel Goldner (“Goldner,” and with Sherbrooke, “Appellants”)","paragraph_id":"para_30"},{"text":"sufficiently pled their Defend Trade Secrets Act (“DTSA”) claim against Gabriel Mayer,","paragraph_id":"para_31"},{"text":"Beau Walker, and Joe Queen (collectively, “Appellees”).","paragraph_id":"para_32"},{"text":"We conclude that they did because the Complaint plausibly alleges that Sherbrooke","paragraph_id":"para_33"},{"text":"owned a trade secret that it took reasonable measures to secure and that Appellees","paragraph_id":"para_34"},{"text":"misappropriated that trade secret.","paragraph_id":"para_35"},{"text":"Therefore, we reverse the district court’s decision dismissing their Complaint.","paragraph_id":"para_36"},{"text":"I.","paragraph_id":"para_37"},{"text":"On June 5, 2018, Sherbrooke was incorporated as a captive insurance company in","paragraph_id":"para_38"},{"text":"North Carolina. As a captive insurance company, Sherbrooke insures only its “captive,”","paragraph_id":"para_39"},{"text":"which are nursing homes and other entities owned by Goldner’s company, Goldner Capital","paragraph_id":"para_40"},{"text":"Management. Sherbrooke has only three shareholders -- Goldner, who is the majority","paragraph_id":"para_41"},{"text":"shareholder, and Mayer and Queen, who are each minority shareholders. These three","paragraph_id":"para_42"},{"text":"shareholders elected themselves as Sherbrooke’s directors. Goldner stepped away from day","paragraph_id":"para_43"},{"text":"to day operations of Sherbrooke, so Mayer and Queen “assumed and performed all","paragraph_id":"para_44"},{"text":"operations of Sherbrooke as the primary officers.” J.A. 13.1 “[A]s directors, officers, and","paragraph_id":"para_45"},{"text":"minority shareholders, . . . Mayer and . . . Queen had complete, total, and formidable","paragraph_id":"para_46"},{"text":"managerial control over Sherbrooke since its formation and incorporation.” Id.","paragraph_id":"para_47"},{"text":"1 Citations to the “J.A.” refer to the Joint Appendix filed by the parties in this appeal.","paragraph_id":"para_48"},{"text":"USCA4 Appeal: 24-2173 Doc: 48 Filed: 11/18/2025 Pg: 3 of 12","paragraph_id":"para_49"},{"text":"4","paragraph_id":"para_50"},{"text":"Goldner hired Walker as Sherbrooke’s Chief Technology Officer in March 2022.","paragraph_id":"para_51","court_paragraph":4},{"text":"According to the Complaint, Walker’s “responsibilities included designing, creating, and","paragraph_id":"para_52"},{"text":"maintaining proprietary software (the ‘Proprietary Software’) for the exclusive use of","paragraph_id":"para_53"},{"text":"Sherbrooke and its related entities.” J.A. 17. “The Proprietary Software enabled","paragraph_id":"para_54"},{"text":"Sherbrooke to, among other things, incorporate and utilize medical records to project and","paragraph_id":"para_55"},{"text":"predict risk values in pricing individual covered incidents more effectively.” Id. at 18. “In","paragraph_id":"para_56"},{"text":"addition, the Proprietary Software is used by Sherbrooke to more accurately price insurance","paragraph_id":"para_57"},{"text":"contracts for both existing and potential customers to provide competitive and profitable","paragraph_id":"para_58"},{"text":"insurance policies for Sherbrooke and its customers.” Id. And, the Proprietary Software","paragraph_id":"para_59"},{"text":"“provides additional services to Sherbrooke, which produce enormous economic value due","paragraph_id":"para_60"},{"text":"to its secrecy and proprietary nature.” Id.","paragraph_id":"para_61"},{"text":"Relevant here, the Complaint alleges that each of the Appellees was required to sign","paragraph_id":"para_62"},{"text":"an employment contract. The employment contracts contained the following","paragraph_id":"para_63"},{"text":"confidentiality agreement:","paragraph_id":"para_64"},{"text":"[The employee] shall not, at any time hereafter, disclose","paragraph_id":"para_65"},{"text":"Confidential Information to any Person or use or exploit","paragraph_id":"para_66"},{"text":"Confidential Information for any purpose other than for the","paragraph_id":"para_67"},{"text":"benefit of the [Sherbrooke] thereof in the regular course of his","paragraph_id":"para_68"},{"text":"engagement and within the scope of his authority and","paragraph_id":"para_69"},{"text":"responsibility (a) without the prior written authorization or","paragraph_id":"para_70"},{"text":"consent of [Sherbrooke], (b) unless such Confidential","paragraph_id":"para_71"},{"text":"Information is already known by Employee prior to the time","paragraph_id":"para_72"},{"text":"such Confidential Information is acquired by Employee in the","paragraph_id":"para_73"},{"text":"course of his engagement,(c) unless such Confidential","paragraph_id":"para_74"},{"text":"Information is already known by the Person to whom","paragraph_id":"para_75"},{"text":"disclosure is made prior to the time of disclosure by Employee,","paragraph_id":"para_76"},{"text":"or (d) if, and to the extent, disclosure is required by applicable","paragraph_id":"para_77"},{"text":"law, subpoena or other compulsory legal process, or an order","paragraph_id":"para_78"},{"text":"of a court or governmental agency, commission or other","paragraph_id":"para_79"},{"text":"USCA4 Appeal: 24-2173 Doc: 48 Filed: 11/18/2025 Pg: 4 of 12","paragraph_id":"para_80"},{"text":"5","paragraph_id":"para_81"},{"text":"authority; provided that, in such case, if permitted by law, such","paragraph_id":"para_82","court_paragraph":5},{"text":"legal process or order, Employee shall promptly notify","paragraph_id":"para_83"},{"text":"[Sherbrooke] of such required disclosure so that [Sherbrooke]","paragraph_id":"para_84"},{"text":"may oppose such disclosure or seek a protective order or other","paragraph_id":"para_85"},{"text":"confidential treatment of such Confidential Information.","paragraph_id":"para_86"},{"text":"J.A. 13 (first alteration supplied, remaining alterations in original).","paragraph_id":"para_87"},{"text":"Each employment contract also included an “Inventions Provision,” which stated,","paragraph_id":"para_88"},{"text":"any invention, idea, design, process, system, procedure,","paragraph_id":"para_89"},{"text":"improvement, development or discovery (an “Invention”)","paragraph_id":"para_90"},{"text":"conceived, created, made or developed by Employee, alone or","paragraph_id":"para_91"},{"text":"with others, (a) during the Term or (b) during the balance of","paragraph_id":"para_92"},{"text":"the Restricted Period, if such Invention incorporates, is derived","paragraph_id":"para_93"},{"text":"from, or is based upon any Confidential Information, and, in","paragraph_id":"para_94"},{"text":"either case, that is applicable to the business of [Sherbrooke],","paragraph_id":"para_95"},{"text":"whether or not patentable or registrable, shall become the sole","paragraph_id":"para_96"},{"text":"and exclusive property of [Sherbrooke].","paragraph_id":"para_97"},{"text":"J.A. 14–15 (alterations in original).","paragraph_id":"para_98"},{"text":"The Complaint alleges that “[a]ny property that [Appellee] Walker created during","paragraph_id":"para_99"},{"text":"or related to his employment as CTO of Sherbrooke, including but not limited to the","paragraph_id":"para_100"},{"text":"Proprietary Software, is the confidential and exclusive property of Sherbrooke.” J.A. 18.","paragraph_id":"para_101"},{"text":"It further alleges, “[t]his Proprietary Software is—and always has been—the confidential","paragraph_id":"para_102"},{"text":"property of Sherbrooke. Sherbrooke has used all commercially reasonable measures to","paragraph_id":"para_103"},{"text":"ensure that the Proprietary Software remains confidential and provides unique value to","paragraph_id":"para_104"},{"text":"Sherbrooke.” Id.","paragraph_id":"para_105"},{"text":"Appellants claim that Appellees violated their employment contracts and","paragraph_id":"para_106"},{"text":"misappropriated the Propriety Software. According to the Complaint, “in or around 2022,","paragraph_id":"para_107"},{"text":"[Appellee] Queen and [Appellee] Mayer began preparations to create a corporate entity to","paragraph_id":"para_108"},{"text":"compete with Sherbrooke and its corporate affiliates. At some time thereafter, [Appellee]","paragraph_id":"para_109"},{"text":"USCA4 Appeal: 24-2173 Doc: 48 Filed: 11/18/2025 Pg: 5 of 12","paragraph_id":"para_110"},{"text":"6","paragraph_id":"para_111"},{"text":"Walker joined this scheme.” J.A. 18. “Upon information and belief, [Appellee] Walker—","paragraph_id":"para_112","court_paragraph":6},{"text":"in coordination with [Appellee] Queen and [Appellee] Mayer—is actively using","paragraph_id":"para_113"},{"text":"confidential property of Sherbrooke, including but not limited to the Proprietary Software","paragraph_id":"para_114"},{"text":"to assist with operating this new competing insurance entity.” Id. at 19.","paragraph_id":"para_115"},{"text":"Goldner learned about Appellees’ “coordinated effort to undermine Sherbrooke and","paragraph_id":"para_116"},{"text":"its related corporate entities,” in December 2023, and immediately took steps to terminate","paragraph_id":"para_117"},{"text":"Appellees’ employment and also to remove Mayer and Queen as directors of Sherbrooke.","paragraph_id":"para_118"},{"text":"J.A. 20. But, the Complaint alleges that Mayer and Queen “refused to relinquish control","paragraph_id":"para_119"},{"text":"over Sherbrooke and its assets, including liquid, tangible, intangible, and other assets.” Id.","paragraph_id":"para_120"},{"text":"at 21.","paragraph_id":"para_121"},{"text":"On January 30, 2024, Appellants sued Appellees in the Eastern District of North","paragraph_id":"para_122"},{"text":"Carolina, alleging, in addition to various state law claims related to corporate malfeasance,","paragraph_id":"para_123"},{"text":"that Appellees misappropriated Sherbrooke’s trade secrets in violation of the DTSA.","paragraph_id":"para_124"},{"text":"Appellees later moved for judgment on the pleadings pursuant to Federal Rule of Civil","paragraph_id":"para_125"},{"text":"Procedure 12(c). After a hearing, the district court entered a written order granting","paragraph_id":"para_126"},{"text":"Appellees’ motion for judgment on the pleadings as to the DTSA claim and declining to","paragraph_id":"para_127"},{"text":"exercise supplemental jurisdiction over all of the remaining state law claims.2","paragraph_id":"para_128"},{"text":"Appellants timely filed this appeal.","paragraph_id":"para_129"},{"text":"2 Appellants do not challenge the district court’s order dismissing the state law","paragraph_id":"para_130"},{"text":"claims.","paragraph_id":"para_131"},{"text":"USCA4 Appeal: 24-2173 Doc: 48 Filed: 11/18/2025 Pg: 6 of 12","paragraph_id":"para_132"},{"text":"7","paragraph_id":"para_133"},{"text":"II.","paragraph_id":"para_134","court_paragraph":7},{"text":"We review the district court’s grant of judgment on the pleadings de novo. See","paragraph_id":"para_135"},{"text":"Williamson v. Prime Sports Marketing, LLC, 101 F.4th 302, 309 (4th Cir. 2024). In doing","paragraph_id":"para_136"},{"text":"so, we apply the same standard applicable to motions to dismiss pursuant to Federal Rule","paragraph_id":"para_137"},{"text":"of Civil Procedure 12(b)(6). Conner v. Cleveland Co., 22 F.4th 412, 416 (4th Cir. 2022).","paragraph_id":"para_138"},{"text":"That is, we accept the well pled facts “as true and draw[] all reasonable inferences in","paragraph_id":"para_139"},{"text":"[Appellants’] favor.” Id. (citation omitted). “[T]hose allegations must be sufficient to","paragraph_id":"para_140"},{"text":"support ‘a claim to relief that is plausible on its face.’” Sysco Machinery Corp. v. DCS","paragraph_id":"para_141"},{"text":"USA Corp., 143 F.4th 222, 228 (4th Cir. 2025) (quoting Ashcroft v. Iqbal, 556 U.S. 662,","paragraph_id":"para_142"},{"text":"678 (2009)). “A plausible claim to relief demands more than an unadorned, the defendant-","paragraph_id":"para_143"},{"text":"unlawfully-harmed-me accusation.” Id. (cleaned up). “When it is a claim for trade secret","paragraph_id":"para_144"},{"text":"misappropriation under the DTSA . . . it demands plausible allegations both that the","paragraph_id":"para_145"},{"text":"plaintiff possessed a valid trade secret and that the trade secret was misappropriated.” Id.","paragraph_id":"para_146"},{"text":"(cleaned up).","paragraph_id":"para_147"},{"text":"III.","paragraph_id":"para_148"},{"text":"To state a viable DTSA claim, a plaintiff must plausibly allege that (1) it owns a","paragraph_id":"para_149"},{"text":"trade secret; (2) the trade secret was misappropriated; and (3) the trade secret implicates","paragraph_id":"para_150"},{"text":"interstate or foreign commerce. See Sysco Machinery Corp. v. DCS USA Corp., 143 F.4th","paragraph_id":"para_151"},{"text":"222, 228–29 (4th Cir. 2025).","paragraph_id":"para_152"},{"text":"A.","paragraph_id":"para_153"},{"text":"Pursuant to the DTSA, information is a trade secret if (1) its owner “has taken","paragraph_id":"para_154"},{"text":"reasonable measures to keep [it] secret” and (2) it “derives independent economic value”","paragraph_id":"para_155"},{"text":"USCA4 Appeal: 24-2173 Doc: 48 Filed: 11/18/2025 Pg: 7 of 12","paragraph_id":"para_156"},{"text":"8","paragraph_id":"para_157"},{"text":"from its secrecy. 18 U.S.C. § 1839(3). The district court determined that Appellants failed","paragraph_id":"para_158","court_paragraph":8},{"text":"to plausibly allege they took reasonable measures to protect the secrecy of the Proprietary","paragraph_id":"para_159"},{"text":"Software. On appeal, Appellants argue they did sufficiently plead the secrecy element","paragraph_id":"para_160"},{"text":"because they pled that Appellees were required to sign the employment contract which","paragraph_id":"para_161"},{"text":"included the confidentiality agreement and Invention Provision. And they argue that they","paragraph_id":"para_162"},{"text":"sufficiently connected those provisions to the Proprietary Software. We agree.","paragraph_id":"para_163"},{"text":"The Complaint makes clear that the “Proprietary Software is—and always has","paragraph_id":"para_164"},{"text":"been—the confidential property of Sherbrooke.” J.A. 18. It also alleges that the","paragraph_id":"para_165"},{"text":"employment contract specified that employees “shall not, at any time hereafter, disclose","paragraph_id":"para_166"},{"text":"Confidential Information.” Id. at 13. And it alleges that the Invention Provision provided,","paragraph_id":"para_167"},{"text":"“any invention, idea, design, process, system, procedure, improvement, development or","paragraph_id":"para_168"},{"text":"discovery (an ‘Invention’) conceived, created, made or developed by Employee” through","paragraph_id":"para_169"},{"text":"their employment “shall become the sole and exclusive property of [Sherbrooke].” Id. at","paragraph_id":"para_170"},{"text":"14–15. Taking these allegations as true, we have no trouble concluding that the Complaint","paragraph_id":"para_171"},{"text":"sufficiently alleges that the Proprietary Software, which was “confidential property,” was","paragraph_id":"para_172"},{"text":"treated as confidential information under the employment contract.","paragraph_id":"para_173"},{"text":"Appellees argue that the Complaint fails to make this connection because the facts","paragraph_id":"para_174"},{"text":"pled do not allow us to “know[] whether, for example, the ‘Proprietary Software’ uses open","paragraph_id":"para_175"},{"text":"source code which is already publicly available (and, thus, could not be confidential as a","paragraph_id":"para_176"},{"text":"matter of law) . . . . As such, it is impossible to know if the alleged confidentiality provision","paragraph_id":"para_177"},{"text":"would apply (or whether it would even be enforceable).” Response Br. at 11. But this","paragraph_id":"para_178"},{"text":"argument requires too much. Appellants did not need to prove anything. They only needed","paragraph_id":"para_179"},{"text":"USCA4 Appeal: 24-2173 Doc: 48 Filed: 11/18/2025 Pg: 8 of 12","paragraph_id":"para_180"},{"text":"9","paragraph_id":"para_181"},{"text":"to plausibly allege that the Proprietary Software was covered by the confidentiality","paragraph_id":"para_182","court_paragraph":9},{"text":"provision, which was a reasonable measure intended to keep it secret. Appellants did so","paragraph_id":"para_183"},{"text":"here.","paragraph_id":"para_184"},{"text":"Even still, Appellees argue that the existence of a confidentiality provision alone is","paragraph_id":"para_185"},{"text":"not sufficient as a matter of law to demonstrate reasonable efforts to maintain secrecy. At","paragraph_id":"para_186"},{"text":"this stage of the proceedings, we disagree, and the Ninth Circuit has concluded similarly.","paragraph_id":"para_187"},{"text":"In InteliClear, LLC v. ETC Glob. Holdings, Inc., the Ninth Circuit held, “[c]onfidentiality","paragraph_id":"para_188"},{"text":"provisions constitute reasonable steps to maintain secrecy.” 978 F.3d 653, 660 (9th Cir.","paragraph_id":"para_189"},{"text":"2020). True, plaintiffs often allege that they did more than simply require a signed","paragraph_id":"para_190"},{"text":"confidentiality agreement to maintain secrecy. See e.g., dmarcian, Inc. v. dmarcian Europe","paragraph_id":"para_191"},{"text":"BV, 60 F.4th 119, 142 (4th Cir. 2023) (finding a likelihood of success on the merits in the","paragraph_id":"para_192"},{"text":"context of a preliminary injunction and noting that the plaintiff had “taken steps to keep","paragraph_id":"para_193"},{"text":"such information secret through security measures restricting access to the source code and","paragraph_id":"para_194"},{"text":"requiring confidentiality agreements from employees” (emphasis supplied)); Ahern","paragraph_id":"para_195"},{"text":"Rentals, Inc. v. EquipmentShare.com, Inc., 59 F.4th 948, 956 (8th Cir. 2023) (finding that","paragraph_id":"para_196"},{"text":"plaintiff sufficiently plead reasonable steps where it alleged it “requires its employees to","paragraph_id":"para_197"},{"text":"sign detailed non-disclosure, non-solicitation, and non-competition agreements,” and","paragraph_id":"para_198"},{"text":"alleged that “its employees must comply with strict social media, internet, and email","paragraph_id":"para_199"},{"text":"policies that prohibit employees from disclosing or otherwise publishing trade secrets”","paragraph_id":"para_200"},{"text":"(cleaned up)); Allstate Ins. Co. v. Fougere, 79 F.4th 172, 192–93 (1st Cir. 2023) (finding","paragraph_id":"para_201"},{"text":"Plaintiff took “multiple steps towards protecting the information” where it required a","paragraph_id":"para_202"},{"text":"signed exclusive agency agreement that identified which information was confidential,","paragraph_id":"para_203"},{"text":"USCA4 Appeal: 24-2173 Doc: 48 Filed: 11/18/2025 Pg: 9 of 12","paragraph_id":"para_204"},{"text":"10","paragraph_id":"para_205"},{"text":"granted access only to certain agents, used password protection, and revoked access upon","paragraph_id":"para_206","court_paragraph":10},{"text":"employment termination). But that does not mean they are required to allege more, and","paragraph_id":"para_207"},{"text":"we see no reason to create such a requirement.","paragraph_id":"para_208"},{"text":"Trade secrets take many forms and what may constitute “reasonable measures” must","paragraph_id":"para_209"},{"text":"be considered in light of the nature of the trade secret and the context in which it exists.","paragraph_id":"para_210"},{"text":"See In the Matter of Innovative Const. Sys., Inc., 793 F.2d 875, 884–85 (7th Cir. 1986) (“In","paragraph_id":"para_211"},{"text":"asking whether particular efforts were reasonably adequate under the circumstances, the","paragraph_id":"para_212"},{"text":"jury is called upon in part to exercise their common-sense judgment in determining whether","paragraph_id":"para_213"},{"text":"additional measures were necessary to guard the secrecy of the formulas. . . . What may be","paragraph_id":"para_214"},{"text":"reasonable measures in one context may not necessarily be so in another.”). At the pleading","paragraph_id":"para_215"},{"text":"stage, then, it is sufficient that Appellants allege they protected the Proprietary Software","paragraph_id":"para_216"},{"text":"by requiring employees to sign the confidentiality agreement and Invention Provision","paragraph_id":"para_217"},{"text":"contained in the employment contract.3","paragraph_id":"para_218"},{"text":"B.","paragraph_id":"para_219"},{"text":"Having concluded that Appellants plausibly allege the existence of a trade secret,","paragraph_id":"para_220"},{"text":"we next consider whether they plausibly allege that Appellees misappropriated it. Relevant","paragraph_id":"para_221"},{"text":"here, the DTSA defines misappropriation as the “disclosure or use of a trade secret of","paragraph_id":"para_222"},{"text":"another” without consent by a person who, at the time of the use, “knew or had reason to","paragraph_id":"para_223"},{"text":"3 Appellees argue that the Complaint fails to allege that every person who had access","paragraph_id":"para_224"},{"text":"to the Proprietary Software was required to sign the employment contract. We reject that","paragraph_id":"para_225"},{"text":"argument because we can reasonably infer from the Complaint that the employment","paragraph_id":"para_226"},{"text":"contract applied to all employees.","paragraph_id":"para_227"},{"text":"USCA4 Appeal: 24-2173 Doc: 48 Filed: 11/18/2025 Pg: 10 of 12","paragraph_id":"para_228"},{"text":"11","paragraph_id":"para_229"},{"text":"know that the knowledge of the trade secret was . . . acquired under circumstances giving","paragraph_id":"para_230","court_paragraph":11},{"text":"rise to a duty to maintain the secrecy of the trade secret.” 18 U.S.C. § 1839(5).","paragraph_id":"para_231"},{"text":"The only question before us is whether the Complaint plausibly alleges that","paragraph_id":"para_232"},{"text":"Appellee’s disclosed or used the trade secret. Appellees argue it does not because, in their","paragraph_id":"para_233"},{"text":"view, the Complaint only includes a single conclusory allegation that they “[are] actively","paragraph_id":"para_234"},{"text":"using” the Proprietary Software to operate their new competing insurance company. J.A.","paragraph_id":"para_235"},{"text":"19. Not so.","paragraph_id":"para_236"},{"text":"As explained above, the Complaint alleges that Walker was hired as Sherbrooke’s","paragraph_id":"para_237"},{"text":"Chief Technology Officer for the purpose of “designing, creating, and maintaining” the","paragraph_id":"para_238"},{"text":"Proprietary Software. J.A. 17. The Complaint further alleges that “[t]he Proprietary","paragraph_id":"para_239"},{"text":"Software enabled Sherbrooke to, among other things, incorporate and utilize medical","paragraph_id":"para_240"},{"text":"records to project and predict risk values in pricing individual covered incidents more","paragraph_id":"para_241"},{"text":"effectively.” Id. at 18. And it alleges that the Proprietary Software “is used by Sherbrooke","paragraph_id":"para_242"},{"text":"to more accurately price insurance contracts for both existing and potential customers to","paragraph_id":"para_243"},{"text":"provide competitive and profitable insurance policies for Sherbrooke and its customers.”","paragraph_id":"para_244"},{"text":"Id. Additionally, the Complaint includes the following allegations:","paragraph_id":"para_245"},{"text":"49. Upon information and belief, in or around 2022, Defendant","paragraph_id":"para_246"},{"text":"Queen and Defendant Mayer began preparations to create a","paragraph_id":"para_247"},{"text":"corporate entity to compete with Sherbrooke and its corporate","paragraph_id":"para_248"},{"text":"affiliates. At some time thereafter, Defendant Walker joined","paragraph_id":"para_249"},{"text":"this scheme.","paragraph_id":"para_250"},{"text":"50. The purpose of this competing corporate entity is to provide","paragraph_id":"para_251"},{"text":"insurance policies to, among other companies, nursing","paragraph_id":"para_252"},{"text":"facilities across the United States. Therefore, Director and","paragraph_id":"para_253"},{"text":"Officer Defendants intend to directly compete for the same","paragraph_id":"para_254"},{"text":"USCA4 Appeal: 24-2173 Doc: 48 Filed: 11/18/2025 Pg: 11 of 12","paragraph_id":"para_255"},{"text":"12","paragraph_id":"para_256"},{"text":"companies or entities that Sherbrooke has always used as","paragraph_id":"para_257","court_paragraph":12},{"text":"clients.","paragraph_id":"para_258"},{"text":"55. Upon information and belief, Defendant Walker—in","paragraph_id":"para_259"},{"text":"coordination with Defendant Queen and Defendant Mayer—is","paragraph_id":"para_260"},{"text":"actively using confidential property of Sherbrooke, including","paragraph_id":"para_261"},{"text":"but not limited to the Proprietary Software to assist with","paragraph_id":"para_262"},{"text":"operating this new competing insurance entity.","paragraph_id":"para_263"},{"text":"Id. at 18–19.","paragraph_id":"para_264"},{"text":"Each of these allegations is relevant to Appellants’ misappropriation claim, and","paragraph_id":"para_265"},{"text":"together they tell the story of the alleged misappropriation. Much more than a bare","paragraph_id":"para_266"},{"text":"allegation of “use,” the Complaint explains that Walker created the Proprietary Software","paragraph_id":"para_267"},{"text":"and Queen and Mayer were shareholders, directors, and officers of Sherbrooke, such that","paragraph_id":"para_268"},{"text":"they knew about the Proprietary Software. The Complaint alleges that all three Appellees","paragraph_id":"para_269"},{"text":"created a competing business and used the Proprietary Software to assist that competing","paragraph_id":"para_270"},{"text":"business, rather than Sherbrooke. In the context of this alleged Propriety Software, we find","paragraph_id":"para_271"},{"text":"these allegations sufficient to state a claim for misappropriation. After all, what does one","paragraph_id":"para_272"},{"text":"do with a stolen competitive pricing software except “use” it, as alleged in this case, “to","paragraph_id":"para_273"},{"text":"assist with operating this new competing insurance entity”? 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