USA – DELAWARE Trends and Developments Contributed by: Travis S. Hunter, Richards, Layton & Finger PA
that because plaintiff was only requesting an injunc - tion, it failed to state a claim for violation of the DTSA because “[t]he DTSA does not allow for injunctions to prevent a person from entering into an employment relationship and requires that conditions placed on such employment be based on evidence of threatened misappropriation and not merely on the information the person knows”. Id. at *6 (cleaned up). Because plaintiff’s DTSA claim was its only federal claim, the District Court further found that it did not have juris - diction over the state law claims and dismissed them without prejudice. Id at *7. This appears to have been the first case in Delaware to consider whether the inevitable disclosure doctrine can support a trade secret claim. JPMorgan Chase Bank, Nat’l Ass’n v Argus Info. & Advisory Servs. Inc., 765 F. Supp. 3d 367 (D. Del. 2025) In JP Morgan , plaintiff sued defendants Argus and its parent companies Verisk and TransUnion for trade secret misappropriation under both the DTSA and DUTSA. Argus, a third-party intermediary between banks and regulators, had allegedly been taking data that JP Morgan was sending to federal regulars and using it for benchmarking studies that JP Morgan had explicitly opted out of. Id. at 373. Defendants moved to dismiss, challenging standing and arguing that JP Morgan had failed to state a claim. After deciding that JP Morgan had standing, the Court denied the motion to dismiss as to the federal DTSA claim but granted it as to the state DUTSA claim. Id. at 376-81. Looking at the DTSA, the court found that JP Morgan stated a claim because it successfully alleged a trade secret, that it created such trade secret from interstate data and used it nationally, and because it alleged that defendant misappropriated such data. Id. at 375. On the last point, defendants claimed that because the contracts Argus had with the regulators “created a duty to the government not to misuse the data, they insist JPMorgan must show that Argus owed it a duty”. Id. However, the court dispelled this interpreta - tion, clarifying that “[i]t is enough if the defendant had ”a duty to maintain the secrecy of the trade secret or limit [its] use”. 18 U.S.C. § 1839 (5)(B)(ii)(II) (empha - sis added). That duty need not have been owed to the plaintiff. I will not add words to the statute that
Congress chose not to”. Id. The court also found that JP Morgan had the right to sue under the DTSA, as it was the trade secret’s owner, and Argus’s contracts with federal regulators did not give Argus any rights in JP Morgan’s data or trade secrets beyond merely conveying them to regulators. Id. at 376-77. The court also denied the motion to dismiss as to defendants Verisk and TransUnion, finding that JP Morgan plausibly alleged their misappropriation of the trade secrets, although the misappropriation claim against TransUnion was “thin”. Id. at 381-82. As to the DUTSA claim, the court found that JP Mor - gan failed to allege that any misappropriation hap - pened in Delaware, which is fatal to any DUTSA claim. “Delaware courts do not apply the Delaware Act when the misappropriation happened in another state”. Id. at 380. The court dismissed the state DUTSA claim with leave to amend “to add a claim under a state law that reaches defendants’ conduct or to allege facts to which the Delaware Act would apply”. Id. at 381. Looking Ahead: Emerging Issues in Trade Secret Protection Emerging technologies are likely to present new chal - lenges for trade secret protection. In particular, the increasing use of artificial intelligence raises questions that courts have not yet fully addressed. AI and trade secret risk Businesses are already facing situations where employees use AI tools in ways that may create trade secret risks. For example, an employee might input proprietary information – such as source code or product specifications – into a generative AI platform to generate insights, troubleshoot an issue, or stream - line a task, without considering whether that informa - tion may be retained or used in a way that undermines its confidentiality. If the platform learns from or retains that input, the company may lose control over whether the information remains confidential. Whether such conduct results in the loss of trade secret protection is an open question. Courts have not yet squarely addressed how the use of AI tools affects the requirement that a trade secret be subject to reasonable efforts to maintain its secrecy. However,
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