People v. Laiwala, 115 Cal. App. 4th 850, 9 Cal. Rptr. 3d 466 (2004)

Sadrudin Laiwala, a former engineer of Odeum Microsystems, a division of Hyundai Electronics America, allegedly copied and took with him a “DVD copy protection system” immediately prior to his departure from the company. Laiwala was criminally prosecuted for violation of California Penal Code Section 499c, which prohibits the theft of trade secrets. The Court of Appeal reversed the conviction on the ground that the prosecution had failed to prove that the “master key” (as opposed to the “DVD copy protection system”) that Laiwala had taken from Odeum was a trade secret because of the lack of evidence that the “master key” derived actual or potential “independent economic value” from “not being generally known to other persons who can obtain economic value from its disclosure.” Because the “master key” could have been deactivated by the licensor, there was no evidence that anyone other than Odeum could obtain any economic value from its use. The Court of Appeal declined to reduce the offense to an attempted theft of trade secret since there was no finding in the record that Laiwala had the specific intent to steal information that he believed to be a trade secret. Cf. DVD Copy Control Ass’n, Inc. v. Bunner, 31 Cal. App. 4th 864 (2004) (information that was widely known before preliminary injunction was granted was no longer a “trade secret”).