IP Law Daily, TRADE SECRETS—D. Del.: Dismissal granted in data security software dispute, (Feb 12, 2026)
Law Firms Mentioned:Reed Smith LLP | Young, Conaway, Stargatt & Taylor LLP
Organizations Mentioned:Cyera US Inc. | Potter Anderson & Corroon, LLP | Reed Smith, LLP | Varonis Systems, Inc. | Young Conaway Stargatt Taylor, LLP
By Kevin M. Finson, J.D.
Claims for misappropriation of trade secrets failed because the complaint identified the claimed secrets only as very broad categories of information, failing to put the defendants on notice of what exactly they were accused of misappropriating.
A software company failed to state a claim for misappropriation of trade secrets against former employees and their new employer, the U.S. District Court in Wilmington has held. The allegations failed to identify the claimed secrets with sufficient particularity (Varonis Systems, Inc. v. Guanciale, No. 1:25-cv-00571-GBW (D. Del. Feb. 10, 2026)).
Varonis Systems, Inc. (Varonis) is a software company in the business of providing data security. Varonis employed Matthew Guanciale and David Schmid, who both eventually left Varonis to begin working for Cyera US, Inc. (Cyera), a competitor to Varonis. Varonis brought suit against Guanciale, Schmid, and Cyera for violation of non-compete agreements, inevitable disclosure of trade secrets, and intentional interference with the non-compete agreements by Cyera. Varonis sought a preliminary injunction as well as expedited discovery; the parties filed a request that the court adopt a proposed scheduling order, and each of the defendants filed a motion to dismiss. The court took up the motion to dismiss.
Trade secrets. All three defendants argued that Varonis had failed to identify its claimed trade secrets with sufficient particularity. The court found that the categories of trade secret identified in the complaint were “current and prospective customer details, business arrangements, price strategies, product information, product development roadmaps, product integration capabilities, procedures and protocols for providing technical support and after-sales services, marketing strategies, and importantly, competitive analyses.” These were so broad that the court considered them to be essentially meaningless, finding that they did not provide any guidance as to the nature of the trade secrets. This did not meet the pleading requirement of providing notice to the defendants of what they were accused of misappropriating.
The court granted the motion to dismiss as to the federal trade secrets claims and exercised its discretion to decline supplemental jurisdiction over the remaining state law claims, rendering the remaining motions moot. Leave was granted to Varonis to file an amended complaint.
The Case is No. 1:25-cv-00571-GBW.
Judge: Williams, G.
Attorneys: Timothy Ryan Dudderar (Potter Anderson & Corroon, LLP) for Varonis Systems, Inc. Mary Frances Dugan (Young, Conaway, Stargatt & Taylor LLP) for Matthew Guanciale. Brian M. Rostocki (Reed Smith LLP) for Cyera US Inc.
Companies: Varonis Systems, Inc.; Cyera US Inc.
Cases: TradeSecrets DelawareNews