IP Law Daily, TRADE SECRETS—S.D. Cal.: Game company granted TRO barring sale or use of source code, (Mar 9, 2026)

By Kevin M. Finson, J.D.

The claimed secrets derived their value from not being generally known, constituted the bulk of the value of the company, and the attempted sale appeared to be in violation of statutory requirements.

A co-founder of a video game studio was entitled to a temporary restraining order preventing the company’s majority shareholder from selling the company’s assets, including confidential source code that qualified for trade secret protection, the federal district court in San Diego has held. The sale appeared to have been made in violation of Article 9 requirements for disposition of collateral, the court noted (Sharif v. Dawson, No. 3:26-cv-00965-LL-JLB (S.D. Cal. Mar. 4, 2026)).

Plaintiff Steven Sharif is a co-founder, shareholder, and former CEO of Intrepid Studios, Inc., a game studio developing a Massively Multiplayer Online Role-Playing Game known as Ashes of Creation. Defendant Robert Dawson was a lender to Intrepid and eventually became majority shareholder. Sharif alleged that Dawson and his associates devised a plan to take possession of Intrepid’s assets via a wrongful Article 9 foreclosure process by which they sold Intrepid’s assets to TFE Games Holdings, LLC without providing legally required notices to senior lienholders or publicly advertising the sale in any way. Sharif also alleged that Dawson and his associates planned to terminate all Intrepid employees. TFE and Dawson, along with his associates, were alleged to have been soliciting former employees to obtain access to Ashes of Creation and materials claimed as trade secret, including source code and game assets for sale to third parties. Sharif, both individually and derivatively on behalf of Intrepid, sued Dawson and TFE for violation of federal and state trade secrets acts, violation of Article 9 of the California Commercial Code, and related claims. Sharif sought a TRO to prevent the defendants from accessing, using, or selling the claimed trade secrets.

Likelihood of success on the merits. The court found that Sharif had at least shown serious questions going to the merits of his allegations as to the Article 9 claims, noting that the disposition of collateral did not appear commercially reasonable and was instead intended to limit notice of the sale to TFE, an entity controlled by Dawson, and to exclude other potential bidders. Likewise, the court found a likelihood of success on the trade secrets claims because the claimed secrets included “source code, algorithms, and technical implementation architecture” not known to the public and that were kept confidential, and because the acquisition of those items by an unlawful Article 9 foreclosure would be misappropriation.

Irreparable harm. The court found that the value of the trade secrets would be destroyed by their sale to a third party and that counsel for TFE had acknowledged that TFE was in discussions with at least one potential buyer. Accordingly, there was a risk of irreparable harm to Intrepid if its primary assets were sold.

Public interest. The court found the public’s interest in vindicating intellectual property rights weighed in favor of the TRO.

Balance of hardships. The court found that the balance of hardships tipped sharply toward Sharif because Intrepid stood to lose its primary valuable asset through the sale to TFE. A TRO to maintain the status quo until ownership could be resolved would not substantially harm Dawson or TFE.

The court granted the motion for a TRO and set the matter for a preliminary injunction hearing.

The Case is No. 3:26-cv-00965-LL-JLB.

Judge: Lopez, L.

Attorneys: Conte C. Cicala (Withers Bergman LLP) for Steven Sharif.

Cases: TradeSecrets TechnologyInternet CaliforniaNews