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Cadence Design Systems. v. Avant! Corp.

California Supreme Court

29 Cal. 4th 215 (2002)

Facts

In 1991, several key employees resigned from Cadence Design Systems, Inc. (Cadence) (plaintiff) and set up a rival software company, Avant! Corporation (defendant). In March 1994, Gerald Hsu joined Avant! after quitting Cadence. Cadence threatened to sue both Hsu and Avant! to prevent Hsu from disclosing any of Cadence’s trade secrets to Avant!. The parties reached an out-of-court settlement in June 1994 and signed a release discharging each other from any claims they had, or may have had, against each other as of the settlement date. In December 1995, Cadence discovered evidence that one of Avant!’s founders stole code from Cadence in 1991 and that Avant! was using that stolen code in its current software. Cadence sued Avant! for trade-secret misappropriation. The federal district court granted Avant!’s motion for summary judgment on the grounds that the 1994 release barred Cadence’s suit. Cadence appealed. Because the central issue on appeal posed a question of state law, the Ninth Circuit certified that question to the California Supreme Court.

Rule of Law

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Issue

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Holding and Reasoning (Moreno, J.)

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A "yes" or "no" answer to the question framed in the issue section;
A summary of the majority or plurality opinion, using the CREAC method; and
The procedural disposition (e.g., reversed and remanded, affirmed, etc.).

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