Court Opinion

ID: 9901076
Source: CourtListenerOpinion
Date Created: 2023-11-20 23:01:57.805397+00
Date Added: 2024-06-11T09:21:25.724803
License: Public Domain

Filed 11/20/23 (unmodified opinion attached)

                  CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                     FIRST APPELLATE DISTRICT

                               DIVISION FIVE

                                                A165378
 MATTSON TECHNOLOGY, INC.,                      (Alameda County
         Plaintiff and Appellant,               Super. Ct. No. 22CV007997)
 v.
                                                ORDER DENYING
 APPLIED MATERIALS, INC.,                       APPELLANT’S PETITION
         Defendant and Respondent.              FOR REHEARING AND
                                                MODIFYING OPINION
                                                [NO CHANGE IN JUDGMENT]
BY THE COURT:

         Appellant’s petition for rehearing is DENIED. The opinion
filed on November 1, 2023, shall be MODIFIED as follows:

      1. On page two, the following sentence in the third full
         paragraph (Background A.) is deleted:
            “Many were highly placed executives or engineers; 10
            were from Lai’s Dielectric Deposition Products group.”
         The sentence is replaced as follows:

            “Many were highly placed executives or engineers.”

      2. On page 10, the word “trial” is inserted into the first
         sentence of the first full paragraph so that the sentence
         reads as follows:
               “The trial court reasonably found otherwise.”

                                         1
   3. On page 10, the following sentence in the second full
      paragraph is deleted:
           “And he was one of numerous Applied employees
           Mattson had recently recruited, many of whom worked
           in an area it targeted for expansion and many of whom
           wiped their Applied phones before leaving and tried to
           conceal their new employer’s identity.”
       The sentence is replaced as follows:
           “And he was one of numerous Applied employees
           Mattson had recently recruited, many of whom wiped
           their Applied phones before leaving and tried to conceal
           their new employer’s identity.”

The modifications make no change to the judgment.

                                                                BURNS, J.

WE CONCUR:

JACKSON, P.J.
SIMONS, J.

Mattson Technology, Inc. v. Applied Materials, Inc. (A165378)

                                         2
Alameda County Superior Court, No. 22CV007997, Hon. Evelio
M. Grillo

Complex Appellate Litigation Group LLP, Rex Heinke and Ben
Feuer; Singer Cashman LLP, Adam S. Cashman, Benjamin L.
Singer, and Doug Tilley, for Plaintiff and Appellant.

King & Spalding LLP, Quyen L. Ta, Arwen R. Johnson, and
Suzanne E. Nero; James Pooley PLC, James Pooley; Gibson
Dunn, Blaine Evanson, for Defendant and Respondent.

                             3
Filed 11/1/23 (unmodified opinion)

                  CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                     FIRST APPELLATE DISTRICT

                               DIVISION FIVE

 MATTSON TECHNOLOGY, INC.,
        Plaintiff and Appellant,               A165378
 v.
 APPLIED MATERIALS, INC.,                      (Alameda County
        Defendant and Respondent.              Super. Ct. No. 22CV007997)

      After many years at Applied Materials, Inc. (Applied),
Canfeng Lai left for a new job at Mattson Technology, Inc.
(Mattson). First, however, he emailed himself a number of files
containing Applied trade secrets. Applied sued both Lai and
Mattson for violating the Uniform Trade Secrets Act (Civ. Code, §
3426 et seq.; the Act) 1 and, as against Lai, for breaching his
employment contract. The court granted Lai’s motion to compel
arbitration under the arbitration clause in his employment
contract but rejected Mattson’s claim that it, too, was entitled to
arbitrate. It then denied Mattson’s motion to stay the litigation
pending Lai’s arbitration and issued a preliminary injunction to
protect Applied’s confidential information pending the
proceedings.

      Mattson asserts all of these ruling were erroneous. We
agree only in part. The court correctly found that Mattson, as a
nonparty to Lai’s employment contract with Applied, could not
compel Applied to arbitrate against it. It also properly issued the

       1 Undesignated statutory references are to the Civil Code.

                                     1
preliminary injunction. However, it erred in declining to stay the
litigation against Mattson pending arbitration of its claims
against Lai.

                        BACKGROUND

                                A.

      After a 15-year stint with Applied ending in 2012, Lai
returned to work as an Electrical Engineering Director in its
Dielectric Deposition Products group from September 2018 to
February 2022. Lai’s group works on products used for
manufacturing semiconductor chips. His position gave him
access to many of Applied’s trade secrets, such as scientific and
experimentation data and 3D renderings of semiconductor
manufacturing tools. He also participated in highly confidential
meetings with his team, Applied executives, and other Applied
engineering groups.

       Mattson, a core subsidiary of Beijing E-Town
Semiconductor Technology Co., Ltd., is a direct competitor of
Applied. It, too, produces equipment for making semiconductor
chips and, in particular, for “etching” – the selective removal of
electrically insulating layers that had been added through a
process called deposition. While Mattson does not produce
equipment for deposition, Beijing E-Town publicly announced its
intention to expand into that market after acquiring Mattson in
2016.

       Over a 14-month period starting in January 2021, Mattson
recruited 17 of Applied’s employees. Many were highly placed
executives or engineers; 10 were from Lai’s Dielectric Deposition
Products group. Upon leaving Applied, most of them wiped and
restored their Applied iPhones to factory settings and evaded
telling Applied they were going to Mattson; some even lied about
their new employer’s identity.

                                2
      In early February 2022, Lai accepted a job offer from
Mattson. A week later he told Applied he was leaving, but, like
others before him, refused to identify his new employer at that
time.

      Before his last day at Applied, Lai accessed proprietary
information from Applied’s cloud-based storage system. Using
his laptop, he sent over a dozen e-mails attaching highly
confidential Applied documents—many of them clearly marked
as such—to two personal email accounts. Then, in his final days
at Applied, he accessed scores of additional highly sensitive files.
Nonetheless, he signed a separation certificate stating he had not
retained any Applied information and confirmed this in two
separate exit interviews (at which he acknowledged he was
leaving to join Mattson). Because he wiped his work phone
before returning it, Applied could not determine whether he had
used it to send himself additional material. After starting his
new job, Lai logged into both of his personal email accounts on
his Mattson computer.

      Lai admitted this conduct under penalty of perjury, and
that he had not been “forthcoming” about it during his exit
process. He had taken the documents, he explained, “principally
to keep ‘souvenirs’ of [his] accomplishments at the company,” not
to use or disclose any confidential Applied information in his new
job. Later, however, he admitted some of those “souvenirs” had
nothing to do with his work at Applied but did relate to his new
position at Mattson.

      Both defendants have consistently maintained that Lai
never disclosed any Applied information to Mattson. Mattson
denies any knowledge of or involvement in Lai’s actions.

                                 B.

      Applied sued Mattson and Lai and moved for a temporary
restraining order. The complaint stated two causes of action:

                                 3
misappropriation under the Act against both defendants, and, as
against Lai, breach of his employment agreement. The trial court
granted a temporary restraining order enjoining Mattson and Lai
from accessing, using, or altering any Applied trade secrets
pending further proceedings.

     Upon learning of the lawsuit, Lai immediately deleted the
emails he had sent to his Yahoo account. (He later explained he
would have done the same with his Gmail account if he had
remembered to.) Then, after communicating with Mattson’s
lawyers, he downloaded a confidential Applied document to his
Mattson laptop before deleting it a moment later.

      Shortly afterward, Mattson put Lai on leave and had a
forensic computer examiner cut off his access to both of his
personal email accounts and sequester his iPhone, his Mattson
and personal laptops, and his personal desktop computer.

      Mattson and Lai moved to compel arbitration and stay the
court proceedings based on the arbitration clause in the Applied-
Lai employment contract. The court granted the motion to
compel as to Applied’s action against Lai; denied it as to Mattson;
denied Mattson’s motion to stay the litigation pending
arbitration; and issued a preliminary injunction prohibiting Lai
and Mattson from accessing or using Applied’s confidential
information pending resolution of its claims.

                         DISCUSSION

                                A.

       Mattson is not a party to the arbitration agreement
between Lai and Applied. It contends, however, that principles of
equitable estoppel require Applied to arbitrate its
misappropriation claim against the company. The facts are not
in dispute, so we review the trial court’s denial of arbitration de
novo. (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 126; Thomas v.
Westlake (2012) 204 Cal.App.4th 605, 613.)
                                 4
       Generally, only signatories to a contract are bound by or
may invoke its arbitration clause. (Goldman v. KPMG, LLP
(2009) 173 Cal.App.4th 209, 234 (Goldman).) Arbitration is a
matter of contract, and the threshold question for a court is
whether an agreement between the parties exists. (Code Civ.
Proc., § 1281.2.)

      Equitable estoppel provides a limited exception to this
general rule. When a signatory to a contract asserts claims
against a non-signatory that rely upon, or are inextricably bound
up with, the contract terms, the non-signatory may invoke an
arbitration clause in the same contract. (Pacific Fertility Cases
(2022) 85 Cal.App.5th 887, 893; Goldman, supra, 173 Cal.App.4th
at pp. 219, 221-225.)

      This makes sense. As a matter of fairness, when a party to
a contract seeks to hold a non-signatory defendant liable for
obligations imposed by the contract, the party cannot evade an
arbitration clause in the contract simply because the defendant is
a non-signatory. (See Pacific Fertility Cases, supra, 85
Cal.App.5th at pp. 892-893; UFCW & Employers Benefit Trust v.
Sutter Health (2015) 241 Cal.App.4th 909, 929-930 (UFCW); DMS
Services, LLC v. Superior Court (2012) 205 Cal.App.4th 1346,
1354.) It’s a two-way street.

       Keeping this policy in mind helps define the limits of the
rule. It is not enough that a complaint simply refers to a
contract; the claims must be founded on the contract. (UFCW,
supra, 241 Cal.App.4th at pp. 930-931; Goldman, supra, 173
Cal.App.4th at pp. 218-219.) Nor is it sufficient that a complaint
alleges collusion between a signatory and non-signatory
defendant (Goldman, supra, at pp. 218-219), or that the
controversy would not have occurred but for the existence of the
contract, provided the contract is not the basis for the claims
against the non-signatory. (UFCW, supra, at p. 930; Pacific
Fertility, supra, 85 Cal.App.5th at p. 896) In these situations, the

                                 5
policy rationale for equitable estoppel—"relying on an agreement
for one purpose while disavowing the arbitration clause of the
agreement”—does not exist. (Goldman, supra, at p. 230.)

       Waymo LLC v. Uber Techs., Inc (N.D. Cal. 2017) 252
F.Supp.3d 934 (Waymo I), applied these principles to facts very
like those here. Levandowski, a former Waymo employee,
allegedly misappropriated Waymo trade secrets for the benefit of
a competitor, Uber. Waymo sued Uber under several state and
federal statutes, and it initiated arbitration proceedings against
Levandowski based on an arbitration provision in his
employment agreement (Id. at p. 936; Waymo LLC v. Uber
Techs., Inc. (Fed. Cir. 2017) 870 F.3d 1342, 1343-1344 (Waymo II)
[affirming Waymo I].)

       Uber moved to compel Waymo to arbitrate its claims
against the company as well. The federal court denied the
motion. Applying California law, it found those claims did not
rely on the terms of Levandowski’s employment contract; to the
contrary, Waymo expressly forswore reliance on the contract to
prove its misappropriation claims against Uber. (Waymo I,
supra, 252 F.Supp.3d at p. 938.) Waymo’s allegations of collusion
between Levandowski and Uber were also inadequate: “ ‘[i]t is
the relationship of the claims [to the contract], not merely the
collusive behavior of the signatory and nonsignatory parties, that
is key.’ ” (Id. at p. 939.) Finally, while the complaint referred to
Waymo’s contractual confidentiality provisions to demonstrate its
efforts to maintain secrecy (see Cypress Semiconductor Corp. v.
Superior Court (2008) 163 Cal.App.4th 575, 588 [trade secrets
lose protected status if owner does not take reasonable steps to
maintain secrecy]), the misappropriation claims themselves did
not rely on the contract. (Waymo I, supra, at p. 938, citing
Goldman, supra, 173 Cal.App.4th at p. 218; see also Waymo II,
supra, 870 F.3d at pp. 1346-1349.)

                                 6
       So too here. Applied alleges Mattson violated the Act by
knowingly misappropriating its confidential information. That
statutory claim exists without regard to Lai’s contractual
obligations to Applied, and, as in Waymo I, Applied has
disavowed any reliance on the contract to prove its case against
Mattson. (Waymo I, supra, 252 F.Supp.3d at p. 938; Goldman,
supra, 173 Cal.App.4th at pp. 219, 221.) As in Waymo I, the
complaint refers to Applied’s employment contracts (among other
policies and safeguards) to demonstrate its efforts to maintain
secrecy, but the claim against Mattson does not rely on the
contracts. Mattson points to the complaint’s allegation that
Mattson “knew or had reason to know” that the stolen
information was subject to ongoing confidentiality obligations,
but the complaint does not cite or rely on a contract for this
allegation; the same obligations arise from statutory and common
law. (See Lab. Code, § 2860; KGB, Inc. v. Giannoulas (1980) 104
Cal.App.3d 844, 855.) Accordingly, the policy rationale for
estoppel does not apply. Applied is not selectively enforcing
against Mattson the trade secret provisions of Lai’s employment
contract while trying to avoid its arbitration clause. (UFCW,
supra, 241 Cal.App.4th at p. 930.)

      Mattson’s remaining authorities are unpersuasive. In
Uptown Drug Co. v. CVS Caremark Corp. (N.D. Cal. 2013) 962
F.Supp.2d 1172, 1185-1186, the plaintiff’s claims against the non-
signatory did rely on its contract with the signatory defendant.
In Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486, 490, 497,
the court held that, unlike here, the plaintiff expressly agreed to
arbitrate the controversy with the non-signatory defendant. 2

      2 Other courts have disagreed with Felisilda on whether

the type of contract at issue (a sales contract with a car dealer)
includes warranties from the non-signatory car manufacturer,
and our Supreme Court has agreed to review the issue. (See, e.g.,
Montemayor v. Ford Motor Co. (2023) 92 Cal.App.5th 958, 968-
972, review granted Sept. 20, 2023, S281237; Ford Motor
                                7
Chartwell Staffing Servs. v. Atl. Solutions Grp, Inc. (C.D. Cal.,
Jan. 9, 2020, No. 8:19-cv-00642-JLS-JDE) 2020 WL 620294 has
been aptly criticized as misapplying California’s equitable
estoppel doctrine. (See Cisco Sys. v. Wilson Chung (N.D. Cal.
2020) 462 F.Supp.3d 1024, 1042.) Mattson cites other cases in
which there was either an agency relationship or virtual identity
between the signatory and non-signatory defendants. (See
Garcia v. Pexco, LLC (2017) 11 Cal.App.5th 782, 788 [agency
relationship between staffing agency and its client company;
plaintiff employee brought identical claims against both as “joint
employers”]; CardioNet, LLC v. InfoBionic, Inc. (D. Mass. Mar.
24, 2017, No. 1:15-cv-11803-IT) 2017 WL 1115153, *1 [former
employee sued for trade secret misappropriation was founder and
chief technology officer of non-signatory defendant]; Oren
Enterprises, Inc. v. Stefanie Cove & Co. (C.D. Cal. June 2, 2017,
No. CV 17-3619 PA (AFMx)) 2017 WL 8220230, *1 [one of two
former employees sued for misappropriation founded non-
signatory defendant company].) To the extent these cases
resemble this case, we decline to follow them.

      Finally, the trial court noted additional policy concerns
stemming from Mattson’s position: “Mattson’s argument, if
accepted, would be tantamount to holding that any company that
hired any person who signed an arbitration agreement with his
or her former employer could selectively and defensively assert
the arbitration agreement to deny access to the courts by an
aggrieved party who seeks to vindicate their statutory rights
under [the Act]. This would effectively mean that any disputes
between the former and the current employer would have to be
resolved in arbitration even though the former employer did not
agree to arbitrate any dispute with a third party,” and even
where, as here, the trade secret claim does not rely on the

Warranty Cases (2023) 89 Cal.App.5th 1324, 1333-1335, review
granted July 19, 2023, S279969.)
                                8
employment contract. Mattson offers no meaningful response to
this.

      We therefore affirm the order denying Mattson’s motion to
compel arbitration. We do not reach Applied’ s additional
argument that the arbitration agreement expressly excludes
parties other than Lai from its scope.

                                B.

      Next, Mattson argues the trial court erred in issuing the
preliminary injunction prohibiting it from accessing or using any
confidential information Lai took from Applied. Here, too, we are
unpersuaded.

       Trial courts evaluate two related factors to assess a request
for a preliminary injunction: (1) the likelihood the plaintiff will
prevail on the merits at trial, and (2) the likely interim harm to
the plaintiff without the injunction as compared to the harm to
the defendant with it. (Ryland Mews Homeowners Assn. v.
Munoz (2015) 234 Cal.App.4th 705, 711 (Ryland Mews).) On
appeal from the grant of an injunction, we review the court’s legal
determinations de novo and its factual findings for substantial
evidence, interpreting the evidence in the light most favorable to
the plaintiff and indulging in all reasonable inferences in support
of the trial court’s order. The ultimate decision rests in the trial
court’s discretion and will not be reversed unless it exceeds the
bounds of reason or contravenes uncontradicted evidence.
(Ryland Mews, supra, at pp. 711-712; Midway Venture LLC v.
County of San Diego (2021) 60 Cal.App.5th 58, 76-77.)

                                 1.

      Mattson asserts Applied failed to establish a likelihood of
prevailing against it on the merits because it offered no direct
evidence Mattson was involved in or aware of Lai’s misdeeds. In
Mattson’s view, rather, Applied could establish nothing more
than Lai’s acts, unconnected to any participation by his new
                                 9
employer. (See FLIR Systems, Inc. v. Parrish (2009) 174
Cal.App.4th 1270, 1279 [departing employee’s possession of trade
secrets alone is insufficient for injunctive relief].)

      The court reasonably found otherwise. The Act expressly
authorizes the enjoining of threatened, as well as actual,
misappropriation. (§ 3426.2, subd. (a); FLIR Systems, Inc. v.
Parrish, supra, 174 Cal.App.4th at p. 1279 [threatened
misappropriation is threat to misuse trade secrets manifested by
words or conduct, where evidence indicates imminent misuse].)
Threatened misappropriation may occur when trade secrets are
in the possession of someone who has misused or disclosed some
of those secrets in the past or who intends to do so. (Central
Valley General Hospital v. Smith (2008) 162 Cal.App.4th 501,
527-528.) Circumstantial proof is sufficient, and frequently
necessary, to prove this. (SI Handling Sys. v. Heisley (3d Cir.
1985) 753 F.2d 1244, 1261; see Ajaxo Inc. v. E*Trade Group Inc.
(2005) 135 Cal.App.4th 21, 50-53.)

      Applied provided such circumstantial proof. Starting the
day after accepting Mattson’s job offer, Lai accessed and sent
himself highly sensitive Applied information that would benefit
Mattson. He repeatedly lied to Applied about possessing its
information and wiped his phone, making it difficult or
impossible to confirm whether he had used it to send any Applied
data or documents. And he was one of numerous Applied
employees Mattson had recently recruited, many of whom worked
in an area it targeted for expansion and many of whom wiped
their Applied phones before leaving and tried to conceal their new
employer’s identity.

       Interpreting this evidence in the light most favorable to
Applied and indulging in all reasonable inferences in support of
the trial court’s order (Ryland Mews, supra, 234 Cal.App.4th at p.
712), the trial court’s evaluation of Applied’s likelihood of
successfully establishing Mattson was involved in at least

                               10
threatened misappropriation neither exceeded the bounds of
reason nor contravened uncontradicted evidence. (Id. at p. 711.)

                                  2.

       As to the second factor, the relative balance of harms,
Mattson asserts the preliminary injunction is (1) so broadly
worded that it “arguably” puts Mattson at risk of accidental
violations, or (2) improperly binds Lai’s hypothetical future
employers and other nonparties to this litigation. Mattson has
not identified, and we have not discovered, any point at which it
raised these issues in the trial court. It is not this court’s job to
search through the record in an effort to discover a point
purportedly made. (In re S.C. (2006) 138 Cal.App.4th 396, 406;
Berger v. Godden (1985) 163 Cal.App.3d 1113, 1117, fn. 2; Cal.
Rules of Court, rule 8.204(a)(1)(C).) Accordingly, the issue is
forfeited in this court. (Kern County Dept. of Child Support
Services v. Camacho (2012) 209 Cal.App.4th 1028, 1038.)

      Mattson’s assertion that the injunction may harm its
reputation by wrongly implying “some evidence exists that it
engaged in wrongdoing” is not persuasive. The point is so broad
it would apply equally any time a court temporarily enjoins any
potential misappropriation pending trade secret litigation. In
any event, it was within the court’s discretion to find on the
evidence presented in this case that the potential harm to
Applied from the disclosure or use of its trade secrets outweighed
the potential harm to Mattson’s reputation.

                                  C.

      Mattson’s contention that the court erred in declining to
stay the litigation against it pending the outcome of Applied’s
arbitration with Lai rests on firmer ground.

                                  11
      After the court declined to compel Applied to arbitrate with
Mattson, both defendants moved to stay the court proceedings
pending Lai’s arbitration. The court stayed the litigation against
Lai, but found Applied’s claim against Mattson was severable
from its claims against Lai and declined to stay it.

      Code of Civil Procedure section 1281.4 provides: “If a court
of competent jurisdiction. . . has ordered arbitration of a
controversy which is an issue involved in an action or proceeding
pending before a court of this State, the court . . . shall . . . stay
the action or proceeding until an arbitration is had in accordance
with the order to arbitrate.” The word “shall” is mandatory.
(Twentieth Century Fox Film Corp. v. Superior Court (2000) 79
Cal.App.4th 188, 192 (Twentieth Century Fox) [denial of motion to
stay exceeded court’s authority].) The purpose is to protect the
arbitrator’s jurisdiction by preserving the status quo until the
arbitration is resolved. (Federal Ins. Co. v. Superior Court (1998)
60 Cal.App.4th 1370, 1374)

       A “ ‘[c]ontroversy’ ” in this context is “any question arising
between parties to an agreement whether the question is one of
law or of fact or both.” (Code Civ. Proc., § 1280, subd. (d).) A
single overlapping question of law or fact may qualify as a
“controversy” sufficient to require imposition of a stay. (Heritage
Provider Network, Inc. v. Superior Court (2008) 158 Cal.App.4th
1146, 1152-1153; Cardiff Equities, Inc. v. Superior Court (2008)
166 Cal.App.4th 1541, 1552.) However, “[i]f the issue which is
the controversy subject to arbitration is severable,” the court has
the discretion to sever and stay proceedings on the arbitrable
claims and permit any nonarbitrable issues to proceed in court.
(Code Civ. Proc., § 1281.4; see Jarboe v. Hanlees Auto Group
(2020) 53 Cal.App.5th 539, 556; Heritage Provider Network, Inc.
v. Superior Court, supra, at p. 1153.) The party seeking
severance under Code of Civil Procedure section 1281.4 has the
burden of proving its claim is independent from the arbitrable

                                 12
matter. (Twentieth Century Fox, supra, 79 Cal.App.4th at p. 192;
Federal Ins. Co. v. Superior Court, supra, 60 Cal.App.4th at p.
1375.)

       The question, then, is whether Applied satisfied that
burden. We review the court’s determination for abuse of
discretion (Jarboe v. Hanlees Auto Group, supra, 53 Cal.App.5th
at p. 547), keeping in mind the scope of that discretion always
depends on the particular law being applied; decisions that
“transgress[] the confines of the applicable principles of law” are
beyond it. (City of Sacramento v. Drew (1989) 207 Cal.App.3d
1287, 1297.)

      We cannot agree that Applied’s claim against Mattson
under the Act is independent of the same claim against Lai. (See
Twentieth Century Fox, supra, 79 Cal.App.4th at p. 192.) The
complaint makes no attempt to distinguish the factual bases for
those claims; to the contrary, it relies on the same factual
allegations against both defendants to depict a scheme whereby
Mattson recruited Lai to provide it with Applied’s trade secrets.
For good reason. To prevail on its misappropriation claim
against Lai, Applied must prove he acquired its confidential
information by improper means. 3 (§ 3426.1, subds. (b)(1), (b)(2).)
To prevail against Mattson, Applied must essentially prove its
competitor obtained its confidential information from Lai with
actual or constructive knowledge that he obtained it improperly
(§ 3426.1, subd. (b)(1)) or that he owed Applied a duty to
maintain its secrecy (§ 3426.1, subd. (b)(2)(B)(iii)); or that
Mattson obtained the information by inducing Lai to breach that
duty of secrecy. (§ 3426.1, subds. (a), (b)(1).) The trade secret
claims against Lai and Mattson thus share common factual

      3 The statute defines improper means to include theft and

breach or inducement of a breach of a duty to maintain secrecy. (§
3426.1, subd. (a).)
                                 13
questions concerning Lai’s activities during his last week at
Applied and Mattson’s alleged involvement in them.

       Applied’s principal authority in support of severance,
Madden v. Kaiser Foundation Hospitals (1976) 17 Cal.3d 699, is
inapposite. There, a botched surgery necessitated transfusions of
what turned out to be contaminated blood, leading to a
malpractice action. (Id. at pp. 704-705.) The plaintiff was subject
to an arbitration agreement with the surgeon and hospital
defendants, but not with the co-defendant blood banks. (See
ibid.) In dictum, the Court observed the trial court was not
required to stay the litigation against the blood banks, but could
in its discretion sever the action as to them or limit any stay to
the arbitrable issues. (Ibid.) This is a far cry from suggesting
the non-signatory blood banks had a right to severance. In any
event, the Court did not even touch on whether the claims
against them shared common issues with the arbitrable claims
against the surgeon and hospital. Cases are not authority for
propositions not considered or issues not presented by their facts.
(McConnell v. Advantest America, Inc. (2023) 92 Cal.App.5th 596,
611.)

                                DISPOSITION

      The order denying Mattson’s motion for a stay pending
arbitration is reversed. The trial court’s orders are affirmed in all
other respects. Each party is to bear its own costs. (See Cal.
Rules of Court, rule 8.278(a)(3).)

                                                                BURNS, J.

WE CONCUR:

JACKSON, P.J.
SIMONS, J.
Mattson Technology, Inc. v. Applied Materials, Inc. (A165378)

                                        14
Alameda County Superior Court, No. 22CV007997, Hon. Evelio
M. Grillo

Complex Appellate Litigation Group LLP, Rex Heinke and Ben
Feuer; Singer Cashman LLP, Adam S. Cashman, Benjamin L.
Singer, and Doug Tilley, for Plaintiff and Appellant.

King & Spalding LLP, Quyen L. Ta, Arwen R. Johnson, and
Suzanne E. Nero; James Pooley PLC, James Pooley; Gibson
Dunn, Blaine Evanson, for Defendant and Respondent.

                             15