1008-00005 · Lumos Analytics Inc · Pleadings

memo-points-authorities-pi.docx DOCUMENT Litigation

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SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SANTA CLARA

LUMOS ANALYTICS INC., a Delaware corporation,

Plaintiff,

NOVASPARK TECHNOLOGIES INC., a Delaware corporation; RAJIV ANAND, an individual; SERENA MALLICK, an individual; DEREK YUN, an individual,

Defendants.

Case No. 23-CV-004871

Assigned for All Purposes to the Honorable David Rutherford

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

Hearing Date: To be set by the Court Time: To be set by the Court Dept.: To be set by the Court

Filed Concurrently With:

• Ex Parte Application for Temporary Restraining Order

• Declaration of Priya Chandrasekaran in Support of Plaintiff's Motion for Preliminary Injunction

• Declaration of Rachel Fong in Support of Plaintiff's Motion for Preliminary Injunction

• [Proposed] Order Granting Preliminary Injunction

CALDERWOOD & HARKNESS LLP 555 California Street, 40th Floor San Francisco, California 94104 Telephone: (415) 555-7200 Facsimile: (415) 555-7201

Marcus Delgado (SBN 198472) Catherine Bloom (SBN 214836) Wendy Schultz (SBN 287593) Omar Siddiqui (SBN 312748)

Attorneys for Plaintiff LUMOS ANALYTICS INC.

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TABLE OF AUTHORITIES

Cases

Statutes

Secondary Sources

I. INTRODUCTION

Plaintiff Lumos Analytics Inc. ("Lumos" or "Plaintiff") respectfully submits this Memorandum of Points and Authorities in support of its Motion for Preliminary Injunction against Defendants NovaSpark Technologies Inc. ("NovaSpark"), Rajiv Anand ("Anand"), Serena Mallick ("Mallick"), and Derek Yun ("Yun") (collectively, "Defendants"). This motion arises from a brazen and coordinated scheme by three former senior engineers to steal Lumos's most valuable proprietary technology and use it to build a competing startup overnight.

Lumos is a Delaware-incorporated, California-headquartered software-as-a-service ("SaaS") company specializing in AI-driven financial analytics for institutional asset managers. Founded in approximately 2017 and headquartered at 4700 Orchard Parkway, Suite 300, San Jose, California 95134, Lumos employs approximately 340 people and generated approximately $67 million in annual recurring revenue ("ARR") in 2022. Lumos has raised $185 million in venture funding through its Series D round, a trajectory that reflects the exceptional value and promise of its proprietary technology. These funding milestones include a $40 million Series B round led by Ridgeline Ventures in 2019 and a $72 million Series D round led by Northstar Growth Equity in June 2022. Lumos's flagship product, "LumosEdge," employs proprietary ensemble machine-learning models to generate predictive signals for equity and fixed-income portfolio optimization — a technology developed over years and at the cost of tens of millions of dollars of investment.

This case concerns the systematic theft of Lumos's crown jewels by three former senior engineers — Anand, Mallick, and Yun — who departed Lumos in rapid succession in late September through October 2022, exfiltrating massive quantities of Lumos's most sensitive proprietary materials as they walked out the door. Within days of his resignation, Anand incorporated NovaSpark Technologies Inc. on October 3, 2022, in Delaware. NovaSpark is headquartered at 88 Bluxome Street, Floor 4, San Francisco, California 94107, and purports to offer AI-driven alternative-data analytics for hedge funds and proprietary trading desks — a market that directly and substantially overlaps with Lumos's core LumosEdge offering. Mallick and Yun followed Anand to NovaSpark within days of their own resignations, assuming the roles of Vice President of Engineering and founding engineer, respectively. NovaSpark received $12 million in seed funding from Blackpine Capital Partners LP on November 15, 2022, barely six weeks after its incorporation — a fact that is inexplicable absent the use of Lumos's stolen technology as a foundation for NovaSpark's pitch to investors.

The evidence demonstrates that, before and during their departures, each Defendant exfiltrated Lumos's most sensitive proprietary materials — including model architecture specifications, codebases, training data, feature-engineering libraries, and confidential product roadmap documents — in flagrant violation of their Proprietary Information and Inventions Assignment Agreements ("PIIAAs") and the restrictive covenant provisions contained therein. The exfiltration was not incidental or accidental. It was targeted, systematic, and precisely calibrated to allow Defendants to replicate Lumos's core technology at NovaSpark with minimal independent effort.

Lumos seeks a preliminary injunction to halt the ongoing and imminent misappropriation of its trade secrets and to enforce Defendants' contractual obligations. This memorandum demonstrates that Lumos satisfies all four factors governing the issuance of preliminary injunctive relief under California law:

First, Lumos has a strong likelihood of prevailing on the merits of each of its five causes of action: (1) trade secret misappropriation under the California Uniform Trade Secrets Act ("CUTSA"), Cal. Civ. Code §§ 3426–3426.11; (2) breach of contract; (3) breach of the duty of loyalty; (4) unfair business practices under California Business and Professions Code § 17200; and (5) conversion.

Second, Lumos will suffer irreparable harm absent an injunction. The competitive advantage conferred by Lumos's trade secrets — the product of years of research, development, and investment — is being permanently eroded with each passing day that Defendants are free to use Lumos's proprietary technology at NovaSpark.

Third, the balance of hardships tips decidedly in Lumos's favor. The injunction would merely require Defendants to comply with the contractual obligations they freely assumed when they signed their PIIAAs, while denial of the injunction would result in the permanent destruction of trade-secret protections that Lumos can never recover.

Fourth, the public interest strongly supports issuance of the injunction. California has a robust public policy in favor of protecting trade secrets, and the technology innovation ecosystem depends on the enforceability of intellectual property protections.

This memorandum is filed concurrently with Lumos's Ex Parte Application for a Temporary Restraining Order, the Declaration of Priya Chandrasekaran (Lumos's Chief Executive Officer), and the Declaration of Rachel Fong (Lumos's Vice President of Engineering), each of which provides detailed factual support for the relief requested herein.

II. STATEMENT OF FACTS

A. Lumos Analytics Inc. and Its Proprietary Technology

Lumos Analytics Inc. develops and markets LumosEdge, an AI-driven financial analytics platform used by institutional asset managers to generate predictive signals for equity and fixed-income portfolio optimization. (Declaration of Priya Chandrasekaran ("Chandrasekaran Decl.") ¶¶ 3–5.) Founded in approximately 2017, Lumos is led by Chief Executive Officer Priya Chandrasekaran, General Counsel Thomas Brightwell, and Vice President of Engineering Rachel Fong. (Chandrasekaran Decl. ¶ 2.) Since its founding, Lumos has grown to approximately 340 employees and generated approximately $67 million in annual recurring revenue in 2022. (Chandrasekaran Decl. ¶ 6.) Lumos has raised $185 million in venture funding through its Series D round, reflecting the extraordinary value investors place on Lumos's proprietary technology. (Chandrasekaran Decl. ¶ 7.)

At the core of Lumos's business are five categories of trade secrets, each of which represents the product of years of intensive research, development, and investment:

1. LumosEdge Ensemble ML Model Architecture. The LumosEdge platform relies on a proprietary neural-network topology and hyperparameter configuration developed iteratively over multiple years of experimentation and refinement. The model architecture reflects the collective expertise of Lumos's machine-learning engineering team and embodies fundamental design choices — including layer structure, activation functions, regularization strategies, and ensemble-weighting methodologies — that are not publicly known and cannot be reverse-engineered from the platform's outputs. The model architecture is the single most valuable technical asset in Lumos's portfolio. (Declaration of Rachel Fong ("Fong Decl.") ¶¶ 8–12.)

2. Proprietary Feature-Engineering Libraries. Lumos has developed feature-engineering libraries containing 2,847 individual engineered features for financial signal generation. Each feature represents a carefully designed transformation of raw financial and alternative data into a structured input suitable for the LumosEdge model. The selection, design, and calibration of these features reflects years of domain expertise at the intersection of machine learning and quantitative finance. These libraries are maintained in a restricted internal repository and are not accessible outside of Lumos's engineering organization. (Fong Decl. ¶¶ 13–17.)

3. DataStream ETL Pipeline Codebase. Lumos's proprietary extract, transform, load ("ETL") pipeline codebase — internally referred to as "DataStream" — is the backbone of Lumos's data infrastructure. The DataStream pipeline handles data ingestion from 43 alternative-data vendors, each requiring custom integration code, schema definitions, data-quality checks, and normalization routines. The codebase represents thousands of engineering hours and embodies proprietary logic for handling the unique characteristics, update cadences, and data formats of each vendor. (Fong Decl. ¶¶ 18–22.)

4. Curated Training Dataset. Lumos maintains a curated training dataset of approximately 14.6 terabytes of historical financial and alternative data, which has been carefully assembled, cleaned, labeled, and validated over the course of several years. The dataset includes proprietary labels derived from Lumos's backtesting framework, making it irreplaceable and impossible to reconstruct without Lumos's historical labeling methodology. The quality and comprehensiveness of this training dataset are a critical differentiator for LumosEdge. (Fong Decl. ¶¶ 23–26.)

5. Confidential Product Roadmap. Lumos maintains a confidential product roadmap for 2023–2025, including a detailed 37-page PDF document titled "LumosEdge 3.0 Product Roadmap," which contains unreleased specifications, planned feature enhancements, new product offerings, market expansion strategies, and strategic competitive positioning. This document was circulated internally on a strictly need-to-know basis and marked as "CONFIDENTIAL — INTERNAL USE ONLY." (Fong Decl. ¶¶ 27–29; Chandrasekaran Decl. ¶¶ 15–17.)

Lumos invested years and tens of millions of dollars developing these proprietary assets. The technology described above represents the core competitive advantage of Lumos Analytics Inc. and is the foundation upon which Lumos has built its $67 million ARR business. (Chandrasekaran Decl. ¶ 8.) The loss or compromise of any one of these five categories of trade secrets would materially impair Lumos's ability to compete and would undermine the value of the investment made by Lumos's employees, management, and investors. (Chandrasekaran Decl. ¶¶ 9–11.)

B. The Individual Defendants and Their Access to Lumos's Trade Secrets

Each of the three individual Defendants held a senior engineering position at Lumos and, by virtue of those roles, enjoyed broad access to Lumos's most sensitive proprietary information.

Rajiv Anand. Anand, age 37, served as Lumos's Principal Engineer — ML Infrastructure from March 2019 until his resignation on September 30, 2022 — a tenure of approximately three and one-half years. (Chandrasekaran Decl. ¶ 19.) In this role, Anand was one of the key architects of the LumosEdge signal-generation engine. He had full access to Lumos's most sensitive proprietary codebases, the LumosEdge ensemble ML model architecture, the hyperparameter configuration files, and the curated training dataset. (Fong Decl. ¶ 31.) Anand also had access to the confidential LumosEdge 3.0 Product Roadmap by virtue of his participation in Lumos's cross-functional product-planning meetings. (Chandrasekaran Decl. ¶ 20.) Anand was compensated with a base salary of $265,000, an annual performance bonus, and stock options representing 0.35% of Lumos's fully diluted equity. (Chandrasekaran Decl. ¶ 21.)

Serena Mallick. Mallick, age 34, served as Lumos's Senior Software Engineer — Data Pipelines from June 2020 until her resignation on October 14, 2022 — a tenure of approximately two years and four months. (Chandrasekaran Decl. ¶ 22.) In this role, Mallick was primarily responsible for building and maintaining the proprietary DataStream ETL pipelines, including the custom integration code for each of the 43 alternative-data vendors. She had root-level access to the DataStream code repository, the schema definitions, and the data-quality validation logic. (Fong Decl. ¶ 33.) Mallick was compensated with a base salary of $210,000, an annual performance bonus, and stock options. (Chandrasekaran Decl. ¶ 23.)

Derek Yun. Yun, age 31, served as Lumos's Machine Learning Engineer II from January 2021 until his resignation on October 21, 2022 — a tenure of approximately one year and nine months. (Chandrasekaran Decl. ¶ 24.) In this role, Yun had direct access to the proprietary training datasets, the model hyperparameters, and the feature-engineering libraries. He was responsible for developing and refining machine-learning model-training scripts and participated in experiments that involved the full breadth of Lumos's proprietary ML infrastructure. (Fong Decl. ¶ 35.) Yun was compensated with a base salary of $185,000, an annual performance bonus, and stock options. (Chandrasekaran Decl. ¶ 25.)

Each of these individuals occupied a position of trust within Lumos's engineering organization and was given access to proprietary technology on the understanding — memorialized in their PIIAAs — that such information would be used solely for Lumos's benefit and would be returned or destroyed upon the termination of employment.

C. The PIIAA and Restrictive Covenant Obligations

As a condition of employment, each Defendant executed Lumos's standard Proprietary Information and Inventions Assignment Agreement ("PIIAA"). (Chandrasekaran Decl. ¶ 26; Fong Decl., Exs. E, F, G (executed PIIAAs for Anand, Mallick, and Yun, respectively).) The PIIAA is a comprehensive agreement designed to protect Lumos's proprietary information and to ensure that employees understand and agree to their obligations with respect to Lumos's trade secrets and intellectual property.

The PIIAA contains the following restrictive covenant provisions, among others:

(a) Assignment of All Inventions. Each Defendant agreed to assign to Lumos all right, title, and interest in and to any inventions, developments, improvements, or discoveries made during the term of employment that relate to Lumos's business or result from the use of Lumos's resources. (PIIAA § 3.)

(b) Confidentiality and Non-Disclosure. Each Defendant agreed not to use or disclose any Lumos proprietary information, both during and after employment, for any purpose other than the performance of duties for Lumos. This obligation survives termination of employment for a period of three years. (PIIAA § 2.)

(c) Non-Solicitation of Employees. Each Defendant agreed not to solicit, recruit, or induce any Lumos employee to leave Lumos's employment for a period of twelve months following the termination of the Defendant's employment with Lumos. (PIIAA § 5.)

(d) Covenant Not to Use or Disclose Trade Secrets. Each Defendant agreed not to use or disclose Lumos's trade secrets at any time, without limitation. This obligation is not time-limited and continues indefinitely. (PIIAA § 2(b).)

The PIIAA further requires that, upon termination of employment, each employee must return all company materials — including documents, files, data, devices, and media — and must certify in writing that no copies of proprietary information have been retained. (PIIAA § 6.) None of the three Defendants returned company materials or confirmed the deletion of Lumos proprietary information upon their departures. (Chandrasekaran Decl. ¶ 28; Fong Decl. ¶ 38.) Lumos's Human Resources department sent written reminders to each Defendant following their resignations, and none responded. (Chandrasekaran Decl. ¶ 29.)

D. The Coordinated Departures and Formation of NovaSpark

The timeline of events reveals a carefully orchestrated scheme by Defendants to leave Lumos, form a competing enterprise, and immediately begin exploiting Lumos's proprietary technology:

• September 30, 2022: Rajiv Anand submits his resignation from Lumos, effective immediately. He provides no advance notice, despite Lumos's standard practice of requesting a minimum of two weeks' notice. (Chandrasekaran Decl. ¶ 30.)

• October 3, 2022: Anand incorporates NovaSpark Technologies Inc. in Delaware (Delaware File Number 7294183) — just three days after his resignation from Lumos. (Chandrasekaran Decl. ¶ 31; Fong Decl., Ex. H (Delaware Division of Corporations certificate of incorporation).)

• October 14, 2022: Serena Mallick submits her resignation from Lumos, also effective immediately and without advance notice. (Chandrasekaran Decl. ¶ 32.)

• October 17, 2022: Mallick begins employment at NovaSpark in the position of Vice President of Engineering — just three days after her resignation from Lumos. (Chandrasekaran Decl. ¶ 33.)

• October 21, 2022: Derek Yun submits his resignation from Lumos, also effective immediately and without advance notice. (Chandrasekaran Decl. ¶ 34.)

• October 24, 2022: Yun begins employment at NovaSpark as a founding engineer — just three days after his resignation from Lumos. (Chandrasekaran Decl. ¶ 35.)

• November 15, 2022: NovaSpark closes a $12 million seed funding round from Blackpine Capital Partners LP (Managing Partner: Franklin Osei). (Chandrasekaran Decl. ¶ 36.)

NovaSpark's Chief Executive Officer is Defendant Rajiv Anand. NovaSpark's federal Employer Identification Number is 88-3291047. (Chandrasekaran Decl. ¶ 37.)

The rapid, sequential nature of the departures and the near-immediate incorporation of a directly competing startup strongly suggest premeditated, coordinated action that was planned while Defendants were still employed at Lumos. The three-day interval between each Defendant's resignation and either the incorporation of NovaSpark (in Anand's case) or the commencement of employment at NovaSpark (in the cases of Mallick and Yun) is not a coincidence. It reflects a concerted plan to extract maximum value from Lumos's proprietary technology before departing and to deploy that technology immediately in a competing venture. (Chandrasekaran Decl. ¶ 38.)

E. Evidence of Exfiltration of Lumos Trade Secrets

On December 12, 2022, Lumos's IT security team — led by Lumos's Director of Information Security, Michael Tran — identified anomalous data-exfiltration activity in the system logs corresponding to the final weeks of each Defendant's employment. (Fong Decl. ¶ 40.) Lumos employs enterprise data-loss-prevention ("DLP") software that monitors file transfers, email attachments, USB device connections, and cloud-storage synchronization activity across the company network. While Lumos's DLP system generates alerts in real time, the alerts generated by Defendants' exfiltration activity were not initially flagged for review due to a backlog in the security operations queue. Upon investigation in December 2022, the following specific exfiltration events were confirmed:

1. Rajiv Anand — September 26, 2022 (four days before resignation). On this date, Anand transferred approximately 3.2 gigabytes of files from Lumos's internal network to a personal Hollowell Health IT account (account identifier: r.anand.personal@Northgate Software.com). The transferred files included model architecture specifications, hyperparameter configuration files, and internal technical documentation for the LumosEdge ensemble ML model. The transfer was executed through the Hollowell Health IT desktop synchronization client installed on Anand's Lumos-issued laptop (asset tag LUM-ENG-4271). This transfer was not authorized by Lumos and was not performed in connection with any Lumos business purpose. (Fong Decl. ¶ 42; Fong Decl., Ex. A (DLP log excerpts showing file transfer details, timestamps, and file names).)

2. Rajiv Anand — September 28, 2022 (two days before resignation). On this date, Anand accessed the confidential 37-page "LumosEdge 3.0 Product Roadmap" PDF from Lumos's restricted product-planning Aldermere Systems site and forwarded it as an email attachment to his personal email address, r.anand.personal@vaultmail.com. The email was sent at 11:47 p.m. Pacific Time. The Product Roadmap document was marked "CONFIDENTIAL — INTERNAL USE ONLY" and contained unreleased product specifications for 2023–2025, including planned feature enhancements, new product modules, and competitive positioning strategies. This transfer was not authorized by Lumos and was not performed in connection with any Lumos business purpose. (Fong Decl. ¶ 43; Fong Decl., Ex. B (email server log showing sender, recipient, attachment hash, and timestamp).)

3. Serena Mallick — October 10, 2022 (four days before resignation). On this date, Mallick connected a personal external USB hard drive (serial number WD-4837291) to her Lumos-issued workstation (asset tag LUM-ENG-5118) and cloned the entire DataStream ETL pipeline repository — approximately 780 megabytes of source code, configuration files, schema definitions, data-quality validation routines, and vendor-specific integration modules. The USB connection event was logged by Lumos's endpoint-detection software at 8:23 p.m. Pacific Time, well outside normal business hours. This transfer was not authorized by Lumos, and the use of personal USB storage devices is expressly prohibited by Lumos's Information Security Policy (Rev. 4.2, effective March 1, 2022). (Fong Decl. ¶ 44; Fong Decl., Ex. C (endpoint-detection log showing USB device serial number, connection timestamp, and volume of data transferred).)

4. Derek Yun — October 18, 2022 (three days before resignation). On this date, Yun downloaded 47 proprietary Jupyter notebooks from Lumos's internal machine-learning experimentation platform to a personal Larkspur Technologies account (account identifier: derekyun.personal@Larkspur Technologies.com). The downloaded notebooks contained feature-engineering code, model-training scripts, hyperparameter tuning results, and experimental logs documenting the evolution of the LumosEdge model. The download was executed via the Larkspur Technologies desktop synchronization client at 10:14 p.m. Pacific Time. This transfer was not authorized by Lumos and was not performed in connection with any Lumos business purpose. (Fong Decl. ¶ 45; Fong Decl., Ex. D (DLP log excerpts showing file names, transfer timestamps, and destination account).)

Each of these transfers was unauthorized. Each violated the transferring Defendant's PIIAA obligations, including the confidentiality and non-disclosure provisions and the prohibition on removing company materials from Lumos's premises or systems. (Fong Decl. ¶ 46.) The pattern is unmistakable: each Defendant engaged in targeted exfiltration of the specific proprietary materials to which they had access by virtue of their engineering role, timed to the final days before their pre-planned resignations.

As of the date of this filing, none of the Defendants has returned any of the exfiltrated materials, and none has responded to Lumos's written demands for the return of proprietary information sent by Lumos's General Counsel, Thomas Brightwell, on November 18, 2022 and December 20, 2022. (Chandrasekaran Decl. ¶ 39.)

F. NovaSpark's Directly Competing Product

NovaSpark purports to offer AI-driven alternative-data analytics for hedge funds and proprietary trading desks. (Chandrasekaran Decl. ¶ 40.) Based on publicly available information — including NovaSpark's website, social media presence, and press coverage of the Blackpine Capital Partners LP seed round — NovaSpark's product offering directly and substantially overlaps with Lumos's core LumosEdge platform. Both companies target institutional investors seeking AI-powered analytics for portfolio optimization; both companies rely on machine-learning models applied to alternative data sources; and both companies serve the same customer base of hedge funds, proprietary trading desks, and institutional asset managers. (Chandrasekaran Decl. ¶¶ 41–43.)

NovaSpark's ability to secure $12 million in seed funding from Blackpine Capital Partners LP within approximately six weeks of incorporation — and before having any independently developed product of record — strongly suggests that Defendants leveraged Lumos's proprietary technology to accelerate development and to provide potential investors with a compelling demonstration of technical capability. (Chandrasekaran Decl. ¶ 44.) It is simply not plausible that three engineers, no matter how talented, could have independently developed a credible AI-driven financial analytics product in the span of weeks without relying on the proprietary materials they exfiltrated from Lumos. (Fong Decl. ¶ 48.)

NovaSpark's ongoing product development, using personnel who are in possession of Lumos's most sensitive trade secrets, poses an ongoing and imminent threat of further use and disclosure of those trade secrets. The harm to Lumos compounds with each day that passes without judicial intervention.

III. LEGAL STANDARD FOR PRELIMINARY INJUNCTION

Under California law, a trial court evaluates two interrelated factors in determining whether to issue a preliminary injunction: "(1) the likelihood that the plaintiff will prevail on the merits, and (2) the relative balance of harms that is likely to result from the granting or denial of interim injunctive relief." IT Corp. v. County of Imperial (1983) 35 Cal.3d 63, 69–70; see also Cal. Code Civ. Proc. § 527. These factors operate on a sliding scale: "[T]he more likely it is that plaintiffs will ultimately prevail, the less severe must be the harm that they allege will occur if the injunction does not issue." IT Corp., 35 Cal.3d at 70; Right Site, Inc. v. Edwards, Angell, Palmer & Dodge, LLP (2013) 220 Cal.App.4th 1004, 1012.

Courts also consider whether the plaintiff will suffer irreparable injury — that is, injury that cannot be adequately compensated by an award of damages — and whether the public interest favors granting the injunction. Butt v. State of California (1992) 4 Cal.4th 668, 677–678; White v. Davis (2003) 30 Cal.4th 528, 554. An interim harm that is irreparable weighs heavily in the analysis because, by definition, such harm cannot be remedied at the conclusion of the litigation. Balboa Ins. Co. v. Trans Global Equities (1990) 218 Cal.App.3d 1327, 1338.

Under the California Uniform Trade Secrets Act ("CUTSA"), Cal. Civ. Code §§ 3426–3426.11, injunctive relief is specifically authorized to "prevent[] actual or threatened misappropriation" of trade secrets. Cal. Civ. Code § 3426.2. CUTSA's injunctive relief provision reflects the Legislature's recognition that trade secrets occupy a unique position in the law: once a trade secret is disclosed or its secrecy is compromised, the resulting harm is frequently irreversible. Accordingly, where trade secrets are at issue, courts have recognized a heightened need for injunctive relief because disclosure or use of trade secrets often cannot be adequately remedied by damages alone. DVD Copy Control Ass'n, Inc. v. Bunner (2003) 31 Cal.4th 864, 878–879.

The showing required at the preliminary injunction stage is the "interim harm" standard — whether the harm to the plaintiff from denial of the injunction outweighs the harm to the defendant from its issuance. The plaintiff need not prove its case to a certainty; it is sufficient to demonstrate a reasonable probability of success on the merits. IT Corp., 35 Cal.3d at 69–70.

IV. ARGUMENT

A. Lumos Is Likely to Prevail on the Merits

Lumos is likely to prevail on each of its five causes of action. The evidence, detailed above and set forth in the concurrently filed declarations, demonstrates that Defendants engaged in a coordinated scheme to exfiltrate Lumos's trade secrets and use them to build a competing business.

1. Trade Secret Misappropriation Under CUTSA (Cal. Civ. Code §§ 3426–3426.11). To establish a claim for trade secret misappropriation under CUTSA, a plaintiff must show: (1) the plaintiff owned a trade secret; (2) the defendant acquired, disclosed, or used the plaintiff's trade secret through improper means; and (3) the defendant's actions damaged the plaintiff. Cal. Civ. Code §§ 3426.1, 3426.3; Halcyon Enterprises v. Bramwell Partners LLC (2010) 184 Cal.App.4th 210, 220. Each element is readily satisfied here.

##### a. Lumos's Information Constitutes Protectable Trade Secrets

Under CUTSA, a "trade secret" is defined as "information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (1) [d]erives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (2) [i]s the subject of efforts that are reasonable under the circumstances to maintain its secrecy." Cal. Civ. Code § 3426.1(d); see also Restatement (Third) of Unfair Competition § 39 (1995); Milgrim on Trade Secrets (2022) § 1.01.

Independent Economic Value. Each of the five categories of Lumos's proprietary technology derives substantial independent economic value from not being generally known to the public or to Lumos's competitors. The analysis of each category follows:

The LumosEdge Ensemble ML Model Architecture. The proprietary neural-network topology and hyperparameter configurations at the heart of LumosEdge represent the culmination of years of research and development and are the foundation of Lumos's $67 million ARR business. The model architecture embodies design choices that were the product of extensive experimentation; these choices are not publicly known and are not derivable from observation of LumosEdge's outputs. A competitor in possession of this architecture would be able to replicate the core predictive capability of LumosEdge without the years of investment required to develop it independently. (Fong Decl. ¶¶ 8–12.) The economic value of this information is self-evident.

The Proprietary Feature-Engineering Libraries. Lumos's library of 2,847 individual engineered features represents a significant intellectual investment in the domain of financial signal generation. Each feature was developed through iterative experimentation and reflects deep domain expertise at the intersection of machine learning and quantitative finance. The selection and design of these features is proprietary to Lumos; the features are not published, and their specifications are not available outside of Lumos's engineering organization. Possession of these libraries would confer an enormous competitive advantage upon any competitor. (Fong Decl. ¶¶ 13–17.)

The DataStream ETL Pipeline Codebase. The DataStream pipeline codebase — encompassing custom integration code, schema definitions, data-quality validation logic, and normalization routines for 43 alternative-data vendors — represents thousands of engineering hours of development. Each vendor integration is the product of detailed negotiation, technical reverse-engineering, and iterative refinement. A competitor with access to this codebase could bypass the substantial time and expense of building equivalent data pipelines from scratch. (Fong Decl. ¶¶ 18–22.)

The Curated Training Dataset. The approximately 14.6 terabytes of historical financial and alternative data assembled, cleaned, labeled, and validated by Lumos is irreplaceable. The dataset includes proprietary labels generated by Lumos's backtesting framework that encode the predictive value of specific data features. This labeling methodology is itself proprietary, and the dataset as a whole cannot be reconstructed without access to Lumos's historical labeling processes. (Fong Decl. ¶¶ 23–26.)

The Confidential LumosEdge 3.0 Product Roadmap. The 37-page product roadmap for 2023–2025 contains detailed specifications for unreleased features, new product modules, market expansion plans, and competitive positioning strategies. A competitor in possession of this roadmap would have advance knowledge of Lumos's strategic direction — information of obvious economic value in a competitive market. (Fong Decl. ¶¶ 27–29; Chandrasekaran Decl. ¶¶ 15–17.)

Courts have consistently held that proprietary software, codebases, algorithms, customer lists, and product roadmaps constitute protectable trade secrets under CUTSA where, as here, they derive independent economic value from their secrecy. See Morlife, Inc. v. Perry (1997) 56 Cal.App.4th 1514, 1521–1522 (customer list and pricing information constituted trade secrets); Huong Que, Inc. v. Luu (2007) 150 Cal.App.4th 400, 410 (proprietary recipes and formulas constitute trade secrets); 6 Witkin, Summary of Cal. Law (11th ed. 2021) Torts § 953. Here, the trade secrets at issue are not customer lists or pricing spreadsheets — they are the core technology of a $67 million ARR business, developed over years at a cost of tens of millions of dollars. The showing of independent economic value is overwhelming.

Reasonable Efforts to Maintain Secrecy. Lumos has taken extensive measures to protect the secrecy of its proprietary information. These measures include, but are not limited to, the following:

Contractual Protections. Lumos requires all employees to execute PIIAAs upon hire. The PIIAAs include confidentiality and non-disclosure obligations that survive termination for three years, a perpetual covenant not to use or disclose trade secrets, an assignment-of-inventions clause, and a requirement to return all company materials upon termination. (Chandrasekaran Decl. ¶ 26; Fong Decl., Exs. E–G.)

Technical Access Controls. Lumos maintains role-based access controls on its internal systems, codebases, and data repositories. Access to sensitive proprietary materials — including model architecture files, hyperparameter configurations, training datasets, and the product roadmap — is restricted to employees whose roles require such access. Lumos uses enterprise identity and access management ("IAM") systems to enforce these controls. (Fong Decl. ¶ 50.)

Information Security Policies. Lumos maintains a written Information Security Policy (Rev. 4.2, effective March 1, 2022) that prohibits the use of personal USB storage devices on company systems, requires the use of company-approved cloud storage and email systems for business purposes, and prohibits the transfer of proprietary information to personal accounts or devices. (Fong Decl. ¶ 51.)

Data Loss Prevention Monitoring. Lumos employs enterprise DLP software that monitors file transfers, email attachments, USB device connections, and cloud-storage synchronization across the company network. (Fong Decl. ¶ 52.)

Return-of-Materials Process. Lumos's standard offboarding process includes a requirement that departing employees return all company materials and certify in writing that they have not retained copies of proprietary information. (Chandrasekaran Decl. ¶ 28.)

These measures are more than sufficient to satisfy CUTSA's requirement of "reasonable" efforts to maintain secrecy. Morlife, 56 Cal.App.4th at 1522 (reasonable efforts need not be perfect or impenetrable; the question is whether the claimant took steps to prevent disclosure).

##### b. Defendants Misappropriated Lumos's Trade Secrets

Under CUTSA, "misappropriation" is defined to include both (i) "[a]cquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means" and (ii) "[d]isclosure or use of a trade secret of another without express or implied consent by a person who . . . [a]t the time of disclosure or use, knew or had reason to know that his or her knowledge of the trade secret was . . . [d]erived from or through a person who had utilized improper means to acquire it." Cal. Civ. Code § 3426.1(b). "Improper means" includes "theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means." Cal. Civ. Code § 3426.1(a).

Each Defendant acquired Lumos's trade secrets by improper means — specifically, through the unauthorized transfer of proprietary materials to personal accounts and devices in breach of their PIIAA obligations and in violation of Lumos's Information Security Policy. The evidence of acquisition is direct and documented:

Rajiv Anand transferred approximately 3.2 gigabytes of files — including model architecture specifications and hyperparameter configuration files — to his personal Hollowell Health IT account on September 26, 2022, four days before his resignation. (Fong Decl. ¶ 42, Ex. A.) Two days later, on September 28, 2022, Anand forwarded the confidential 37-page LumosEdge 3.0 Product Roadmap to his personal email address at r.anand.personal@vaultmail.com. (Fong Decl. ¶ 43, Ex. B.) Both transfers were unauthorized, were not performed for any Lumos business purpose, and violated Anand's PIIAA obligations and Lumos's Information Security Policy. These acts constitute acquisition of trade secrets by improper means — namely, breach of a duty to maintain secrecy.

Serena Mallick cloned the entire DataStream ETL pipeline repository — approximately 780 megabytes of proprietary source code, configuration files, and schema definitions — to a personal external USB hard drive (serial number WD-4837291) on October 10, 2022, four days before her resignation. (Fong Decl. ¶ 44, Ex. C.) The use of a personal USB storage device on a Lumos system was expressly prohibited by Lumos's Information Security Policy, and the transfer of the repository to a personal device was unauthorized and violated Mallick's PIIAA obligations. This act constitutes acquisition of trade secrets by improper means.

Derek Yun downloaded 47 proprietary Jupyter notebooks — containing feature-engineering code, model-training scripts, hyperparameter tuning results, and experimental logs — to a personal Larkspur Technologies account on October 18, 2022, three days before his resignation. (Fong Decl. ¶ 45, Ex. D.) This transfer was unauthorized, was not performed for any Lumos business purpose, and violated Yun's PIIAA obligations and Lumos's Information Security Policy. This act constitutes acquisition of trade secrets by improper means.

Use and Threatened Use. All three Defendants are now employed by NovaSpark, a directly competing startup that purports to offer AI-driven alternative-data analytics in a market directly overlapping with Lumos's LumosEdge offering. The exfiltrated materials are precisely the types of trade secrets necessary to build a competing product. The circumstantial evidence of use is overwhelming: NovaSpark was incorporated a mere three days after Anand's resignation; all three Defendants assumed senior technical roles at NovaSpark within days of resigning from Lumos; and NovaSpark secured $12 million in seed funding within six weeks of its incorporation — a pace of fundraising that is implausible without a pre-existing technical foundation built on Lumos's stolen technology. (Chandrasekaran Decl. ¶¶ 40–44.)

At the preliminary injunction stage, a plaintiff need not prove actual use; threatened misappropriation is sufficient to support injunctive relief under CUTSA. Cal. Civ. Code § 3426.2 (authorizing injunction to prevent "actual or threatened misappropriation"). The threat of use here is not merely hypothetical — it is all but certain. Three senior engineers, in possession of the exfiltrated trade secrets that correspond precisely to their respective areas of expertise, are now employed in senior roles at a direct competitor. The inference of imminent use is inescapable.

2. Breach of Contract — PIIAA Obligations and Restrictive Covenant Provisions. In addition to its CUTSA claims, Lumos is likely to prevail on its claims for breach of contract. Each Defendant executed a PIIAA containing express restrictive covenant provisions, and each Defendant has breached multiple provisions of that agreement.

To establish a claim for breach of contract under California law, a plaintiff must demonstrate: (1) the existence of a contract; (2) the plaintiff's performance or excuse for nonperformance; (3) the defendant's breach; and (4) resulting damages. The evidence here satisfies each element with respect to each Defendant.

Existence of the Contract. Each Defendant executed a PIIAA as a condition of employment. The executed PIIAAs are attached to the Declaration of Rachel Fong as Exhibits E, F, and G. (Fong Decl. ¶¶ 37–38.) The existence of enforceable contracts is not in dispute.

Lumos's Performance. Lumos fully performed its obligations under each PIIAA by employing the Defendants, providing them with access to proprietary information in connection with their duties, and compensating them for their services. (Chandrasekaran Decl. ¶¶ 19–25.)

Defendants' Breaches. The restrictive covenant obligations that each Defendant has breached include the following:

• The covenant not to use or disclose Lumos trade secrets at any time (PIIAA § 2(b));

• The confidentiality and non-disclosure provision surviving termination for three years (PIIAA § 2(a));

• The obligation to return all company materials upon termination (PIIAA § 6).

Specifically, Anand, Mallick, and Yun each failed to return company materials or confirm the deletion of Lumos proprietary information upon their departures — a direct breach of the return-of-materials obligation set forth in Section 6 of the PIIAA. (Chandrasekaran Decl. ¶ 28.) Each Defendant's unauthorized transfer of Lumos proprietary materials to personal accounts or devices constitutes a breach of the non-disclosure and confidentiality restrictive covenant provisions set forth in Section 2 of the PIIAA. And each Defendant's employment at NovaSpark, a direct competitor, while in possession of Lumos's trade secrets, constitutes an ongoing breach of the covenant not to use or disclose those trade secrets.

Lumos is likely to prevail on its breach of contract claims because the PIIAA terms are clear and unambiguous, the breaches are documented in Lumos's IT security logs, and the evidence of non-compliance is unambiguous. The analysis of each Defendant's specific breaches follows:

Rajiv Anand. Anand breached the PIIAA in multiple respects. First, he breached the confidentiality and non-disclosure provision by transferring approximately 3.2 gigabytes of files — including model architecture specifications and hyperparameter configuration files — to his personal Hollowell Health IT account on September 26, 2022. (Fong Decl. ¶ 42, Ex. A.) Second, he breached the same provision by forwarding the confidential 37-page LumosEdge 3.0 Product Roadmap to his personal email address on September 28, 2022. (Fong Decl. ¶ 43, Ex. B.) Third, he breached the return-of-materials obligation by failing to return all company materials upon his resignation and by failing to certify that no copies of proprietary information had been retained. (Chandrasekaran Decl. ¶ 28.) Fourth, he is breaching the covenant not to use or disclose trade secrets by serving as CEO of NovaSpark while in possession of Lumos's proprietary model architecture, hyperparameter files, and product roadmap — materials that are directly relevant to the construction of a competing AI-driven analytics product.

Serena Mallick. Mallick breached the PIIAA by cloning the entire DataStream ETL pipeline repository — approximately 780 megabytes of proprietary source code, configuration files, and schema definitions — to a personal USB hard drive on October 10, 2022. (Fong Decl. ¶ 44, Ex. C.) She further breached the return-of-materials obligation by failing to return all company materials upon her resignation. (Chandrasekaran Decl. ¶ 28.) She is continuing to breach the covenant not to use or disclose trade secrets by serving as Vice President of Engineering at NovaSpark while in possession of Lumos's proprietary data pipeline architecture — the very technology she was responsible for building and maintaining at Lumos. Mallick's role at NovaSpark — VP of Engineering responsible for the company's technical infrastructure — makes it virtually certain that she is drawing upon her knowledge of, and access to, the DataStream pipeline codebase in her work for NovaSpark.

Derek Yun. Yun breached the PIIAA by downloading 47 proprietary Jupyter notebooks — containing feature-engineering code, model-training scripts, and experimental logs — to his personal Larkspur Technologies account on October 18, 2022. (Fong Decl. ¶ 45, Ex. D.) He breached the return-of-materials obligation by failing to return all company materials upon his resignation. (Chandrasekaran Decl. ¶ 28.) He is continuing to breach the covenant not to use or disclose trade secrets by serving as a founding engineer at NovaSpark while in possession of Lumos's proprietary feature-engineering code and model-training scripts. As a founding engineer at an early-stage startup, Yun's day-to-day work would necessarily involve the very types of machine-learning tasks for which the exfiltrated notebooks were designed.

The breaches are clear, documented, and ongoing. Lumos is highly likely to prevail on its breach of contract claims.

3. Breach of Duty of Loyalty. Under California law, an employee owes a duty of loyalty to the employer during the term of employment. This duty prohibits the employee from acting in a manner that is adverse to the employer's interests while still employed, including misappropriating the employer's proprietary information for personal benefit or for the benefit of a competitor. Stokes v. Dole Nut Co. (1995) 41 Cal.App.4th 285, 295; Hilb, Rogal & Hamilton Ins. Services v. Robb (1995) 33 Cal.App.4th 1812, 1820; Ashbury Partners LLC (2009) 179 Cal.App.4th 564, 577.

Each Defendant engaged in the unauthorized exfiltration of Lumos's trade secrets during the final days of his or her employment — while still subject to the duty of loyalty owed to Lumos as an employer.

Rajiv Anand. Anand's transfers occurred on September 26 and September 28, 2022. His employment at Lumos did not end until September 30, 2022. Thus, at the time he transferred 3.2 gigabytes of proprietary files to his personal Hollowell Health IT and forwarded the LumosEdge 3.0 Product Roadmap to his personal email, he was an active Lumos employee subject to the full scope of the duty of loyalty. (Fong Decl. ¶¶ 42–43.)

Serena Mallick. Mallick's cloning of the DataStream ETL repository to a personal USB drive occurred on October 10, 2022. Her employment at Lumos did not end until October 14, 2022. She was therefore an active Lumos employee at the time of the exfiltration, subject to the duty of loyalty. (Fong Decl. ¶ 44.)

Derek Yun. Yun's download of 47 Jupyter notebooks to his personal Larkspur Technologies account occurred on October 18, 2022. His employment at Lumos did not end until October 21, 2022. He was therefore an active Lumos employee at the time of the exfiltration, subject to the duty of loyalty. (Fong Decl. ¶ 45.)

The coordinated nature of the departures, the near-immediate formation of NovaSpark, and the targeted exfiltration activity conducted while each Defendant was still employed at Lumos compel the conclusion that Defendants planned and executed this scheme while still owing a fiduciary duty of loyalty to Lumos. Each Defendant took affirmative steps to steal proprietary information for the express purpose of using it to compete with Lumos — conduct that is squarely prohibited by the duty of loyalty. Hilb, Rogal, 33 Cal.App.4th at 1820 (employees breach duty of loyalty by secretly planning and preparing to compete with employer using employer's proprietary information). Lumos is likely to prevail on its breach-of-duty-of-loyalty claims against each individual Defendant.

4. Unfair Business Practices (Cal. Bus. & Prof. Code § 17200). California's Unfair Competition Law ("UCL"), Bus. & Prof. Code § 17200 et seq., prohibits any "unlawful, unfair, or fraudulent business act or practice." The statute is construed broadly and provides an independent basis for equitable relief.

NovaSpark's use of misappropriated trade secrets to compete with Lumos constitutes an unlawful, unfair, and fraudulent business practice under the UCL. The "unlawful" prong of Section 17200 is satisfied because NovaSpark's conduct constitutes a violation of CUTSA and a breach of the PIIAAs — each of which is an independent violation of law that can serve as a predicate for a UCL claim. The "unfair" prong is independently satisfied because leveraging stolen trade secrets provides NovaSpark an unearned and illegitimate competitive advantage that undermines the integrity of the marketplace. A competitor that enters the market with a product built on misappropriated technology enjoys an unfair head start that distorts competition and harms not only the trade-secret owner but also competitors who develop technology through legitimate means.

Lumos is likely to prevail on its UCL claim, and the claim provides an additional independent basis for the injunctive relief requested herein.

5. Conversion. Under California law, conversion is the wrongful exercise of dominion over the personal property of another. The elements of a conversion claim are: (1) the plaintiff's ownership or right to possession of the property; (2) the defendant's conversion by a wrongful act or disposition of the plaintiff's property; and (3) damages.

Each Defendant exercised unauthorized dominion and control over Lumos's proprietary materials by transferring those materials to personal accounts and devices without Lumos's authorization and in violation of the PIIAA's return-of-materials obligations. Lumos had — and continues to have — a right to possess and control these materials. Defendants' unauthorized possession of Lumos's proprietary files, codebases, datasets, and documents constitutes conversion. Lumos is likely to prevail on its conversion claims.

B. Lumos Will Suffer Irreparable Harm Absent a Preliminary Injunction

It is well established under California law that the misappropriation of trade secrets, by its very nature, causes irreparable harm that cannot be adequately compensated by monetary damages. DVD Copy Control Ass'n, 31 Cal.4th at 878–879; Readylink Healthcare v. Cotton (2005) 126 Cal.App.4th 1006, 1024. Once trade secrets are disclosed or used by a competitor, the competitive advantage they confer is permanently diminished or destroyed. The proverbial bell cannot be unrung. This foundational principle animates CUTSA's express authorization of injunctive relief to prevent "actual or threatened misappropriation." Cal. Civ. Code § 3426.2(a).

The irreparable harms that Lumos faces absent a preliminary injunction are specific, severe, and ongoing:

1. Loss of Competitive Advantage. NovaSpark's use of Lumos's model architecture, feature-engineering libraries, and data pipelines would allow NovaSpark to replicate Lumos's core technology at a fraction of the cost and time that Lumos expended to develop it. Rachel Fong, Lumos's Vice President of Engineering, estimates that possession of Lumos's exfiltrated materials would save NovaSpark approximately 14 to 18 months of independent development time — time during which NovaSpark would otherwise need to recruit engineers, design and test model architectures, build data pipelines from scratch, assemble training datasets, and iterate through the trial-and-error process that characterizes machine-learning product development. (Fong Decl. ¶ 55.) This compression of the competitive timeline constitutes irreparable harm because it cannot be remedied after the fact; by the time this matter reaches trial, the competitive advantage will have been permanently lost.

2. Customer Diversion. NovaSpark is targeting the same market of institutional asset managers, hedge funds, and proprietary trading desks that Lumos serves. (Chandrasekaran Decl. ¶¶ 41–43.) Without an injunction, NovaSpark may use Lumos's trade secrets to win customers away from Lumos — including Lumos's existing customers. The loss of customer relationships in the institutional financial services market is particularly harmful because these relationships are built over extended periods through sustained engagement, and once lost, they are exceedingly difficult to recover. Moreover, the harm from customer diversion is inherently difficult to quantify because it involves not only the revenue attributable to lost contracts but also the reputational damage and loss of referral opportunities that accompany such losses. (Chandrasekaran Decl. ¶¶ 45–47.)

3. Erosion of Investor Confidence. Lumos's investors — including Ridgeline Ventures (Series B lead, General Partner Helen Trask) and Northstar Growth Equity (Series D lead, Managing Director Jonathan Holt) — have invested $185 million in Lumos based in large part on the proprietary nature of Lumos's technology and its defensibility against competitive threats. (Chandrasekaran Decl. ¶¶ 7, 48.) Unchecked misappropriation of Lumos's core technology undermines the premise of that investment and jeopardizes Lumos's ability to raise future capital. The erosion of investor confidence cannot be remedied by damages because it affects Lumos's valuation, its ability to attract new investors, and its strategic positioning in a capital-intensive industry. (Chandrasekaran Decl. ¶ 49.)

4. Inability to "Unring the Bell." The disclosure or use of trade secrets cannot be undone. Once Defendants have used Lumos's model architecture to build NovaSpark's product, or incorporated Lumos's feature-engineering logic into NovaSpark's codebase, or leveraged the DataStream pipeline architecture to accelerate NovaSpark's data-ingestion capabilities, the competitive harm is permanently inflicted. Monetary damages — even if quantifiable — are inherently inadequate to compensate for the permanent loss of trade-secret protection. O'Grady v. Superior Court (2006) 139 Cal.App.4th 1423, 1445 (noting that "the whole point of a trade secret is that once disclosed, the trade secret holder can never be made whole by an award of damages").

5. Product Roadmap Compromise. The LumosEdge 3.0 Product Roadmap — a 37-page document revealing Lumos's unreleased product specifications for 2023–2025 — is in Anand's possession. If NovaSpark gains insight into Lumos's future product plans, market expansion strategies, and competitive positioning, the strategic harm to Lumos is incalculable. A competitor with advance knowledge of Lumos's product roadmap can preempt Lumos's planned launches, develop features designed to neutralize Lumos's innovations before they reach the market, and position itself to intercept Lumos's target customers. This type of forward-looking strategic harm is, by definition, not susceptible to measurement or compensation through monetary damages. (Chandrasekaran Decl. ¶¶ 50–52.)

The ongoing nature of the harm makes immediate injunctive relief critical. As of the date of this filing, all three individual Defendants continue to be employed at NovaSpark in senior technical roles. They remain in possession of the exfiltrated materials. NovaSpark continues to develop its product. With each day that passes, the risk of further use and disclosure of Lumos's trade secrets grows, and the resulting competitive harm becomes more deeply embedded and more difficult to remedy.

Courts addressing trade secret misappropriation have recognized a presumption of irreparable harm where, as here, the evidence demonstrates actual misappropriation through exfiltration of proprietary materials. See FLIR Systems, Inc. v. Parrish (9th Cir. 2005) 174 F. App'x 724, 726–727 (applying California law); Readylink Healthcare, 126 Cal.App.4th at 1024. That presumption is amply supported by the specific, concrete harms identified above. Lumos will suffer irreparable harm absent a preliminary injunction.

C. The Balance of Hardships Tips Decidedly in Lumos's Favor

The balance of hardships weighs overwhelmingly in Lumos's favor.

Harm to Lumos absent an injunction. If the Court denies the requested injunction, Lumos faces the permanent loss of trade-secret protection for its most valuable proprietary technology, ongoing competitive erosion from a rival built on stolen technology, the diversion of customers, and the destruction of years of research and development investment valued in the tens of millions of dollars — all supporting a $67 million ARR business. Once these harms materialize, they cannot be reversed. The competitive landscape, once distorted by the introduction of a product built on misappropriated trade secrets, cannot be restored to its prior state.

Harm to Defendants from issuance of the injunction. By contrast, the harm to Defendants from the issuance of the requested injunction is minimal. The injunction would merely require Defendants to comply with their existing contractual obligations under their PIIAAs and the restrictive covenant provisions contained therein. Each Defendant voluntarily entered into a PIIAA that prohibited the very conduct at issue — the unauthorized use, disclosure, and retention of Lumos's trade secrets. The injunction does not ask the Court to impose new obligations on Defendants; it asks the Court to enforce the obligations Defendants freely assumed.

Critically, the requested injunction does not seek to prevent any Defendant from working in his or her field. NovaSpark may continue to operate and to develop products using independently created or publicly available technology. The individual Defendants are free to apply their general skills and expertise — which are not at issue — to any lawful purpose. The injunction seeks only to prevent the use of Lumos's stolen materials in the construction of a competing product. This is a narrow, targeted form of relief that imposes no hardship beyond the requirement that Defendants compete fairly.

Moreover, the individual Defendants assumed the risk of injunction by entering into PIIAAs containing restrictive covenant provisions that expressly prohibited the unauthorized use and disclosure of Lumos's trade secrets. Having voluntarily accepted these obligations as a condition of their employment — and the substantial compensation that accompanied it — Defendants cannot credibly claim hardship from being held to those obligations. See In re Providian Credit Card Cases (2002) 96 Cal.App.4th 292, 313 (the self-inflicted nature of a defendant's harm undermines any claim of hardship in the balancing analysis).

The balance of hardships tips decidedly in Lumos's favor.

D. The Public Interest Supports Issuance of a Preliminary Injunction

The public interest favors the issuance of the requested preliminary injunction. California has a strong and longstanding public policy in favor of protecting trade secrets, as reflected in the Legislature's enactment of the California Uniform Trade Secrets Act. CUTSA represents a comprehensive legislative framework for the protection of proprietary information, and its injunctive relief provision was specifically designed to provide courts with the tools necessary to prevent the loss of trade-secret protection before it becomes irreversible. Cal. Civ. Code § 3426.2.

Enforcement of confidentiality agreements a

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
LUMOS ANALYTICS INC., a Delaware corporation,
Plaintiff,
v.
NOVASPARK TECHNOLOGIES INC., a Delaware corporation; RAJIV ANAND, an individual; SERENA MALLICK, an individual; DEREK YUN, an individual,
Defendants.
Case No. 23-CV-004871
Assigned for All Purposes to the Honorable David Rutherford
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION
Hearing Date: To be set by the Court Time: To be set by the Court Dept.: To be set by the Court
Filed Concurrently With:
• Ex Parte Application for Temporary Restraining Order
• Declaration of Priya Chandrasekaran in Support of Plaintiff's Motion for Preliminary Injunction
• Declaration of Rachel Fong in Support of Plaintiff's Motion for Preliminary Injunction
• [Proposed] Order Granting Preliminary Injunction
CALDERWOOD & HARKNESS LLP 555 California Street, 40th Floor San Francisco, California 94104 Telephone: (415) 555-7200 Facsimile: (415) 555-7201
Marcus Delgado (SBN 198472) Catherine Bloom (SBN 214836) Wendy Schultz (SBN 287593) Omar Siddiqui (SBN 312748)
Attorneys for Plaintiff LUMOS ANALYTICS INC.
TABLE OF CONTENTS
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TABLE OF AUTHORITIES
Cases
Statutes
Secondary Sources
I. INTRODUCTION
Plaintiff Lumos Analytics Inc. ("Lumos" or "Plaintiff") respectfully submits this Memorandum of Points and Authorities in support of its Motion for Preliminary Injunction against Defendants NovaSpark Technologies Inc. ("NovaSpark"), Rajiv Anand ("Anand"), Serena Mallick ("Mallick"), and Derek Yun ("Yun") (collectively, "Defendants"). This motion arises from a brazen and coordinated scheme by three former senior engineers to steal Lumos's most valuable proprietary technology and use it to build a competing startup overnight.
Lumos is a Delaware-incorporated, California-headquartered software-as-a-service ("SaaS") company specializing in AI-driven financial analytics for institutional asset managers. Founded in approximately 2017 and headquartered at 4700 Orchard Parkway, Suite 300, San Jose, California 95134, Lumos employs approximately 340 people and generated approximately $67 million in annual recurring revenue ("ARR") in 2022. Lumos has raised $185 million in venture funding through its Series D round, a trajectory that reflects the exceptional value and promise of its proprietary technology. These funding milestones include a $40 million Series B round led by Ridgeline Ventures in 2019 and a $72 million Series D round led by Northstar Growth Equity in June 2022. Lumos's flagship product, "LumosEdge," employs proprietary ensemble machine-learning models to generate predictive signals for equity and fixed-income portfolio optimization — a technology developed over years and at the cost of tens of millions of dollars of investment.
This case concerns the systematic theft of Lumos's crown jewels by three former senior engineers — Anand, Mallick, and Yun — who departed Lumos in rapid succession in late September through October 2022, exfiltrating massive quantities of Lumos's most sensitive proprietary materials as they walked out the door. Within days of his resignation, Anand incorporated NovaSpark Technologies Inc. on October 3, 2022, in Delaware. NovaSpark is headquartered at 88 Bluxome Street, Floor 4, San Francisco, California 94107, and purports to offer AI-driven alternative-data analytics for hedge funds and proprietary trading desks — a market that directly and substantially overlaps with Lumos's core LumosEdge offering. Mallick and Yun followed Anand to NovaSpark within days of their own resignations, assuming the roles of Vice President of Engineering and founding engineer, respectively. NovaSpark received $12 million in seed funding from Blackpine Capital Partners LP on November 15, 2022, barely six weeks after its incorporation — a fact that is inexplicable absent the use of Lumos's stolen technology as a foundation for NovaSpark's pitch to investors.
The evidence demonstrates that, before and during their departures, each Defendant exfiltrated Lumos's most sensitive proprietary materials — including model architecture specifications, codebases, training data, feature-engineering libraries, and confidential product roadmap documents — in flagrant violation of their Proprietary Information and Inventions Assignment Agreements ("PIIAAs") and the restrictive covenant provisions contained therein. The exfiltration was not incidental or accidental. It was targeted, systematic, and precisely calibrated to allow Defendants to replicate Lumos's core technology at NovaSpark with minimal independent effort.
Lumos seeks a preliminary injunction to halt the ongoing and imminent misappropriation of its trade secrets and to enforce Defendants' contractual obligations. This memorandum demonstrates that Lumos satisfies all four factors governing the issuance of preliminary injunctive relief under California law:
First, Lumos has a strong likelihood of prevailing on the merits of each of its five causes of action: (1) trade secret misappropriation under the California Uniform Trade Secrets Act ("CUTSA"), Cal. Civ. Code §§ 3426–3426.11; (2) breach of contract; (3) breach of the duty of loyalty; (4) unfair business practices under California Business and Professions Code § 17200; and (5) conversion.
Second, Lumos will suffer irreparable harm absent an injunction. The competitive advantage conferred by Lumos's trade secrets — the product of years of research, development, and investment — is being permanently eroded with each passing day that Defendants are free to use Lumos's proprietary technology at NovaSpark.
Third, the balance of hardships tips decidedly in Lumos's favor. The injunction would merely require Defendants to comply with the contractual obligations they freely assumed when they signed their PIIAAs, while denial of the injunction would result in the permanent destruction of trade-secret protections that Lumos can never recover.
Fourth, the public interest strongly supports issuance of the injunction. California has a robust public policy in favor of protecting trade secrets, and the technology innovation ecosystem depends on the enforceability of intellectual property protections.
This memorandum is filed concurrently with Lumos's Ex Parte Application for a Temporary Restraining Order, the Declaration of Priya Chandrasekaran (Lumos's Chief Executive Officer), and the Declaration of Rachel Fong (Lumos's Vice President of Engineering), each of which provides detailed factual support for the relief requested herein.
II. STATEMENT OF FACTS
A. Lumos Analytics Inc. and Its Proprietary Technology
Lumos Analytics Inc. develops and markets LumosEdge, an AI-driven financial analytics platform used by institutional asset managers to generate predictive signals for equity and fixed-income portfolio optimization. (Declaration of Priya Chandrasekaran ("Chandrasekaran Decl.") ¶¶ 3–5.) Founded in approximately 2017, Lumos is led by Chief Executive Officer Priya Chandrasekaran, General Counsel Thomas Brightwell, and Vice President of Engineering Rachel Fong. (Chandrasekaran Decl. ¶ 2.) Since its founding, Lumos has grown to approximately 340 employees and generated approximately $67 million in annual recurring revenue in 2022. (Chandrasekaran Decl. ¶ 6.) Lumos has raised $185 million in venture funding through its Series D round, reflecting the extraordinary value investors place on Lumos's proprietary technology. (Chandrasekaran Decl. ¶ 7.)
At the core of Lumos's business are five categories of trade secrets, each of which represents the product of years of intensive research, development, and investment:
1. LumosEdge Ensemble ML Model Architecture. The LumosEdge platform relies on a proprietary neural-network topology and hyperparameter configuration developed iteratively over multiple years of experimentation and refinement. The model architecture reflects the collective expertise of Lumos's machine-learning engineering team and embodies fundamental design choices — including layer structure, activation functions, regularization strategies, and ensemble-weighting methodologies — that are not publicly known and cannot be reverse-engineered from the platform's outputs. The model architecture is the single most valuable technical asset in Lumos's portfolio. (Declaration of Rachel Fong ("Fong Decl.") ¶¶ 8–12.)
2. Proprietary Feature-Engineering Libraries. Lumos has developed feature-engineering libraries containing 2,847 individual engineered features for financial signal generation. Each feature represents a carefully designed transformation of raw financial and alternative data into a structured input suitable for the LumosEdge model. The selection, design, and calibration of these features reflects years of domain expertise at the intersection of machine learning and quantitative finance. These libraries are maintained in a restricted internal repository and are not accessible outside of Lumos's engineering organization. (Fong Decl. ¶¶ 13–17.)
3. DataStream ETL Pipeline Codebase. Lumos's proprietary extract, transform, load ("ETL") pipeline codebase — internally referred to as "DataStream" — is the backbone of Lumos's data infrastructure. The DataStream pipeline handles data ingestion from 43 alternative-data vendors, each requiring custom integration code, schema definitions, data-quality checks, and normalization routines. The codebase represents thousands of engineering hours and embodies proprietary logic for handling the unique characteristics, update cadences, and data formats of each vendor. (Fong Decl. ¶¶ 18–22.)
4. Curated Training Dataset. Lumos maintains a curated training dataset of approximately 14.6 terabytes of historical financial and alternative data, which has been carefully assembled, cleaned, labeled, and validated over the course of several years. The dataset includes proprietary labels derived from Lumos's backtesting framework, making it irreplaceable and impossible to reconstruct without Lumos's historical labeling methodology. The quality and comprehensiveness of this training dataset are a critical differentiator for LumosEdge. (Fong Decl. ¶¶ 23–26.)
5. Confidential Product Roadmap. Lumos maintains a confidential product roadmap for 2023–2025, including a detailed 37-page PDF document titled "LumosEdge 3.0 Product Roadmap," which contains unreleased specifications, planned feature enhancements, new product offerings, market expansion strategies, and strategic competitive positioning. This document was circulated internally on a strictly need-to-know basis and marked as "CONFIDENTIAL — INTERNAL USE ONLY." (Fong Decl. ¶¶ 27–29; Chandrasekaran Decl. ¶¶ 15–17.)
Lumos invested years and tens of millions of dollars developing these proprietary assets. The technology described above represents the core competitive advantage of Lumos Analytics Inc. and is the foundation upon which Lumos has built its $67 million ARR business. (Chandrasekaran Decl. ¶ 8.) The loss or compromise of any one of these five categories of trade secrets would materially impair Lumos's ability to compete and would undermine the value of the investment made by Lumos's employees, management, and investors. (Chandrasekaran Decl. ¶¶ 9–11.)
B. The Individual Defendants and Their Access to Lumos's Trade Secrets
Each of the three individual Defendants held a senior engineering position at Lumos and, by virtue of those roles, enjoyed broad access to Lumos's most sensitive proprietary information.
Rajiv Anand. Anand, age 37, served as Lumos's Principal Engineer — ML Infrastructure from March 2019 until his resignation on September 30, 2022 — a tenure of approximately three and one-half years. (Chandrasekaran Decl. ¶ 19.) In this role, Anand was one of the key architects of the LumosEdge signal-generation engine. He had full access to Lumos's most sensitive proprietary codebases, the LumosEdge ensemble ML model architecture, the hyperparameter configuration files, and the curated training dataset. (Fong Decl. ¶ 31.) Anand also had access to the confidential LumosEdge 3.0 Product Roadmap by virtue of his participation in Lumos's cross-functional product-planning meetings. (Chandrasekaran Decl. ¶ 20.) Anand was compensated with a base salary of $265,000, an annual performance bonus, and stock options representing 0.35% of Lumos's fully diluted equity. (Chandrasekaran Decl. ¶ 21.)
Serena Mallick. Mallick, age 34, served as Lumos's Senior Software Engineer — Data Pipelines from June 2020 until her resignation on October 14, 2022 — a tenure of approximately two years and four months. (Chandrasekaran Decl. ¶ 22.) In this role, Mallick was primarily responsible for building and maintaining the proprietary DataStream ETL pipelines, including the custom integration code for each of the 43 alternative-data vendors. She had root-level access to the DataStream code repository, the schema definitions, and the data-quality validation logic. (Fong Decl. ¶ 33.) Mallick was compensated with a base salary of $210,000, an annual performance bonus, and stock options. (Chandrasekaran Decl. ¶ 23.)
Derek Yun. Yun, age 31, served as Lumos's Machine Learning Engineer II from January 2021 until his resignation on October 21, 2022 — a tenure of approximately one year and nine months. (Chandrasekaran Decl. ¶ 24.) In this role, Yun had direct access to the proprietary training datasets, the model hyperparameters, and the feature-engineering libraries. He was responsible for developing and refining machine-learning model-training scripts and participated in experiments that involved the full breadth of Lumos's proprietary ML infrastructure. (Fong Decl. ¶ 35.) Yun was compensated with a base salary of $185,000, an annual performance bonus, and stock options. (Chandrasekaran Decl. ¶ 25.)
Each of these individuals occupied a position of trust within Lumos's engineering organization and was given access to proprietary technology on the understanding — memorialized in their PIIAAs — that such information would be used solely for Lumos's benefit and would be returned or destroyed upon the termination of employment.
C. The PIIAA and Restrictive Covenant Obligations
As a condition of employment, each Defendant executed Lumos's standard Proprietary Information and Inventions Assignment Agreement ("PIIAA"). (Chandrasekaran Decl. ¶ 26; Fong Decl., Exs. E, F, G (executed PIIAAs for Anand, Mallick, and Yun, respectively).) The PIIAA is a comprehensive agreement designed to protect Lumos's proprietary information and to ensure that employees understand and agree to their obligations with respect to Lumos's trade secrets and intellectual property.
The PIIAA contains the following restrictive covenant provisions, among others:
(a) Assignment of All Inventions. Each Defendant agreed to assign to Lumos all right, title, and interest in and to any inventions, developments, improvements, or discoveries made during the term of employment that relate to Lumos's business or result from the use of Lumos's resources. (PIIAA § 3.)
(b) Confidentiality and Non-Disclosure. Each Defendant agreed not to use or disclose any Lumos proprietary information, both during and after employment, for any purpose other than the performance of duties for Lumos. This obligation survives termination of employment for a period of three years. (PIIAA § 2.)
(c) Non-Solicitation of Employees. Each Defendant agreed not to solicit, recruit, or induce any Lumos employee to leave Lumos's employment for a period of twelve months following the termination of the Defendant's employment with Lumos. (PIIAA § 5.)
(d) Covenant Not to Use or Disclose Trade Secrets. Each Defendant agreed not to use or disclose Lumos's trade secrets at any time, without limitation. This obligation is not time-limited and continues indefinitely. (PIIAA § 2(b).)
The PIIAA further requires that, upon termination of employment, each employee must return all company materials — including documents, files, data, devices, and media — and must certify in writing that no copies of proprietary information have been retained. (PIIAA § 6.) None of the three Defendants returned company materials or confirmed the deletion of Lumos proprietary information upon their departures. (Chandrasekaran Decl. ¶ 28; Fong Decl. ¶ 38.) Lumos's Human Resources department sent written reminders to each Defendant following their resignations, and none responded. (Chandrasekaran Decl. ¶ 29.)
D. The Coordinated Departures and Formation of NovaSpark
The timeline of events reveals a carefully orchestrated scheme by Defendants to leave Lumos, form a competing enterprise, and immediately begin exploiting Lumos's proprietary technology:
• September 30, 2022: Rajiv Anand submits his resignation from Lumos, effective immediately. He provides no advance notice, despite Lumos's standard practice of requesting a minimum of two weeks' notice. (Chandrasekaran Decl. ¶ 30.)
• October 3, 2022: Anand incorporates NovaSpark Technologies Inc. in Delaware (Delaware File Number 7294183) — just three days after his resignation from Lumos. (Chandrasekaran Decl. ¶ 31; Fong Decl., Ex. H (Delaware Division of Corporations certificate of incorporation).)
• October 14, 2022: Serena Mallick submits her resignation from Lumos, also effective immediately and without advance notice. (Chandrasekaran Decl. ¶ 32.)
• October 17, 2022: Mallick begins employment at NovaSpark in the position of Vice President of Engineering — just three days after her resignation from Lumos. (Chandrasekaran Decl. ¶ 33.)
• October 21, 2022: Derek Yun submits his resignation from Lumos, also effective immediately and without advance notice. (Chandrasekaran Decl. ¶ 34.)
• October 24, 2022: Yun begins employment at NovaSpark as a founding engineer — just three days after his resignation from Lumos. (Chandrasekaran Decl. ¶ 35.)
• November 15, 2022: NovaSpark closes a $12 million seed funding round from Blackpine Capital Partners LP (Managing Partner: Franklin Osei). (Chandrasekaran Decl. ¶ 36.)
NovaSpark's Chief Executive Officer is Defendant Rajiv Anand. NovaSpark's federal Employer Identification Number is 88-3291047. (Chandrasekaran Decl. ¶ 37.)
The rapid, sequential nature of the departures and the near-immediate incorporation of a directly competing startup strongly suggest premeditated, coordinated action that was planned while Defendants were still employed at Lumos. The three-day interval between each Defendant's resignation and either the incorporation of NovaSpark (in Anand's case) or the commencement of employment at NovaSpark (in the cases of Mallick and Yun) is not a coincidence. It reflects a concerted plan to extract maximum value from Lumos's proprietary technology before departing and to deploy that technology immediately in a competing venture. (Chandrasekaran Decl. ¶ 38.)
E. Evidence of Exfiltration of Lumos Trade Secrets
On December 12, 2022, Lumos's IT security team — led by Lumos's Director of Information Security, Michael Tran — identified anomalous data-exfiltration activity in the system logs corresponding to the final weeks of each Defendant's employment. (Fong Decl. ¶ 40.) Lumos employs enterprise data-loss-prevention ("DLP") software that monitors file transfers, email attachments, USB device connections, and cloud-storage synchronization activity across the company network. While Lumos's DLP system generates alerts in real time, the alerts generated by Defendants' exfiltration activity were not initially flagged for review due to a backlog in the security operations queue. Upon investigation in December 2022, the following specific exfiltration events were confirmed:
1. Rajiv Anand — September 26, 2022 (four days before resignation). On this date, Anand transferred approximately 3.2 gigabytes of files from Lumos's internal network to a personal Hollowell Health IT account (account identifier: r.anand.personal@Northgate Software.com). The transferred files included model architecture specifications, hyperparameter configuration files, and internal technical documentation for the LumosEdge ensemble ML model. The transfer was executed through the Hollowell Health IT desktop synchronization client installed on Anand's Lumos-issued laptop (asset tag LUM-ENG-4271). This transfer was not authorized by Lumos and was not performed in connection with any Lumos business purpose. (Fong Decl. ¶ 42; Fong Decl., Ex. A (DLP log excerpts showing file transfer details, timestamps, and file names).)
2. Rajiv Anand — September 28, 2022 (two days before resignation). On this date, Anand accessed the confidential 37-page "LumosEdge 3.0 Product Roadmap" PDF from Lumos's restricted product-planning Aldermere Systems site and forwarded it as an email attachment to his personal email address, r.anand.personal@vaultmail.com. The email was sent at 11:47 p.m. Pacific Time. The Product Roadmap document was marked "CONFIDENTIAL — INTERNAL USE ONLY" and contained unreleased product specifications for 2023–2025, including planned feature enhancements, new product modules, and competitive positioning strategies. This transfer was not authorized by Lumos and was not performed in connection with any Lumos business purpose. (Fong Decl. ¶ 43; Fong Decl., Ex. B (email server log showing sender, recipient, attachment hash, and timestamp).)
3. Serena Mallick — October 10, 2022 (four days before resignation). On this date, Mallick connected a personal external USB hard drive (serial number WD-4837291) to her Lumos-issued workstation (asset tag LUM-ENG-5118) and cloned the entire DataStream ETL pipeline repository — approximately 780 megabytes of source code, configuration files, schema definitions, data-quality validation routines, and vendor-specific integration modules. The USB connection event was logged by Lumos's endpoint-detection software at 8:23 p.m. Pacific Time, well outside normal business hours. This transfer was not authorized by Lumos, and the use of personal USB storage devices is expressly prohibited by Lumos's Information Security Policy (Rev. 4.2, effective March 1, 2022). (Fong Decl. ¶ 44; Fong Decl., Ex. C (endpoint-detection log showing USB device serial number, connection timestamp, and volume of data transferred).)
4. Derek Yun — October 18, 2022 (three days before resignation). On this date, Yun downloaded 47 proprietary Jupyter notebooks from Lumos's internal machine-learning experimentation platform to a personal Larkspur Technologies account (account identifier: derekyun.personal@Larkspur Technologies.com). The downloaded notebooks contained feature-engineering code, model-training scripts, hyperparameter tuning results, and experimental logs documenting the evolution of the LumosEdge model. The download was executed via the Larkspur Technologies desktop synchronization client at 10:14 p.m. Pacific Time. This transfer was not authorized by Lumos and was not performed in connection with any Lumos business purpose. (Fong Decl. ¶ 45; Fong Decl., Ex. D (DLP log excerpts showing file names, transfer timestamps, and destination account).)
Each of these transfers was unauthorized. Each violated the transferring Defendant's PIIAA obligations, including the confidentiality and non-disclosure provisions and the prohibition on removing company materials from Lumos's premises or systems. (Fong Decl. ¶ 46.) The pattern is unmistakable: each Defendant engaged in targeted exfiltration of the specific proprietary materials to which they had access by virtue of their engineering role, timed to the final days before their pre-planned resignations.
As of the date of this filing, none of the Defendants has returned any of the exfiltrated materials, and none has responded to Lumos's written demands for the return of proprietary information sent by Lumos's General Counsel, Thomas Brightwell, on November 18, 2022 and December 20, 2022. (Chandrasekaran Decl. ¶ 39.)
F. NovaSpark's Directly Competing Product
NovaSpark purports to offer AI-driven alternative-data analytics for hedge funds and proprietary trading desks. (Chandrasekaran Decl. ¶ 40.) Based on publicly available information — including NovaSpark's website, social media presence, and press coverage of the Blackpine Capital Partners LP seed round — NovaSpark's product offering directly and substantially overlaps with Lumos's core LumosEdge platform. Both companies target institutional investors seeking AI-powered analytics for portfolio optimization; both companies rely on machine-learning models applied to alternative data sources; and both companies serve the same customer base of hedge funds, proprietary trading desks, and institutional asset managers. (Chandrasekaran Decl. ¶¶ 41–43.)
NovaSpark's ability to secure $12 million in seed funding from Blackpine Capital Partners LP within approximately six weeks of incorporation — and before having any independently developed product of record — strongly suggests that Defendants leveraged Lumos's proprietary technology to accelerate development and to provide potential investors with a compelling demonstration of technical capability. (Chandrasekaran Decl. ¶ 44.) It is simply not plausible that three engineers, no matter how talented, could have independently developed a credible AI-driven financial analytics product in the span of weeks without relying on the proprietary materials they exfiltrated from Lumos. (Fong Decl. ¶ 48.)
NovaSpark's ongoing product development, using personnel who are in possession of Lumos's most sensitive trade secrets, poses an ongoing and imminent threat of further use and disclosure of those trade secrets. The harm to Lumos compounds with each day that passes without judicial intervention.
III. LEGAL STANDARD FOR PRELIMINARY INJUNCTION
Under California law, a trial court evaluates two interrelated factors in determining whether to issue a preliminary injunction: "(1) the likelihood that the plaintiff will prevail on the merits, and (2) the relative balance of harms that is likely to result from the granting or denial of interim injunctive relief." IT Corp. v. County of Imperial (1983) 35 Cal.3d 63, 69–70; see also Cal. Code Civ. Proc. § 527. These factors operate on a sliding scale: "[T]he more likely it is that plaintiffs will ultimately prevail, the less severe must be the harm that they allege will occur if the injunction does not issue." IT Corp., 35 Cal.3d at 70; Right Site, Inc. v. Edwards, Angell, Palmer & Dodge, LLP (2013) 220 Cal.App.4th 1004, 1012.
Courts also consider whether the plaintiff will suffer irreparable injury — that is, injury that cannot be adequately compensated by an award of damages — and whether the public interest favors granting the injunction. Butt v. State of California (1992) 4 Cal.4th 668, 677–678; White v. Davis (2003) 30 Cal.4th 528, 554. An interim harm that is irreparable weighs heavily in the analysis because, by definition, such harm cannot be remedied at the conclusion of the litigation. Balboa Ins. Co. v. Trans Global Equities (1990) 218 Cal.App.3d 1327, 1338.
Under the California Uniform Trade Secrets Act ("CUTSA"), Cal. Civ. Code §§ 3426–3426.11, injunctive relief is specifically authorized to "prevent[] actual or threatened misappropriation" of trade secrets. Cal. Civ. Code § 3426.2. CUTSA's injunctive relief provision reflects the Legislature's recognition that trade secrets occupy a unique position in the law: once a trade secret is disclosed or its secrecy is compromised, the resulting harm is frequently irreversible. Accordingly, where trade secrets are at issue, courts have recognized a heightened need for injunctive relief because disclosure or use of trade secrets often cannot be adequately remedied by damages alone. DVD Copy Control Ass'n, Inc. v. Bunner (2003) 31 Cal.4th 864, 878–879.
The showing required at the preliminary injunction stage is the "interim harm" standard — whether the harm to the plaintiff from denial of the injunction outweighs the harm to the defendant from its issuance. The plaintiff need not prove its case to a certainty; it is sufficient to demonstrate a reasonable probability of success on the merits. IT Corp., 35 Cal.3d at 69–70.
IV. ARGUMENT
A. Lumos Is Likely to Prevail on the Merits
Lumos is likely to prevail on each of its five causes of action. The evidence, detailed above and set forth in the concurrently filed declarations, demonstrates that Defendants engaged in a coordinated scheme to exfiltrate Lumos's trade secrets and use them to build a competing business.
1. Trade Secret Misappropriation Under CUTSA (Cal. Civ. Code §§ 3426–3426.11). To establish a claim for trade secret misappropriation under CUTSA, a plaintiff must show: (1) the plaintiff owned a trade secret; (2) the defendant acquired, disclosed, or used the plaintiff's trade secret through improper means; and (3) the defendant's actions damaged the plaintiff. Cal. Civ. Code §§ 3426.1, 3426.3; Halcyon Enterprises v. Bramwell Partners LLC (2010) 184 Cal.App.4th 210, 220. Each element is readily satisfied here.
##### a. Lumos's Information Constitutes Protectable Trade Secrets
Under CUTSA, a "trade secret" is defined as "information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (1) [d]erives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (2) [i]s the subject of efforts that are reasonable under the circumstances to maintain its secrecy." Cal. Civ. Code § 3426.1(d); see also Restatement (Third) of Unfair Competition § 39 (1995); Milgrim on Trade Secrets (2022) § 1.01.
Independent Economic Value. Each of the five categories of Lumos's proprietary technology derives substantial independent economic value from not being generally known to the public or to Lumos's competitors. The analysis of each category follows:
The LumosEdge Ensemble ML Model Architecture. The proprietary neural-network topology and hyperparameter configurations at the heart of LumosEdge represent the culmination of years of research and development and are the foundation of Lumos's $67 million ARR business. The model architecture embodies design choices that were the product of extensive experimentation; these choices are not publicly known and are not derivable from observation of LumosEdge's outputs. A competitor in possession of this architecture would be able to replicate the core predictive capability of LumosEdge without the years of investment required to develop it independently. (Fong Decl. ¶¶ 8–12.) The economic value of this information is self-evident.
The Proprietary Feature-Engineering Libraries. Lumos's library of 2,847 individual engineered features represents a significant intellectual investment in the domain of financial signal generation. Each feature was developed through iterative experimentation and reflects deep domain expertise at the intersection of machine learning and quantitative finance. The selection and design of these features is proprietary to Lumos; the features are not published, and their specifications are not available outside of Lumos's engineering organization. Possession of these libraries would confer an enormous competitive advantage upon any competitor. (Fong Decl. ¶¶ 13–17.)
The DataStream ETL Pipeline Codebase. The DataStream pipeline codebase — encompassing custom integration code, schema definitions, data-quality validation logic, and normalization routines for 43 alternative-data vendors — represents thousands of engineering hours of development. Each vendor integration is the product of detailed negotiation, technical reverse-engineering, and iterative refinement. A competitor with access to this codebase could bypass the substantial time and expense of building equivalent data pipelines from scratch. (Fong Decl. ¶¶ 18–22.)
The Curated Training Dataset. The approximately 14.6 terabytes of historical financial and alternative data assembled, cleaned, labeled, and validated by Lumos is irreplaceable. The dataset includes proprietary labels generated by Lumos's backtesting framework that encode the predictive value of specific data features. This labeling methodology is itself proprietary, and the dataset as a whole cannot be reconstructed without access to Lumos's historical labeling processes. (Fong Decl. ¶¶ 23–26.)
The Confidential LumosEdge 3.0 Product Roadmap. The 37-page product roadmap for 2023–2025 contains detailed specifications for unreleased features, new product modules, market expansion plans, and competitive positioning strategies. A competitor in possession of this roadmap would have advance knowledge of Lumos's strategic direction — information of obvious economic value in a competitive market. (Fong Decl. ¶¶ 27–29; Chandrasekaran Decl. ¶¶ 15–17.)
Courts have consistently held that proprietary software, codebases, algorithms, customer lists, and product roadmaps constitute protectable trade secrets under CUTSA where, as here, they derive independent economic value from their secrecy. See Morlife, Inc. v. Perry (1997) 56 Cal.App.4th 1514, 1521–1522 (customer list and pricing information constituted trade secrets); Huong Que, Inc. v. Luu (2007) 150 Cal.App.4th 400, 410 (proprietary recipes and formulas constitute trade secrets); 6 Witkin, Summary of Cal. Law (11th ed. 2021) Torts § 953. Here, the trade secrets at issue are not customer lists or pricing spreadsheets — they are the core technology of a $67 million ARR business, developed over years at a cost of tens of millions of dollars. The showing of independent economic value is overwhelming.
Reasonable Efforts to Maintain Secrecy. Lumos has taken extensive measures to protect the secrecy of its proprietary information. These measures include, but are not limited to, the following:
Contractual Protections. Lumos requires all employees to execute PIIAAs upon hire. The PIIAAs include confidentiality and non-disclosure obligations that survive termination for three years, a perpetual covenant not to use or disclose trade secrets, an assignment-of-inventions clause, and a requirement to return all company materials upon termination. (Chandrasekaran Decl. ¶ 26; Fong Decl., Exs. E–G.)
Technical Access Controls. Lumos maintains role-based access controls on its internal systems, codebases, and data repositories. Access to sensitive proprietary materials — including model architecture files, hyperparameter configurations, training datasets, and the product roadmap — is restricted to employees whose roles require such access. Lumos uses enterprise identity and access management ("IAM") systems to enforce these controls. (Fong Decl. ¶ 50.)
Information Security Policies. Lumos maintains a written Information Security Policy (Rev. 4.2, effective March 1, 2022) that prohibits the use of personal USB storage devices on company systems, requires the use of company-approved cloud storage and email systems for business purposes, and prohibits the transfer of proprietary information to personal accounts or devices. (Fong Decl. ¶ 51.)
Data Loss Prevention Monitoring. Lumos employs enterprise DLP software that monitors file transfers, email attachments, USB device connections, and cloud-storage synchronization across the company network. (Fong Decl. ¶ 52.)
Return-of-Materials Process. Lumos's standard offboarding process includes a requirement that departing employees return all company materials and certify in writing that they have not retained copies of proprietary information. (Chandrasekaran Decl. ¶ 28.)
These measures are more than sufficient to satisfy CUTSA's requirement of "reasonable" efforts to maintain secrecy. Morlife, 56 Cal.App.4th at 1522 (reasonable efforts need not be perfect or impenetrable; the question is whether the claimant took steps to prevent disclosure).
##### b. Defendants Misappropriated Lumos's Trade Secrets
Under CUTSA, "misappropriation" is defined to include both (i) "[a]cquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means" and (ii) "[d]isclosure or use of a trade secret of another without express or implied consent by a person who . . . [a]t the time of disclosure or use, knew or had reason to know that his or her knowledge of the trade secret was . . . [d]erived from or through a person who had utilized improper means to acquire it." Cal. Civ. Code § 3426.1(b). "Improper means" includes "theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means." Cal. Civ. Code § 3426.1(a).
Each Defendant acquired Lumos's trade secrets by improper means — specifically, through the unauthorized transfer of proprietary materials to personal accounts and devices in breach of their PIIAA obligations and in violation of Lumos's Information Security Policy. The evidence of acquisition is direct and documented:
Rajiv Anand transferred approximately 3.2 gigabytes of files — including model architecture specifications and hyperparameter configuration files — to his personal Hollowell Health IT account on September 26, 2022, four days before his resignation. (Fong Decl. ¶ 42, Ex. A.) Two days later, on September 28, 2022, Anand forwarded the confidential 37-page LumosEdge 3.0 Product Roadmap to his personal email address at r.anand.personal@vaultmail.com. (Fong Decl. ¶ 43, Ex. B.) Both transfers were unauthorized, were not performed for any Lumos business purpose, and violated Anand's PIIAA obligations and Lumos's Information Security Policy. These acts constitute acquisition of trade secrets by improper means — namely, breach of a duty to maintain secrecy.
Serena Mallick cloned the entire DataStream ETL pipeline repository — approximately 780 megabytes of proprietary source code, configuration files, and schema definitions — to a personal external USB hard drive (serial number WD-4837291) on October 10, 2022, four days before her resignation. (Fong Decl. ¶ 44, Ex. C.) The use of a personal USB storage device on a Lumos system was expressly prohibited by Lumos's Information Security Policy, and the transfer of the repository to a personal device was unauthorized and violated Mallick's PIIAA obligations. This act constitutes acquisition of trade secrets by improper means.
Derek Yun downloaded 47 proprietary Jupyter notebooks — containing feature-engineering code, model-training scripts, hyperparameter tuning results, and experimental logs — to a personal Larkspur Technologies account on October 18, 2022, three days before his resignation. (Fong Decl. ¶ 45, Ex. D.) This transfer was unauthorized, was not performed for any Lumos business purpose, and violated Yun's PIIAA obligations and Lumos's Information Security Policy. This act constitutes acquisition of trade secrets by improper means.
Use and Threatened Use. All three Defendants are now employed by NovaSpark, a directly competing startup that purports to offer AI-driven alternative-data analytics in a market directly overlapping with Lumos's LumosEdge offering. The exfiltrated materials are precisely the types of trade secrets necessary to build a competing product. The circumstantial evidence of use is overwhelming: NovaSpark was incorporated a mere three days after Anand's resignation; all three Defendants assumed senior technical roles at NovaSpark within days of resigning from Lumos; and NovaSpark secured $12 million in seed funding within six weeks of its incorporation — a pace of fundraising that is implausible without a pre-existing technical foundation built on Lumos's stolen technology. (Chandrasekaran Decl. ¶¶ 40–44.)
At the preliminary injunction stage, a plaintiff need not prove actual use; threatened misappropriation is sufficient to support injunctive relief under CUTSA. Cal. Civ. Code § 3426.2 (authorizing injunction to prevent "actual or threatened misappropriation"). The threat of use here is not merely hypothetical — it is all but certain. Three senior engineers, in possession of the exfiltrated trade secrets that correspond precisely to their respective areas of expertise, are now employed in senior roles at a direct competitor. The inference of imminent use is inescapable.
2. Breach of Contract — PIIAA Obligations and Restrictive Covenant Provisions. In addition to its CUTSA claims, Lumos is likely to prevail on its claims for breach of contract. Each Defendant executed a PIIAA containing express restrictive covenant provisions, and each Defendant has breached multiple provisions of that agreement.
To establish a claim for breach of contract under California law, a plaintiff must demonstrate: (1) the existence of a contract; (2) the plaintiff's performance or excuse for nonperformance; (3) the defendant's breach; and (4) resulting damages. The evidence here satisfies each element with respect to each Defendant.
Existence of the Contract. Each Defendant executed a PIIAA as a condition of employment. The executed PIIAAs are attached to the Declaration of Rachel Fong as Exhibits E, F, and G. (Fong Decl. ¶¶ 37–38.) The existence of enforceable contracts is not in dispute.
Lumos's Performance. Lumos fully performed its obligations under each PIIAA by employing the Defendants, providing them with access to proprietary information in connection with their duties, and compensating them for their services. (Chandrasekaran Decl. ¶¶ 19–25.)
Defendants' Breaches. The restrictive covenant obligations that each Defendant has breached include the following:
• The covenant not to use or disclose Lumos trade secrets at any time (PIIAA § 2(b));
• The confidentiality and non-disclosure provision surviving termination for three years (PIIAA § 2(a));
• The obligation to return all company materials upon termination (PIIAA § 6).
Specifically, Anand, Mallick, and Yun each failed to return company materials or confirm the deletion of Lumos proprietary information upon their departures — a direct breach of the return-of-materials obligation set forth in Section 6 of the PIIAA. (Chandrasekaran Decl. ¶ 28.) Each Defendant's unauthorized transfer of Lumos proprietary materials to personal accounts or devices constitutes a breach of the non-disclosure and confidentiality restrictive covenant provisions set forth in Section 2 of the PIIAA. And each Defendant's employment at NovaSpark, a direct competitor, while in possession of Lumos's trade secrets, constitutes an ongoing breach of the covenant not to use or disclose those trade secrets.
Lumos is likely to prevail on its breach of contract claims because the PIIAA terms are clear and unambiguous, the breaches are documented in Lumos's IT security logs, and the evidence of non-compliance is unambiguous. The analysis of each Defendant's specific breaches follows:
Rajiv Anand. Anand breached the PIIAA in multiple respects. First, he breached the confidentiality and non-disclosure provision by transferring approximately 3.2 gigabytes of files — including model architecture specifications and hyperparameter configuration files — to his personal Hollowell Health IT account on September 26, 2022. (Fong Decl. ¶ 42, Ex. A.) Second, he breached the same provision by forwarding the confidential 37-page LumosEdge 3.0 Product Roadmap to his personal email address on September 28, 2022. (Fong Decl. ¶ 43, Ex. B.) Third, he breached the return-of-materials obligation by failing to return all company materials upon his resignation and by failing to certify that no copies of proprietary information had been retained. (Chandrasekaran Decl. ¶ 28.) Fourth, he is breaching the covenant not to use or disclose trade secrets by serving as CEO of NovaSpark while in possession of Lumos's proprietary model architecture, hyperparameter files, and product roadmap — materials that are directly relevant to the construction of a competing AI-driven analytics product.
Serena Mallick. Mallick breached the PIIAA by cloning the entire DataStream ETL pipeline repository — approximately 780 megabytes of proprietary source code, configuration files, and schema definitions — to a personal USB hard drive on October 10, 2022. (Fong Decl. ¶ 44, Ex. C.) She further breached the return-of-materials obligation by failing to return all company materials upon her resignation. (Chandrasekaran Decl. ¶ 28.) She is continuing to breach the covenant not to use or disclose trade secrets by serving as Vice President of Engineering at NovaSpark while in possession of Lumos's proprietary data pipeline architecture — the very technology she was responsible for building and maintaining at Lumos. Mallick's role at NovaSpark — VP of Engineering responsible for the company's technical infrastructure — makes it virtually certain that she is drawing upon her knowledge of, and access to, the DataStream pipeline codebase in her work for NovaSpark.
Derek Yun. Yun breached the PIIAA by downloading 47 proprietary Jupyter notebooks — containing feature-engineering code, model-training scripts, and experimental logs — to his personal Larkspur Technologies account on October 18, 2022. (Fong Decl. ¶ 45, Ex. D.) He breached the return-of-materials obligation by failing to return all company materials upon his resignation. (Chandrasekaran Decl. ¶ 28.) He is continuing to breach the covenant not to use or disclose trade secrets by serving as a founding engineer at NovaSpark while in possession of Lumos's proprietary feature-engineering code and model-training scripts. As a founding engineer at an early-stage startup, Yun's day-to-day work would necessarily involve the very types of machine-learning tasks for which the exfiltrated notebooks were designed.
The breaches are clear, documented, and ongoing. Lumos is highly likely to prevail on its breach of contract claims.
3. Breach of Duty of Loyalty. Under California law, an employee owes a duty of loyalty to the employer during the term of employment. This duty prohibits the employee from acting in a manner that is adverse to the employer's interests while still employed, including misappropriating the employer's proprietary information for personal benefit or for the benefit of a competitor. Stokes v. Dole Nut Co. (1995) 41 Cal.App.4th 285, 295; Hilb, Rogal & Hamilton Ins. Services v. Robb (1995) 33 Cal.App.4th 1812, 1820; Ashbury Partners LLC (2009) 179 Cal.App.4th 564, 577.
Each Defendant engaged in the unauthorized exfiltration of Lumos's trade secrets during the final days of his or her employment — while still subject to the duty of loyalty owed to Lumos as an employer.
Rajiv Anand. Anand's transfers occurred on September 26 and September 28, 2022. His employment at Lumos did not end until September 30, 2022. Thus, at the time he transferred 3.2 gigabytes of proprietary files to his personal Hollowell Health IT and forwarded the LumosEdge 3.0 Product Roadmap to his personal email, he was an active Lumos employee subject to the full scope of the duty of loyalty. (Fong Decl. ¶¶ 42–43.)
Serena Mallick. Mallick's cloning of the DataStream ETL repository to a personal USB drive occurred on October 10, 2022. Her employment at Lumos did not end until October 14, 2022. She was therefore an active Lumos employee at the time of the exfiltration, subject to the duty of loyalty. (Fong Decl. ¶ 44.)
Derek Yun. Yun's download of 47 Jupyter notebooks to his personal Larkspur Technologies account occurred on October 18, 2022. His employment at Lumos did not end until October 21, 2022. He was therefore an active Lumos employee at the time of the exfiltration, subject to the duty of loyalty. (Fong Decl. ¶ 45.)
The coordinated nature of the departures, the near-immediate formation of NovaSpark, and the targeted exfiltration activity conducted while each Defendant was still employed at Lumos compel the conclusion that Defendants planned and executed this scheme while still owing a fiduciary duty of loyalty to Lumos. Each Defendant took affirmative steps to steal proprietary information for the express purpose of using it to compete with Lumos — conduct that is squarely prohibited by the duty of loyalty. Hilb, Rogal, 33 Cal.App.4th at 1820 (employees breach duty of loyalty by secretly planning and preparing to compete with employer using employer's proprietary information). Lumos is likely to prevail on its breach-of-duty-of-loyalty claims against each individual Defendant.
4. Unfair Business Practices (Cal. Bus. & Prof. Code § 17200). California's Unfair Competition Law ("UCL"), Bus. & Prof. Code § 17200 et seq., prohibits any "unlawful, unfair, or fraudulent business act or practice." The statute is construed broadly and provides an independent basis for equitable relief.
NovaSpark's use of misappropriated trade secrets to compete with Lumos constitutes an unlawful, unfair, and fraudulent business practice under the UCL. The "unlawful" prong of Section 17200 is satisfied because NovaSpark's conduct constitutes a violation of CUTSA and a breach of the PIIAAs — each of which is an independent violation of law that can serve as a predicate for a UCL claim. The "unfair" prong is independently satisfied because leveraging stolen trade secrets provides NovaSpark an unearned and illegitimate competitive advantage that undermines the integrity of the marketplace. A competitor that enters the market with a product built on misappropriated technology enjoys an unfair head start that distorts competition and harms not only the trade-secret owner but also competitors who develop technology through legitimate means.
Lumos is likely to prevail on its UCL claim, and the claim provides an additional independent basis for the injunctive relief requested herein.
5. Conversion. Under California law, conversion is the wrongful exercise of dominion over the personal property of another. The elements of a conversion claim are: (1) the plaintiff's ownership or right to possession of the property; (2) the defendant's conversion by a wrongful act or disposition of the plaintiff's property; and (3) damages.
Each Defendant exercised unauthorized dominion and control over Lumos's proprietary materials by transferring those materials to personal accounts and devices without Lumos's authorization and in violation of the PIIAA's return-of-materials obligations. Lumos had — and continues to have — a right to possess and control these materials. Defendants' unauthorized possession of Lumos's proprietary files, codebases, datasets, and documents constitutes conversion. Lumos is likely to prevail on its conversion claims.
B. Lumos Will Suffer Irreparable Harm Absent a Preliminary Injunction
It is well established under California law that the misappropriation of trade secrets, by its very nature, causes irreparable harm that cannot be adequately compensated by monetary damages. DVD Copy Control Ass'n, 31 Cal.4th at 878–879; Readylink Healthcare v. Cotton (2005) 126 Cal.App.4th 1006, 1024. Once trade secrets are disclosed or used by a competitor, the competitive advantage they confer is permanently diminished or destroyed. The proverbial bell cannot be unrung. This foundational principle animates CUTSA's express authorization of injunctive relief to prevent "actual or threatened misappropriation." Cal. Civ. Code § 3426.2(a).
The irreparable harms that Lumos faces absent a preliminary injunction are specific, severe, and ongoing:
1. Loss of Competitive Advantage. NovaSpark's use of Lumos's model architecture, feature-engineering libraries, and data pipelines would allow NovaSpark to replicate Lumos's core technology at a fraction of the cost and time that Lumos expended to develop it. Rachel Fong, Lumos's Vice President of Engineering, estimates that possession of Lumos's exfiltrated materials would save NovaSpark approximately 14 to 18 months of independent development time — time during which NovaSpark would otherwise need to recruit engineers, design and test model architectures, build data pipelines from scratch, assemble training datasets, and iterate through the trial-and-error process that characterizes machine-learning product development. (Fong Decl. ¶ 55.) This compression of the competitive timeline constitutes irreparable harm because it cannot be remedied after the fact; by the time this matter reaches trial, the competitive advantage will have been permanently lost.
2. Customer Diversion. NovaSpark is targeting the same market of institutional asset managers, hedge funds, and proprietary trading desks that Lumos serves. (Chandrasekaran Decl. ¶¶ 41–43.) Without an injunction, NovaSpark may use Lumos's trade secrets to win customers away from Lumos — including Lumos's existing customers. The loss of customer relationships in the institutional financial services market is particularly harmful because these relationships are built over extended periods through sustained engagement, and once lost, they are exceedingly difficult to recover. Moreover, the harm from customer diversion is inherently difficult to quantify because it involves not only the revenue attributable to lost contracts but also the reputational damage and loss of referral opportunities that accompany such losses. (Chandrasekaran Decl. ¶¶ 45–47.)
3. Erosion of Investor Confidence. Lumos's investors — including Ridgeline Ventures (Series B lead, General Partner Helen Trask) and Northstar Growth Equity (Series D lead, Managing Director Jonathan Holt) — have invested $185 million in Lumos based in large part on the proprietary nature of Lumos's technology and its defensibility against competitive threats. (Chandrasekaran Decl. ¶¶ 7, 48.) Unchecked misappropriation of Lumos's core technology undermines the premise of that investment and jeopardizes Lumos's ability to raise future capital. The erosion of investor confidence cannot be remedied by damages because it affects Lumos's valuation, its ability to attract new investors, and its strategic positioning in a capital-intensive industry. (Chandrasekaran Decl. ¶ 49.)
4. Inability to "Unring the Bell." The disclosure or use of trade secrets cannot be undone. Once Defendants have used Lumos's model architecture to build NovaSpark's product, or incorporated Lumos's feature-engineering logic into NovaSpark's codebase, or leveraged the DataStream pipeline architecture to accelerate NovaSpark's data-ingestion capabilities, the competitive harm is permanently inflicted. Monetary damages — even if quantifiable — are inherently inadequate to compensate for the permanent loss of trade-secret protection. O'Grady v. Superior Court (2006) 139 Cal.App.4th 1423, 1445 (noting that "the whole point of a trade secret is that once disclosed, the trade secret holder can never be made whole by an award of damages").
5. Product Roadmap Compromise. The LumosEdge 3.0 Product Roadmap — a 37-page document revealing Lumos's unreleased product specifications for 2023–2025 — is in Anand's possession. If NovaSpark gains insight into Lumos's future product plans, market expansion strategies, and competitive positioning, the strategic harm to Lumos is incalculable. A competitor with advance knowledge of Lumos's product roadmap can preempt Lumos's planned launches, develop features designed to neutralize Lumos's innovations before they reach the market, and position itself to intercept Lumos's target customers. This type of forward-looking strategic harm is, by definition, not susceptible to measurement or compensation through monetary damages. (Chandrasekaran Decl. ¶¶ 50–52.)
The ongoing nature of the harm makes immediate injunctive relief critical. As of the date of this filing, all three individual Defendants continue to be employed at NovaSpark in senior technical roles. They remain in possession of the exfiltrated materials. NovaSpark continues to develop its product. With each day that passes, the risk of further use and disclosure of Lumos's trade secrets grows, and the resulting competitive harm becomes more deeply embedded and more difficult to remedy.
Courts addressing trade secret misappropriation have recognized a presumption of irreparable harm where, as here, the evidence demonstrates actual misappropriation through exfiltration of proprietary materials. See FLIR Systems, Inc. v. Parrish (9th Cir. 2005) 174 F. App'x 724, 726–727 (applying California law); Readylink Healthcare, 126 Cal.App.4th at 1024. That presumption is amply supported by the specific, concrete harms identified above. Lumos will suffer irreparable harm absent a preliminary injunction.
C. The Balance of Hardships Tips Decidedly in Lumos's Favor
The balance of hardships weighs overwhelmingly in Lumos's favor.
Harm to Lumos absent an injunction. If the Court denies the requested injunction, Lumos faces the permanent loss of trade-secret protection for its most valuable proprietary technology, ongoing competitive erosion from a rival built on stolen technology, the diversion of customers, and the destruction of years of research and development investment valued in the tens of millions of dollars — all supporting a $67 million ARR business. Once these harms materialize, they cannot be reversed. The competitive landscape, once distorted by the introduction of a product built on misappropriated trade secrets, cannot be restored to its prior state.
Harm to Defendants from issuance of the injunction. By contrast, the harm to Defendants from the issuance of the requested injunction is minimal. The injunction would merely require Defendants to comply with their existing contractual obligations under their PIIAAs and the restrictive covenant provisions contained therein. Each Defendant voluntarily entered into a PIIAA that prohibited the very conduct at issue — the unauthorized use, disclosure, and retention of Lumos's trade secrets. The injunction does not ask the Court to impose new obligations on Defendants; it asks the Court to enforce the obligations Defendants freely assumed.
Critically, the requested injunction does not seek to prevent any Defendant from working in his or her field. NovaSpark may continue to operate and to develop products using independently created or publicly available technology. The individual Defendants are free to apply their general skills and expertise — which are not at issue — to any lawful purpose. The injunction seeks only to prevent the use of Lumos's stolen materials in the construction of a competing product. This is a narrow, targeted form of relief that imposes no hardship beyond the requirement that Defendants compete fairly.
Moreover, the individual Defendants assumed the risk of injunction by entering into PIIAAs containing restrictive covenant provisions that expressly prohibited the unauthorized use and disclosure of Lumos's trade secrets. Having voluntarily accepted these obligations as a condition of their employment — and the substantial compensation that accompanied it — Defendants cannot credibly claim hardship from being held to those obligations. See In re Providian Credit Card Cases (2002) 96 Cal.App.4th 292, 313 (the self-inflicted nature of a defendant's harm undermines any claim of hardship in the balancing analysis).
The balance of hardships tips decidedly in Lumos's favor.
D. The Public Interest Supports Issuance of a Preliminary Injunction
The public interest favors the issuance of the requested preliminary injunction. California has a strong and longstanding public policy in favor of protecting trade secrets, as reflected in the Legislature's enactment of the California Uniform Trade Secrets Act. CUTSA represents a comprehensive legislative framework for the protection of proprietary information, and its injunctive relief provision was specifically designed to provide courts with the tools necessary to prevent the loss of trade-secret protection before it becomes irreversible. Cal. Civ. Code § 3426.2.
Enforcement of confidentiality agreements a

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SANTA CLARA

TABLE OF CONTENTS

TABLE OF AUTHORITIES

I. INTRODUCTION

II. STATEMENT OF FACTS

III. LEGAL STANDARD FOR PRELIMINARY INJUNCTION

IV. ARGUMENT

Record

Parties

Dates

Amounts