1008-00005 · Lumos Analytics Inc · Pleadings

proposed-pi-order.docx DOCUMENT Litigation

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SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SANTA CLARA

PREAMBLE AND RECITALS

The Court, having considered the motion of Plaintiff Lumos Analytics Inc. ("Lumos" or "Plaintiff") for a preliminary injunction against Defendants NovaSpark Technologies Inc. ("NovaSpark"), Rajiv Anand ("Anand"), Serena Mallick ("Mallick"), and Derek Yun ("Yun") (collectively, "Defendants"), makes the following findings and enters the following Order:

WHEREAS, on January 19, 2023, Plaintiff Lumos Analytics Inc. filed its Verified Complaint in this action, asserting claims against Defendants for: (1) misappropriation of trade secrets in violation of the California Uniform Trade Secrets Act, California Civil Code Sections 3426 through 3426.11 ("CUTSA"); (2) breach of contract, specifically each individual Defendant's Proprietary Information and Inventions Assignment Agreement ("PIIAA"); (3) breach of the duty of loyalty owed by the individual Defendants to Lumos during the term of their respective employment; (4) unfair business practices in violation of California Business and Professions Code Section 17200, et seq.; and (5) conversion of Lumos's proprietary data, files, code, and materials;

WHEREAS, simultaneously with the filing of its Verified Complaint, Plaintiff filed an Ex Parte Application for a Temporary Restraining Order and an Order to Show Cause Re: Preliminary Injunction on January 19, 2023, supported by a memorandum of points and authorities, declarations, and documentary exhibits;

WHEREAS, on January 23, 2023, the Court granted Plaintiff's application for a Temporary Restraining Order, enjoining Defendants from using, disclosing, or disseminating any Lumos proprietary information or trade secrets, and set the matter for hearing on Plaintiff's motion for a preliminary injunction;

WHEREAS, on February 2, 2023, Defendants NovaSpark Technologies Inc., Rajiv Anand, Serena Mallick, and Derek Yun, through their counsel of record, Patricia Whitfield and Samuel Gerber of Whitfield, Raines & Gerber LLP, filed their Opposition to Plaintiff's Motion for Preliminary Injunction, supported by declarations and documentary exhibits;

WHEREAS, on February 7, 2023, Plaintiff filed its Reply Memorandum in Support of the Motion for Preliminary Injunction, together with supplemental declarations and exhibits;

WHEREAS, on February 10, 2023, the Court held a hearing on Plaintiff's motion for preliminary injunction, at which Marcus Delgado and Wendy Schultz of Calderwood & Harkness LLP appeared on behalf of Plaintiff Lumos Analytics Inc., and Patricia Whitfield and Samuel Gerber of Whitfield, Raines & Gerber LLP appeared on behalf of Defendants NovaSpark Technologies Inc., Rajiv Anand, Serena Mallick, and Derek Yun;

WHEREAS, the Court has reviewed and considered the Verified Complaint, the pleadings, the memoranda of points and authorities filed by both Plaintiff and Defendants, the declarations submitted in support of and in opposition to the motion — including, without limitation, the Declaration of Priya Chandrasekaran, Chief Executive Officer of Lumos Analytics Inc., and the Declaration of Rachel Fong, Vice President of Engineering of Lumos Analytics Inc. — together with all exhibits attached thereto, and the oral arguments of counsel presented at the February 10, 2023 hearing; and

WHEREAS, the Court has considered the applicable legal standards governing the issuance of a preliminary injunction under California law, including but not limited to the factors set forth in IT Corp. v. County of Imperial (1983) 35 Cal.3d 63, 69–70, and ReadyLink Healthcare v. Cotton (2005) 126 Cal.App.4th 1006, 1016, namely: (i) the likelihood that Plaintiff will prevail on the merits at trial; (ii) whether Plaintiff will suffer irreparable harm if injunctive relief is not granted; (iii) the balance of hardships between the parties; and (iv) whether the public interest favors the issuance of the injunction;

NOW, THEREFORE, the Court makes the following findings and enters the following Order:

FINDINGS OF THE COURT

I. LIKELIHOOD OF SUCCESS ON THE MERITS

A. Overview of Plaintiff's Claims and Business

1. The Court finds that Plaintiff Lumos Analytics Inc. has demonstrated a substantial likelihood of success on the merits of its claims under the California Uniform Trade Secrets Act, California Civil Code Sections 3426 through 3426.11, and for breach of the Proprietary Information and Inventions Assignment Agreements executed by each of the individual Defendants. The evidence presented by Plaintiff, when weighed against Defendants' opposition, establishes that Plaintiff is likely to prevail on these claims at trial.

2. Lumos Analytics Inc. is a corporation organized and existing under the laws of the State of Delaware, with its principal place of business and headquarters located in Santa Clara, California. Lumos is a software-as-a-service ("SaaS") company specializing in artificial-intelligence-driven financial analytics. As of the time of the events giving rise to this action, Lumos employed approximately 340 individuals. The evidence in the record establishes that Lumos generated approximately $67 million in annual recurring revenue in fiscal year 2022. Lumos's customers include institutional investors, hedge funds, asset managers, and proprietary trading desks, and Lumos competes in a highly specialized and competitive market for AI-driven alternative-data analytics products.

B. The Lumos Trade Secrets

3. The Court finds that Lumos has developed and maintained, through substantial investment of time, capital, and human resources, the following categories of confidential and proprietary information that qualify as trade secrets under CUTSA (collectively, the "Lumos Trade Secrets"):

(a) The "LumosEdge" ensemble machine-learning model architecture, including its proprietary neural-network topology, layer configurations, activation functions, loss-function designs, and hyperparameter configurations. The LumosEdge model architecture represents the culmination of over three years of research and development by Lumos's Machine Learning Infrastructure team and constitutes the core intellectual property underlying Lumos's flagship product offering. The specific combination of neural-network topology and hyperparameter tuning embodied in the LumosEdge architecture is not publicly known and derives independent economic value from not being generally known to, and not being readily ascertainable through proper means by, other persons who can obtain economic value from its disclosure or use.

(b) Lumos's proprietary feature-engineering libraries, containing two thousand eight hundred forty-seven (2,847) individual engineered features designed for financial signal generation. These features were developed by Lumos's engineering and data science teams over a period of approximately four years and represent a significant competitive advantage in Lumos's ability to extract predictive signals from financial and alternative data sources. The feature-engineering libraries are maintained in private repositories accessible only to authorized Lumos personnel and are subject to strict access controls and confidentiality protections.

(c) The "DataStream" extract, transform, and load ("ETL") pipeline codebase and associated data-schema definitions, which together govern the ingestion, normalization, transformation, and loading of data from forty-three (43) alternative-data vendors into Lumos's proprietary data infrastructure. The DataStream pipeline represents a highly customized and optimized system that enables Lumos to process large volumes of heterogeneous data from diverse external sources with minimal latency and maximum reliability. The codebase and schema definitions are proprietary to Lumos and are not available in the public domain.

(d) A curated and labeled training dataset of approximately fourteen and six-tenths (14.6) terabytes of historical financial data and alternative data, which Lumos has assembled, cleaned, labeled, and structured over the course of its operations. This training dataset is the product of significant investment and expertise and is essential to the training, validation, and ongoing refinement of the LumosEdge model. The dataset's value derives in substantial part from the proprietary labeling and curation methodologies applied by Lumos's data science team.

(e) Confidential product roadmap documents for the period 2023 through 2025, including, without limitation, the unreleased "LumosEdge 3.0" product specifications, a thirty-seven-page document detailing planned features, architectural changes, integration capabilities, target market segments, pricing strategies, and anticipated release timelines. These roadmap documents contain forward-looking strategic plans and competitive intelligence that Lumos treats as highly confidential and distributes only on a strict need-to-know basis within the organization.

4. The Court further finds that Lumos has taken reasonable measures to protect the secrecy of the Lumos Trade Secrets, including but not limited to: requiring all employees to execute the PIIAA prior to commencing employment; implementing role-based access controls on internal code repositories and data systems; maintaining encryption protocols for data at rest and in transit; conducting periodic security audits; and marking confidential documents with appropriate legends and restrictions. These measures satisfy the requirement under California Civil Code Section 3426.1(d)(2) that the information be "the subject of efforts that are reasonable under the circumstances to maintain its secrecy."

C. The Proprietary Information and Inventions Assignment Agreements

5. Each of the individual Defendants — Rajiv Anand, Serena Mallick, and Derek Yun — executed Lumos's standard-form Proprietary Information and Inventions Assignment Agreement ("PIIAA") as a condition of their respective employment with Lumos. Copies of the executed PIIAAs were submitted as exhibits to the Declaration of Priya Chandrasekaran. The PIIAAs are governed by California law and contain, among others, the following material provisions:

(a) An assignment-of-inventions clause, pursuant to which each individual Defendant assigned to Lumos all right, title, and interest in any inventions, improvements, discoveries, or works of authorship conceived, developed, or reduced to practice during the term of employment and related to the business of Lumos or resulting from tasks assigned to the employee, subject to the limitations of California Labor Code Section 2870.

(b) A confidentiality and non-disclosure provision, pursuant to which each individual Defendant agreed not to use or disclose any Lumos proprietary information or trade secrets, either during or after employment, for any purpose other than the performance of duties on behalf of Lumos. The confidentiality obligation survives the termination of employment for a period of three (3) years following the date of separation.

(c) A non-solicitation of employees clause, pursuant to which each individual Defendant agreed that, for a period of twelve (12) months following the date of separation from Lumos, the individual would not directly or indirectly solicit, recruit, induce, or encourage any employee of Lumos to leave Lumos's employment or to accept employment with any other person or entity.

(d) A restrictive covenant not to use or disclose Lumos trade secrets at any time, without temporal limitation, consistent with the protections afforded by CUTSA.

(e) A return-of-materials provision, pursuant to which each individual Defendant agreed that, upon the termination of employment for any reason, the individual would promptly return to Lumos all company materials, documents, files, data, devices, and other property in the individual's possession, custody, or control, and would certify in writing that all such materials had been returned and that no copies had been retained.

D. The Individual Defendants' Conduct

6. The evidence before the Court establishes the following facts regarding the conduct of each individual Defendant in the period preceding and following their respective separations from Lumos:

Rajiv Anand. Defendant Rajiv Anand served as Principal Engineer — ML Infrastructure at Lumos Analytics Inc. from approximately March 2019 through September 30, 2022. In this role, Anand had access to the LumosEdge model architecture, hyperparameter configurations, and confidential product roadmap documents. The evidence, including Lumos's internal IT audit logs and the Declaration of Rachel Fong, establishes that on September 26, 2022 — four days prior to his resignation — Anand transferred approximately 3.2 gigabytes of files from Lumos's internal systems to a personal Hollowell Health IT account. The transferred files included, among other items, model architecture specifications and hyperparameter configuration files for the LumosEdge system. On September 28, 2022 — two days before his resignation — Anand forwarded the confidential LumosEdge 3.0 Product Roadmap, a 37-page PDF document, to his personal email address, r.anand.personal@vaultmail.com. Anand resigned from Lumos on September 30, 2022. Three days later, on October 3, 2022, Anand incorporated NovaSpark Technologies Inc. in the State of Delaware. At no time did Anand return the materials he had transferred to his personal accounts, nor did he certify the deletion of Lumos proprietary information, as required by the return-of-materials provision of his PIIAA.

Serena Mallick. Defendant Serena Mallick served as Senior Software Engineer — Data Pipelines at Lumos Analytics Inc. from approximately June 2020 through October 14, 2022. In this role, Mallick was a primary developer and maintainer of the DataStream ETL pipeline. The evidence, including forensic analysis of Lumos's system access logs, establishes that on October 10, 2022 — four days before her resignation — Mallick cloned the entire DataStream ETL pipeline repository, comprising approximately 780 megabytes of source code, configuration files, and data-schema definitions, to a personal external USB drive bearing the serial number WD-4837291. Mallick resigned from Lumos on October 14, 2022, and commenced employment with NovaSpark Technologies Inc. as Vice President of Engineering on October 17, 2022 — a mere three calendar days after her departure from Lumos. Mallick did not return the USB drive or the cloned repository to Lumos, nor did she provide the return-of-materials certification required by her PIIAA.

Derek Yun. Defendant Derek Yun served as Machine Learning Engineer II at Lumos Analytics Inc. from approximately January 2021 through October 21, 2022. In this role, Yun worked extensively on feature engineering, model training, and the development and maintenance of Lumos's proprietary Jupyter notebook library. The evidence establishes that on October 18, 2022 — three days before his resignation — Yun downloaded forty-seven (47) proprietary Jupyter notebooks from Lumos's internal systems to a personal Larkspur Technologies account. These notebooks contained feature-engineering code, model-training scripts, and related proprietary methodologies. Yun resigned from Lumos on October 21, 2022, and joined NovaSpark Technologies Inc. as a founding engineer on October 24, 2022. Like Anand and Mallick, Yun did not return the downloaded materials or certify the deletion of Lumos proprietary information upon his departure.

7. The Court notes that none of the three individual Defendants returned company materials or confirmed the deletion of Lumos proprietary information upon their respective departures from Lumos, as each was obligated to do under the return-of-materials provision of their respective PIIAAs. This failure persists to the date of this hearing.

E. NovaSpark Technologies Inc.

8. NovaSpark Technologies Inc. was incorporated in the State of Delaware on October 3, 2022, by Defendant Rajiv Anand. NovaSpark purports to offer AI-driven alternative-data analytics for hedge funds and proprietary trading desks — a product offering and target market that directly and substantially overlap with Lumos's core business and customer base. In November 2022, NovaSpark received $12 million in seed funding from Blackpine Capital Partners LP. The timing of NovaSpark's formation — within days of the individual Defendants' departures from Lumos — together with the nature of NovaSpark's purported product offering, the rapid assembly of a team comprising three former Lumos engineers with deep knowledge of Lumos's most sensitive proprietary technology, and the evidence of data exfiltration detailed above, give rise to a strong inference that NovaSpark's business is predicated, at least in part, on the Lumos Trade Secrets misappropriated by the individual Defendants.

F. The IT Security Investigation

9. On December 12, 2022, Lumos's IT security team identified anomalous data-exfiltration activity during a routine review of system access logs and data-loss-prevention alerts. The investigation revealed the specific file transfers, downloads, and email transmissions described above in connection with each individual Defendant. The results of this investigation, together with the Declarations of Priya Chandrasekaran and Rachel Fong submitted in support of Plaintiff's motion, provide substantial evidentiary support for Plaintiff's claims.

G. Conclusion on Likelihood of Success

10. Based on the totality of the evidence presented, the Court finds that Plaintiff has established a strong likelihood of prevailing on the merits of its claims under CUTSA and for breach of the PIIAA. The evidence demonstrates that the individual Defendants acquired Lumos Trade Secrets by improper means — specifically, through unauthorized copying, downloading, and transmission of proprietary materials in breach of their obligations of confidentiality and in violation of the duties imposed by their PIIAAs. The evidence further supports the inference that Defendants have used or intend to use the Lumos Trade Secrets in the development of NovaSpark's competing product, in breach of the duty to maintain secrecy owed to Lumos by each individual Defendant.

II. IRREPARABLE HARM

11. The Court finds that Plaintiff Lumos Analytics Inc. has demonstrated that it will suffer irreparable harm in the absence of preliminary injunctive relief.

12. Trade secrets, by their very nature, derive their value from their secrecy. Once disclosed to competitors or incorporated into a competing product, the competitive advantage conferred by trade secrets is permanently and irrevocably lost. The harm resulting from such disclosure cannot be adequately compensated through an award of monetary damages after the fact. See Readylink Healthcare v. Cotton (2005) 126 Cal.App.4th 1006, 1024 ("The loss of trade secrets is not compensable merely in terms of money damages."); FLIR Systems, Inc. v. Parrish (2009) 174 Cal.App.4th 1270, 1277.

13. In this case, the Lumos Trade Secrets at risk of misappropriation and misuse include the LumosEdge ensemble machine-learning model architecture, including its proprietary neural-network topology and hyperparameter configurations; the 2,847 individually engineered features in Lumos's proprietary feature-engineering libraries; the DataStream ETL pipeline codebase and data-schema definitions; the 14.6-terabyte curated and labeled training dataset; and the confidential LumosEdge 3.0 product roadmap. Each of these categories of trade secrets represents the product of years of investment, development, and refinement by Lumos, and each provides Lumos with a significant competitive advantage in its market. If these trade secrets are disclosed to or used by NovaSpark — a direct competitor targeting the same customer base — the competitive harm to Lumos would be immediate, severe, and irreparable.

14. The Court further notes that Defendants' continued possession of the misappropriated materials creates an ongoing and unacceptable risk of further disclosure and use. The individual Defendants have not returned the materials they exfiltrated, and NovaSpark is actively developing and marketing a competing product. Each day that Defendants retain possession of Lumos Trade Secrets increases the risk that those secrets will be further disseminated or irreversibly embedded in NovaSpark's technology, making any future remedy inadequate.

15. Additionally, the Court observes that under California Civil Code Section 3426.2, a presumption of irreparable harm arises from the threatened misappropriation of trade secrets. The evidence before the Court amply supports the conclusion that trade secret misappropriation has occurred and that further misappropriation is threatened.

16. Accordingly, the Court finds that Plaintiff has satisfied its burden of demonstrating irreparable harm.

III. BALANCE OF HARDSHIPS

17. The Court finds that the balance of hardships tips decidedly in favor of Plaintiff Lumos Analytics Inc.

18. Lumos has invested substantial resources in developing its proprietary technology over multiple years and across multiple funding rounds, having raised a total of approximately $185 million in venture capital through its Series D financing. The Lumos Trade Secrets represent the crown jewels of Lumos's business and the foundation of its competitive position. If Defendants are permitted to continue to possess, use, or disclose these trade secrets, Lumos faces a serious and potentially catastrophic threat to its market position, customer relationships, and future growth.

19. In contrast, the hardship to Defendants from compliance with the preliminary injunction is comparatively modest and, in any event, is largely self-imposed. The injunction does not prohibit Defendants from working in the field of artificial intelligence or financial analytics. It does not prevent NovaSpark from operating as a business, hiring employees, or developing products. The injunction prohibits only the use of Lumos's proprietary trade secrets — information to which Defendants have no right and which they obtained through improper means. Defendants remain free to develop products using independently created technology, publicly available information, and their own general skills and knowledge.

20. To the extent that Defendants contend they will suffer hardship from being required to return or sequester materials containing Lumos Trade Secrets, such hardship is the direct and foreseeable consequence of their own conduct in misappropriating those materials. A party cannot claim hardship arising from the loss of the fruits of its own wrongful conduct. See Donahue Schriber Realty Group, Inc. v. Nu Creation Outreach (2014) 232 Cal.App.4th 1171, 1183.

21. The balance of hardships accordingly weighs strongly in Plaintiff's favor.

IV. PUBLIC INTEREST

22. The Court finds that the public interest favors the issuance of the requested preliminary injunction.

23. The State of California has a strong public policy interest in the protection of trade secrets, as reflected in the enactment of the California Uniform Trade Secrets Act. The CUTSA is designed to promote innovation, investment, and fair competition by ensuring that companies that invest in the development of proprietary technology are able to protect that technology from misappropriation by former employees and competitors. Granting the preliminary injunction in this case serves these important policy objectives.

24. The public interest is also served by the enforcement of contractual obligations, including the PIIAA restrictive covenant provisions executed voluntarily by each of the individual Defendants as a condition of their employment with Lumos. Upholding the enforceability of such agreements promotes certainty, encourages investment in employee development and proprietary technology, and fosters a business environment in which companies and employees alike can rely on the commitments they have made.

25. No countervailing public interest has been identified that would weigh against the issuance of the injunction.

ORDER

Based on the foregoing findings, and for good cause shown, IT IS HEREBY ORDERED AS FOLLOWS:

1. Injunction Against Use and Disclosure

IT IS HEREBY ORDERED that Defendants NovaSpark Technologies Inc., Rajiv Anand, Serena Mallick, and Derek Yun, and their respective officers, directors, agents, servants, employees, attorneys, successors, assigns, and all persons acting in concert or participation with any of them who receive actual notice of this Order, are hereby ENJOINED and RESTRAINED, during the pendency of this action, from directly or indirectly:

(a) Using, disclosing, disseminating, publishing, distributing, licensing, or otherwise exploiting any of the Lumos Trade Secrets, including but not limited to:

(i) the LumosEdge ensemble machine-learning model architecture, including any and all proprietary neural-network topology designs, layer configurations, activation-function specifications, loss-function designs, and hyperparameter configurations;

(ii) the proprietary feature-engineering libraries containing two thousand eight hundred forty-seven (2,847) individually engineered features for financial signal generation;

(iii) the DataStream ETL pipeline codebase and data-schema definitions, including all source code, configuration files, scripts, and documentation related thereto;

(iv) the curated and labeled training dataset of approximately fourteen and six-tenths (14.6) terabytes of historical financial and alternative data; and

(v) the confidential product roadmap documents for the period 2023 through 2025, including, without limitation, the LumosEdge 3.0 specifications and any summaries, abstracts, or derivative works thereof.

(b) Possessing, retaining, storing, or maintaining copies, reproductions, excerpts, summaries, abstracts, compilations, or derivatives of any Lumos Trade Secrets, in any form whatsoever, whether electronic, physical, handwritten, printed, or otherwise, on any device, server, workstation, laptop, desktop computer, mobile phone, tablet, external storage drive, USB drive, cloud storage account (including but not limited to Hollowell Health IT, Larkspur Technologies, Meridian Systems, Cobalt Ridge Systems, or any similar service), email account, messaging application, code repository, or other medium or repository of any kind.

(c) Incorporating, embedding, adapting, reverse-engineering, replicating, or otherwise utilizing any Lumos Trade Secrets, in whole or in part, in the development, design, architecture, testing, debugging, optimization, training, marketing, demonstration, sale, licensing, or distribution of any product, service, platform, model, algorithm, dataset, pipeline, or technology of NovaSpark Technologies Inc. or any other entity or person.

2. Preservation of Evidence and Devices

IT IS FURTHER ORDERED that Defendants NovaSpark Technologies Inc., Rajiv Anand, Serena Mallick, and Derek Yun shall immediately preserve, and shall refrain from destroying, deleting, altering, modifying, overwriting, reformatting, wiping, degaussing, or otherwise tampering with or disposing of, all electronic devices, storage media, and repositories that contain, have contained, or may contain Lumos Trade Secrets or other Lumos proprietary information, including but not limited to:

(a) the external USB drive bearing serial number WD-4837291 referenced in the Declaration of Rachel Fong;

(b) all Hollowell Health IT accounts used by or associated with Defendant Rajiv Anand, including any account to which files were transferred on or about September 26, 2022;

(c) all Larkspur Technologies accounts used by or associated with Defendant Derek Yun, including any account to which files were downloaded on or about October 18, 2022;

(d) the email account r.anand.personal@vaultmail.com and any other personal email accounts used by any individual Defendant to transmit, receive, or store Lumos proprietary information;

(e) all servers, computers, laptops, desktops, workstations, mobile phones, tablets, and other electronic devices in the possession, custody, or control of any Defendant that were used to access, store, transfer, or process Lumos proprietary information; and

(f) all NovaSpark corporate servers, development environments, code repositories, databases, and cloud infrastructure accounts that may contain or reflect the use of Lumos Trade Secrets.

This preservation obligation is in addition to, and does not supersede or limit, any obligations imposed by law, rule, or prior court order.

3. Sequestration and Return of Materials

IT IS FURTHER ORDERED that, within fourteen (14) calendar days of the date of entry of this Order, Defendants shall:

(a) Identify and sequester all materials, documents, files, data, source code, object code, compiled code, notebooks, scripts, configurations, datasets, and information of any kind in their possession, custody, or control that constitute or contain Lumos Trade Secrets, whether in electronic or physical form;

(b) Prepare and serve upon counsel for Plaintiff a detailed written inventory of all such sequestered materials, specifying the nature, format, and storage location of each item; and

(c) Make all such sequestered materials available for inspection and forensic examination by a qualified, neutral, independent forensic examiner to be agreed upon by the parties within seven (7) calendar days of the date of entry of this Order, or, in the absence of agreement, to be appointed by the Court upon application by either party. The neutral forensic examiner shall prepare a report identifying all Lumos Trade Secrets and Lumos proprietary information found on Defendants' devices, accounts, and repositories, and shall provide copies of such report to counsel for both parties and to the Court. The costs of the forensic examination shall be borne initially by Plaintiff, subject to reallocation by the Court at a later stage of this action.

4. Prohibition on Solicitation of Lumos Employees

IT IS FURTHER ORDERED that Defendants Rajiv Anand, Serena Mallick, and Derek Yun are hereby enjoined, during the pendency of this action or until the expiration of the twelve-month post-separation non-solicitation period set forth in their respective PIIAAs, whichever is later, from directly or indirectly soliciting, recruiting, inducing, encouraging, or otherwise attempting to cause any current employee of Lumos Analytics Inc. to terminate his or her employment with Lumos, or to accept employment, consulting, or contractor work with NovaSpark Technologies Inc. or any other entity, consistent with the non-solicitation provisions contained in Section 6 of each individual Defendant's PIIAA.

5. Reporting and Compliance Obligations

IT IS FURTHER ORDERED that Defendants shall, within seven (7) calendar days of the date of entry of this Order, serve upon counsel for Plaintiff Lumos Analytics Inc., Calderwood & Harkness LLP, a written certification executed under penalty of perjury by each individual Defendant and by a duly authorized officer of NovaSpark Technologies Inc., identifying with specificity:

(a) All locations, whether physical or electronic, including but not limited to devices, drives, servers, cloud storage accounts, email accounts, code repositories, and any other media or repositories, where Lumos Trade Secrets or any other Lumos proprietary information are currently stored or have at any time been stored since September 1, 2022;

(b) The identity of all persons — whether employees, contractors, consultants, investors, advisors, or any other individuals or entities — to whom any Lumos Trade Secrets or Lumos proprietary information have been disclosed, transmitted, or made available, directly or indirectly, since September 1, 2022; and

(c) A detailed description of all steps that have been taken by each Defendant to comply with the terms of this Order, including the identification and sequestration of materials, the preservation of devices and accounts, and any deletions, returns, or transfers of Lumos proprietary information.

6. Bond. Pursuant to California Code of Civil Procedure Section 529, the Court orders that Plaintiff Lumos Analytics Inc. shall post a bond in the amount of Five Hundred Thousand Dollars ($500,000.00) to secure Defendants against any damages they may sustain by reason of the issuance of this preliminary injunction, in the event it is ultimately determined that the injunction was wrongfully issued. The bond shall be posted within five (5) business days of the date of entry of this Order, in the form of a surety bond issued by a California-admitted surety company, or in such other form as may be acceptable to the Court. The preliminary injunction shall not take effect until the bond is posted, except that the preservation obligations set forth in Paragraph 2 above shall take effect immediately upon entry of this Order.

7. Duration and Scope

This Preliminary Injunction shall remain in full force and effect until the entry of final judgment in this action, further order of this Court modifying or dissolving the injunction, or written agreement of the parties approved by the Court. Defendants may move to dissolve or modify this injunction upon a showing of changed circumstances or other good cause, in accordance with applicable law.

8. Reservation of Rights

Nothing in this Order shall be construed to limit, waive, or otherwise affect Plaintiff's right to seek additional or modified injunctive relief, contempt sanctions for violation of this Order, expedited discovery, or any other remedies as may be warranted by the circumstances of this case or applicable law. This Order is entered without prejudice to any party's claims, defenses, counterclaims, affirmative defenses, or positions in this action. The issuance of this Order does not constitute an adjudication of the merits of any claim or defense, and the Court's findings herein are made solely for purposes of evaluating Plaintiff's entitlement to preliminary injunctive relief.

9. Service. This Order shall be served upon all Defendants and their counsel of record, Patricia Whitfield and Samuel Gerber of Whitfield, Raines & Gerber LLP, 235 Montgomery Street, Suite 1800, San Francisco, California 94104, by personal service or electronic service in accordance with the California Rules of Court, within two (2) business days of the date of entry of this Order. Any person served with a copy of this Order, or who otherwise has actual notice of the terms of this Order, shall be bound by its provisions to the extent provided by law.

IT IS SO ORDERED.

Dated: February 17, 2023

________________________________________

HON. DAVID RUTHERFORD Judge of the Superior Court County of Santa Clara

SUBMITTED BY:

CALDERWOOD & HARKNESS LLP

By: ________

Marcus Delgado, Responsible Partner Wendy Schultz, Lead Associate

555 California Street, 40th Floor San Francisco, California 94104 Telephone: (415) 555-2800 Facsimile: (415) 555-2801

Attorneys for Plaintiff LUMOS ANALYTICS INC.

Date: February 10, 2023

PROOF OF SERVICE

Case No. 23-CV-004871

I, Omar Siddiqui, declare as follows:

I am employed in the City and County of San Francisco, State of California. I am over the age of eighteen (18) years and am not a party to the within action. My business address is 555 California Street, 40th Floor, San Francisco, California 94104.

On February 10, 2023, I served the following document(s):

[PROPOSED] ORDER GRANTING PRELIMINARY INJUNCTION

on the interested parties in this action by serving a true and correct copy on the following persons at the addresses or email addresses set forth below:

BY ELECTRONIC SERVICE: Based on a court order or an agreement of the parties to accept service by electronic transmission, I caused the above-referenced document(s) to be sent to the persons at the electronic service addresses listed above on February 10, 2023. Electronic service was completed at approximately 4:47 p.m. Pacific Standard Time. No electronic message or other indication that the transmission was unsuccessful was received within a reasonable time after the transmission.

I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on February 10, 2023, at San Francisco, California.

________________________________________

Omar Siddiqui Legal Support Specialist Calderwood & Harkness LLP

LUMOS ANALYTICS INC., a Delaware corporation,	Case No. 23-CV-004871
Plaintiff,	[PROPOSED] ORDER GRANTING PRELIMINARY INJUNCTION
v.	Dept.: 8

Judge: Hon. David Rutherford

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

Hearing Date: February 10, 2023

Defendants.

Filed by: Plaintiff Lumos Analytics Inc.

Date Submitted: February 10, 2023

Name	Firm / Address	Method of Service
Patricia Whitfield	Whitfield, Raines & Gerber LLP, 235 Montgomery Street, Suite 1800, San Francisco, CA 94104	Electronic Service
Samuel Gerber	Whitfield, Raines & Gerber LLP, 235 Montgomery Street, Suite 1800, San Francisco, CA 94104	Electronic Service

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
PREAMBLE AND RECITALS
The Court, having considered the motion of Plaintiff Lumos Analytics Inc. ("Lumos" or "Plaintiff") for a preliminary injunction against Defendants NovaSpark Technologies Inc. ("NovaSpark"), Rajiv Anand ("Anand"), Serena Mallick ("Mallick"), and Derek Yun ("Yun") (collectively, "Defendants"), makes the following findings and enters the following Order:
WHEREAS, on January 19, 2023, Plaintiff Lumos Analytics Inc. filed its Verified Complaint in this action, asserting claims against Defendants for: (1) misappropriation of trade secrets in violation of the California Uniform Trade Secrets Act, California Civil Code Sections 3426 through 3426.11 ("CUTSA"); (2) breach of contract, specifically each individual Defendant's Proprietary Information and Inventions Assignment Agreement ("PIIAA"); (3) breach of the duty of loyalty owed by the individual Defendants to Lumos during the term of their respective employment; (4) unfair business practices in violation of California Business and Professions Code Section 17200, et seq.; and (5) conversion of Lumos's proprietary data, files, code, and materials;
WHEREAS, simultaneously with the filing of its Verified Complaint, Plaintiff filed an Ex Parte Application for a Temporary Restraining Order and an Order to Show Cause Re: Preliminary Injunction on January 19, 2023, supported by a memorandum of points and authorities, declarations, and documentary exhibits;
WHEREAS, on January 23, 2023, the Court granted Plaintiff's application for a Temporary Restraining Order, enjoining Defendants from using, disclosing, or disseminating any Lumos proprietary information or trade secrets, and set the matter for hearing on Plaintiff's motion for a preliminary injunction;
WHEREAS, on February 2, 2023, Defendants NovaSpark Technologies Inc., Rajiv Anand, Serena Mallick, and Derek Yun, through their counsel of record, Patricia Whitfield and Samuel Gerber of Whitfield, Raines & Gerber LLP, filed their Opposition to Plaintiff's Motion for Preliminary Injunction, supported by declarations and documentary exhibits;
WHEREAS, on February 7, 2023, Plaintiff filed its Reply Memorandum in Support of the Motion for Preliminary Injunction, together with supplemental declarations and exhibits;
WHEREAS, on February 10, 2023, the Court held a hearing on Plaintiff's motion for preliminary injunction, at which Marcus Delgado and Wendy Schultz of Calderwood & Harkness LLP appeared on behalf of Plaintiff Lumos Analytics Inc., and Patricia Whitfield and Samuel Gerber of Whitfield, Raines & Gerber LLP appeared on behalf of Defendants NovaSpark Technologies Inc., Rajiv Anand, Serena Mallick, and Derek Yun;
WHEREAS, the Court has reviewed and considered the Verified Complaint, the pleadings, the memoranda of points and authorities filed by both Plaintiff and Defendants, the declarations submitted in support of and in opposition to the motion — including, without limitation, the Declaration of Priya Chandrasekaran, Chief Executive Officer of Lumos Analytics Inc., and the Declaration of Rachel Fong, Vice President of Engineering of Lumos Analytics Inc. — together with all exhibits attached thereto, and the oral arguments of counsel presented at the February 10, 2023 hearing; and
WHEREAS, the Court has considered the applicable legal standards governing the issuance of a preliminary injunction under California law, including but not limited to the factors set forth in IT Corp. v. County of Imperial (1983) 35 Cal.3d 63, 69–70, and ReadyLink Healthcare v. Cotton (2005) 126 Cal.App.4th 1006, 1016, namely: (i) the likelihood that Plaintiff will prevail on the merits at trial; (ii) whether Plaintiff will suffer irreparable harm if injunctive relief is not granted; (iii) the balance of hardships between the parties; and (iv) whether the public interest favors the issuance of the injunction;
NOW, THEREFORE, the Court makes the following findings and enters the following Order:
FINDINGS OF THE COURT
I. LIKELIHOOD OF SUCCESS ON THE MERITS
A. Overview of Plaintiff's Claims and Business
1.  The Court finds that Plaintiff Lumos Analytics Inc. has demonstrated a substantial likelihood of success on the merits of its claims under the California Uniform Trade Secrets Act, California Civil Code Sections 3426 through 3426.11, and for breach of the Proprietary Information and Inventions Assignment Agreements executed by each of the individual Defendants. The evidence presented by Plaintiff, when weighed against Defendants' opposition, establishes that Plaintiff is likely to prevail on these claims at trial.
2.  Lumos Analytics Inc. is a corporation organized and existing under the laws of the State of Delaware, with its principal place of business and headquarters located in Santa Clara, California. Lumos is a software-as-a-service ("SaaS") company specializing in artificial-intelligence-driven financial analytics. As of the time of the events giving rise to this action, Lumos employed approximately 340 individuals. The evidence in the record establishes that Lumos generated approximately $67 million in annual recurring revenue in fiscal year 2022. Lumos's customers include institutional investors, hedge funds, asset managers, and proprietary trading desks, and Lumos competes in a highly specialized and competitive market for AI-driven alternative-data analytics products.
B. The Lumos Trade Secrets
3.  The Court finds that Lumos has developed and maintained, through substantial investment of time, capital, and human resources, the following categories of confidential and proprietary information that qualify as trade secrets under CUTSA (collectively, the "Lumos Trade Secrets"):
(a) The "LumosEdge" ensemble machine-learning model architecture, including its proprietary neural-network topology, layer configurations, activation functions, loss-function designs, and hyperparameter configurations. The LumosEdge model architecture represents the culmination of over three years of research and development by Lumos's Machine Learning Infrastructure team and constitutes the core intellectual property underlying Lumos's flagship product offering. The specific combination of neural-network topology and hyperparameter tuning embodied in the LumosEdge architecture is not publicly known and derives independent economic value from not being generally known to, and not being readily ascertainable through proper means by, other persons who can obtain economic value from its disclosure or use.
(b) Lumos's proprietary feature-engineering libraries, containing two thousand eight hundred forty-seven (2,847) individual engineered features designed for financial signal generation. These features were developed by Lumos's engineering and data science teams over a period of approximately four years and represent a significant competitive advantage in Lumos's ability to extract predictive signals from financial and alternative data sources. The feature-engineering libraries are maintained in private repositories accessible only to authorized Lumos personnel and are subject to strict access controls and confidentiality protections.
(c) The "DataStream" extract, transform, and load ("ETL") pipeline codebase and associated data-schema definitions, which together govern the ingestion, normalization, transformation, and loading of data from forty-three (43) alternative-data vendors into Lumos's proprietary data infrastructure. The DataStream pipeline represents a highly customized and optimized system that enables Lumos to process large volumes of heterogeneous data from diverse external sources with minimal latency and maximum reliability. The codebase and schema definitions are proprietary to Lumos and are not available in the public domain.
(d) A curated and labeled training dataset of approximately fourteen and six-tenths (14.6) terabytes of historical financial data and alternative data, which Lumos has assembled, cleaned, labeled, and structured over the course of its operations. This training dataset is the product of significant investment and expertise and is essential to the training, validation, and ongoing refinement of the LumosEdge model. The dataset's value derives in substantial part from the proprietary labeling and curation methodologies applied by Lumos's data science team.
(e) Confidential product roadmap documents for the period 2023 through 2025, including, without limitation, the unreleased "LumosEdge 3.0" product specifications, a thirty-seven-page document detailing planned features, architectural changes, integration capabilities, target market segments, pricing strategies, and anticipated release timelines. These roadmap documents contain forward-looking strategic plans and competitive intelligence that Lumos treats as highly confidential and distributes only on a strict need-to-know basis within the organization.
4.  The Court further finds that Lumos has taken reasonable measures to protect the secrecy of the Lumos Trade Secrets, including but not limited to: requiring all employees to execute the PIIAA prior to commencing employment; implementing role-based access controls on internal code repositories and data systems; maintaining encryption protocols for data at rest and in transit; conducting periodic security audits; and marking confidential documents with appropriate legends and restrictions. These measures satisfy the requirement under California Civil Code Section 3426.1(d)(2) that the information be "the subject of efforts that are reasonable under the circumstances to maintain its secrecy."
C. The Proprietary Information and Inventions Assignment Agreements
5.  Each of the individual Defendants — Rajiv Anand, Serena Mallick, and Derek Yun — executed Lumos's standard-form Proprietary Information and Inventions Assignment Agreement ("PIIAA") as a condition of their respective employment with Lumos. Copies of the executed PIIAAs were submitted as exhibits to the Declaration of Priya Chandrasekaran. The PIIAAs are governed by California law and contain, among others, the following material provisions:
(a) An assignment-of-inventions clause, pursuant to which each individual Defendant assigned to Lumos all right, title, and interest in any inventions, improvements, discoveries, or works of authorship conceived, developed, or reduced to practice during the term of employment and related to the business of Lumos or resulting from tasks assigned to the employee, subject to the limitations of California Labor Code Section 2870.
(b) A confidentiality and non-disclosure provision, pursuant to which each individual Defendant agreed not to use or disclose any Lumos proprietary information or trade secrets, either during or after employment, for any purpose other than the performance of duties on behalf of Lumos. The confidentiality obligation survives the termination of employment for a period of three (3) years following the date of separation.
(c) A non-solicitation of employees clause, pursuant to which each individual Defendant agreed that, for a period of twelve (12) months following the date of separation from Lumos, the individual would not directly or indirectly solicit, recruit, induce, or encourage any employee of Lumos to leave Lumos's employment or to accept employment with any other person or entity.
(d) A restrictive covenant not to use or disclose Lumos trade secrets at any time, without temporal limitation, consistent with the protections afforded by CUTSA.
(e) A return-of-materials provision, pursuant to which each individual Defendant agreed that, upon the termination of employment for any reason, the individual would promptly return to Lumos all company materials, documents, files, data, devices, and other property in the individual's possession, custody, or control, and would certify in writing that all such materials had been returned and that no copies had been retained.
D. The Individual Defendants' Conduct
6.  The evidence before the Court establishes the following facts regarding the conduct of each individual Defendant in the period preceding and following their respective separations from Lumos:
Rajiv Anand. Defendant Rajiv Anand served as Principal Engineer — ML Infrastructure at Lumos Analytics Inc. from approximately March 2019 through September 30, 2022. In this role, Anand had access to the LumosEdge model architecture, hyperparameter configurations, and confidential product roadmap documents. The evidence, including Lumos's internal IT audit logs and the Declaration of Rachel Fong, establishes that on September 26, 2022 — four days prior to his resignation — Anand transferred approximately 3.2 gigabytes of files from Lumos's internal systems to a personal Hollowell Health IT account. The transferred files included, among other items, model architecture specifications and hyperparameter configuration files for the LumosEdge system. On September 28, 2022 — two days before his resignation — Anand forwarded the confidential LumosEdge 3.0 Product Roadmap, a 37-page PDF document, to his personal email address, r.anand.personal@vaultmail.com. Anand resigned from Lumos on September 30, 2022. Three days later, on October 3, 2022, Anand incorporated NovaSpark Technologies Inc. in the State of Delaware. At no time did Anand return the materials he had transferred to his personal accounts, nor did he certify the deletion of Lumos proprietary information, as required by the return-of-materials provision of his PIIAA.
Serena Mallick. Defendant Serena Mallick served as Senior Software Engineer — Data Pipelines at Lumos Analytics Inc. from approximately June 2020 through October 14, 2022. In this role, Mallick was a primary developer and maintainer of the DataStream ETL pipeline. The evidence, including forensic analysis of Lumos's system access logs, establishes that on October 10, 2022 — four days before her resignation — Mallick cloned the entire DataStream ETL pipeline repository, comprising approximately 780 megabytes of source code, configuration files, and data-schema definitions, to a personal external USB drive bearing the serial number WD-4837291. Mallick resigned from Lumos on October 14, 2022, and commenced employment with NovaSpark Technologies Inc. as Vice President of Engineering on October 17, 2022 — a mere three calendar days after her departure from Lumos. Mallick did not return the USB drive or the cloned repository to Lumos, nor did she provide the return-of-materials certification required by her PIIAA.
Derek Yun. Defendant Derek Yun served as Machine Learning Engineer II at Lumos Analytics Inc. from approximately January 2021 through October 21, 2022. In this role, Yun worked extensively on feature engineering, model training, and the development and maintenance of Lumos's proprietary Jupyter notebook library. The evidence establishes that on October 18, 2022 — three days before his resignation — Yun downloaded forty-seven (47) proprietary Jupyter notebooks from Lumos's internal systems to a personal Larkspur Technologies account. These notebooks contained feature-engineering code, model-training scripts, and related proprietary methodologies. Yun resigned from Lumos on October 21, 2022, and joined NovaSpark Technologies Inc. as a founding engineer on October 24, 2022. Like Anand and Mallick, Yun did not return the downloaded materials or certify the deletion of Lumos proprietary information upon his departure.
7.  The Court notes that none of the three individual Defendants returned company materials or confirmed the deletion of Lumos proprietary information upon their respective departures from Lumos, as each was obligated to do under the return-of-materials provision of their respective PIIAAs. This failure persists to the date of this hearing.
E. NovaSpark Technologies Inc.
8.  NovaSpark Technologies Inc. was incorporated in the State of Delaware on October 3, 2022, by Defendant Rajiv Anand. NovaSpark purports to offer AI-driven alternative-data analytics for hedge funds and proprietary trading desks — a product offering and target market that directly and substantially overlap with Lumos's core business and customer base. In November 2022, NovaSpark received $12 million in seed funding from Blackpine Capital Partners LP. The timing of NovaSpark's formation — within days of the individual Defendants' departures from Lumos — together with the nature of NovaSpark's purported product offering, the rapid assembly of a team comprising three former Lumos engineers with deep knowledge of Lumos's most sensitive proprietary technology, and the evidence of data exfiltration detailed above, give rise to a strong inference that NovaSpark's business is predicated, at least in part, on the Lumos Trade Secrets misappropriated by the individual Defendants.
F. The IT Security Investigation
9.  On December 12, 2022, Lumos's IT security team identified anomalous data-exfiltration activity during a routine review of system access logs and data-loss-prevention alerts. The investigation revealed the specific file transfers, downloads, and email transmissions described above in connection with each individual Defendant. The results of this investigation, together with the Declarations of Priya Chandrasekaran and Rachel Fong submitted in support of Plaintiff's motion, provide substantial evidentiary support for Plaintiff's claims.
G. Conclusion on Likelihood of Success
10.  Based on the totality of the evidence presented, the Court finds that Plaintiff has established a strong likelihood of prevailing on the merits of its claims under CUTSA and for breach of the PIIAA. The evidence demonstrates that the individual Defendants acquired Lumos Trade Secrets by improper means — specifically, through unauthorized copying, downloading, and transmission of proprietary materials in breach of their obligations of confidentiality and in violation of the duties imposed by their PIIAAs. The evidence further supports the inference that Defendants have used or intend to use the Lumos Trade Secrets in the development of NovaSpark's competing product, in breach of the duty to maintain secrecy owed to Lumos by each individual Defendant.
II. IRREPARABLE HARM
11.  The Court finds that Plaintiff Lumos Analytics Inc. has demonstrated that it will suffer irreparable harm in the absence of preliminary injunctive relief.
12.  Trade secrets, by their very nature, derive their value from their secrecy. Once disclosed to competitors or incorporated into a competing product, the competitive advantage conferred by trade secrets is permanently and irrevocably lost. The harm resulting from such disclosure cannot be adequately compensated through an award of monetary damages after the fact. See Readylink Healthcare v. Cotton (2005) 126 Cal.App.4th 1006, 1024 ("The loss of trade secrets is not compensable merely in terms of money damages."); FLIR Systems, Inc. v. Parrish (2009) 174 Cal.App.4th 1270, 1277.
13.  In this case, the Lumos Trade Secrets at risk of misappropriation and misuse include the LumosEdge ensemble machine-learning model architecture, including its proprietary neural-network topology and hyperparameter configurations; the 2,847 individually engineered features in Lumos's proprietary feature-engineering libraries; the DataStream ETL pipeline codebase and data-schema definitions; the 14.6-terabyte curated and labeled training dataset; and the confidential LumosEdge 3.0 product roadmap. Each of these categories of trade secrets represents the product of years of investment, development, and refinement by Lumos, and each provides Lumos with a significant competitive advantage in its market. If these trade secrets are disclosed to or used by NovaSpark — a direct competitor targeting the same customer base — the competitive harm to Lumos would be immediate, severe, and irreparable.
14.  The Court further notes that Defendants' continued possession of the misappropriated materials creates an ongoing and unacceptable risk of further disclosure and use. The individual Defendants have not returned the materials they exfiltrated, and NovaSpark is actively developing and marketing a competing product. Each day that Defendants retain possession of Lumos Trade Secrets increases the risk that those secrets will be further disseminated or irreversibly embedded in NovaSpark's technology, making any future remedy inadequate.
15.  Additionally, the Court observes that under California Civil Code Section 3426.2, a presumption of irreparable harm arises from the threatened misappropriation of trade secrets. The evidence before the Court amply supports the conclusion that trade secret misappropriation has occurred and that further misappropriation is threatened.
16.  Accordingly, the Court finds that Plaintiff has satisfied its burden of demonstrating irreparable harm.
III. BALANCE OF HARDSHIPS
17.  The Court finds that the balance of hardships tips decidedly in favor of Plaintiff Lumos Analytics Inc.
18.  Lumos has invested substantial resources in developing its proprietary technology over multiple years and across multiple funding rounds, having raised a total of approximately $185 million in venture capital through its Series D financing. The Lumos Trade Secrets represent the crown jewels of Lumos's business and the foundation of its competitive position. If Defendants are permitted to continue to possess, use, or disclose these trade secrets, Lumos faces a serious and potentially catastrophic threat to its market position, customer relationships, and future growth.
19.  In contrast, the hardship to Defendants from compliance with the preliminary injunction is comparatively modest and, in any event, is largely self-imposed. The injunction does not prohibit Defendants from working in the field of artificial intelligence or financial analytics. It does not prevent NovaSpark from operating as a business, hiring employees, or developing products. The injunction prohibits only the use of Lumos's proprietary trade secrets — information to which Defendants have no right and which they obtained through improper means. Defendants remain free to develop products using independently created technology, publicly available information, and their own general skills and knowledge.
20.  To the extent that Defendants contend they will suffer hardship from being required to return or sequester materials containing Lumos Trade Secrets, such hardship is the direct and foreseeable consequence of their own conduct in misappropriating those materials. A party cannot claim hardship arising from the loss of the fruits of its own wrongful conduct. See Donahue Schriber Realty Group, Inc. v. Nu Creation Outreach (2014) 232 Cal.App.4th 1171, 1183.
21.  The balance of hardships accordingly weighs strongly in Plaintiff's favor.
IV. PUBLIC INTEREST
22.  The Court finds that the public interest favors the issuance of the requested preliminary injunction.
23.  The State of California has a strong public policy interest in the protection of trade secrets, as reflected in the enactment of the California Uniform Trade Secrets Act. The CUTSA is designed to promote innovation, investment, and fair competition by ensuring that companies that invest in the development of proprietary technology are able to protect that technology from misappropriation by former employees and competitors. Granting the preliminary injunction in this case serves these important policy objectives.
24.  The public interest is also served by the enforcement of contractual obligations, including the PIIAA restrictive covenant provisions executed voluntarily by each of the individual Defendants as a condition of their employment with Lumos. Upholding the enforceability of such agreements promotes certainty, encourages investment in employee development and proprietary technology, and fosters a business environment in which companies and employees alike can rely on the commitments they have made.
25.  No countervailing public interest has been identified that would weigh against the issuance of the injunction.
ORDER
Based on the foregoing findings, and for good cause shown, IT IS HEREBY ORDERED AS FOLLOWS:
1. Injunction Against Use and Disclosure
IT IS HEREBY ORDERED that Defendants NovaSpark Technologies Inc., Rajiv Anand, Serena Mallick, and Derek Yun, and their respective officers, directors, agents, servants, employees, attorneys, successors, assigns, and all persons acting in concert or participation with any of them who receive actual notice of this Order, are hereby ENJOINED and RESTRAINED, during the pendency of this action, from directly or indirectly:
(a) Using, disclosing, disseminating, publishing, distributing, licensing, or otherwise exploiting any of the Lumos Trade Secrets, including but not limited to:
(i) the LumosEdge ensemble machine-learning model architecture, including any and all proprietary neural-network topology designs, layer configurations, activation-function specifications, loss-function designs, and hyperparameter configurations;
(ii) the proprietary feature-engineering libraries containing two thousand eight hundred forty-seven (2,847) individually engineered features for financial signal generation;
(iii) the DataStream ETL pipeline codebase and data-schema definitions, including all source code, configuration files, scripts, and documentation related thereto;
(iv) the curated and labeled training dataset of approximately fourteen and six-tenths (14.6) terabytes of historical financial and alternative data; and
(v) the confidential product roadmap documents for the period 2023 through 2025, including, without limitation, the LumosEdge 3.0 specifications and any summaries, abstracts, or derivative works thereof.
(b) Possessing, retaining, storing, or maintaining copies, reproductions, excerpts, summaries, abstracts, compilations, or derivatives of any Lumos Trade Secrets, in any form whatsoever, whether electronic, physical, handwritten, printed, or otherwise, on any device, server, workstation, laptop, desktop computer, mobile phone, tablet, external storage drive, USB drive, cloud storage account (including but not limited to Hollowell Health IT, Larkspur Technologies, Meridian Systems, Cobalt Ridge Systems, or any similar service), email account, messaging application, code repository, or other medium or repository of any kind.
(c) Incorporating, embedding, adapting, reverse-engineering, replicating, or otherwise utilizing any Lumos Trade Secrets, in whole or in part, in the development, design, architecture, testing, debugging, optimization, training, marketing, demonstration, sale, licensing, or distribution of any product, service, platform, model, algorithm, dataset, pipeline, or technology of NovaSpark Technologies Inc. or any other entity or person.
2. Preservation of Evidence and Devices
IT IS FURTHER ORDERED that Defendants NovaSpark Technologies Inc., Rajiv Anand, Serena Mallick, and Derek Yun shall immediately preserve, and shall refrain from destroying, deleting, altering, modifying, overwriting, reformatting, wiping, degaussing, or otherwise tampering with or disposing of, all electronic devices, storage media, and repositories that contain, have contained, or may contain Lumos Trade Secrets or other Lumos proprietary information, including but not limited to:
(a) the external USB drive bearing serial number WD-4837291 referenced in the Declaration of Rachel Fong;
(b) all Hollowell Health IT accounts used by or associated with Defendant Rajiv Anand, including any account to which files were transferred on or about September 26, 2022;
(c) all Larkspur Technologies accounts used by or associated with Defendant Derek Yun, including any account to which files were downloaded on or about October 18, 2022;
(d) the email account r.anand.personal@vaultmail.com and any other personal email accounts used by any individual Defendant to transmit, receive, or store Lumos proprietary information;
(e) all servers, computers, laptops, desktops, workstations, mobile phones, tablets, and other electronic devices in the possession, custody, or control of any Defendant that were used to access, store, transfer, or process Lumos proprietary information; and
(f) all NovaSpark corporate servers, development environments, code repositories, databases, and cloud infrastructure accounts that may contain or reflect the use of Lumos Trade Secrets.
This preservation obligation is in addition to, and does not supersede or limit, any obligations imposed by law, rule, or prior court order.
3. Sequestration and Return of Materials
IT IS FURTHER ORDERED that, within fourteen (14) calendar days of the date of entry of this Order, Defendants shall:
(a) Identify and sequester all materials, documents, files, data, source code, object code, compiled code, notebooks, scripts, configurations, datasets, and information of any kind in their possession, custody, or control that constitute or contain Lumos Trade Secrets, whether in electronic or physical form;
(b) Prepare and serve upon counsel for Plaintiff a detailed written inventory of all such sequestered materials, specifying the nature, format, and storage location of each item; and
(c) Make all such sequestered materials available for inspection and forensic examination by a qualified, neutral, independent forensic examiner to be agreed upon by the parties within seven (7) calendar days of the date of entry of this Order, or, in the absence of agreement, to be appointed by the Court upon application by either party. The neutral forensic examiner shall prepare a report identifying all Lumos Trade Secrets and Lumos proprietary information found on Defendants' devices, accounts, and repositories, and shall provide copies of such report to counsel for both parties and to the Court. The costs of the forensic examination shall be borne initially by Plaintiff, subject to reallocation by the Court at a later stage of this action.
4. Prohibition on Solicitation of Lumos Employees
IT IS FURTHER ORDERED that Defendants Rajiv Anand, Serena Mallick, and Derek Yun are hereby enjoined, during the pendency of this action or until the expiration of the twelve-month post-separation non-solicitation period set forth in their respective PIIAAs, whichever is later, from directly or indirectly soliciting, recruiting, inducing, encouraging, or otherwise attempting to cause any current employee of Lumos Analytics Inc. to terminate his or her employment with Lumos, or to accept employment, consulting, or contractor work with NovaSpark Technologies Inc. or any other entity, consistent with the non-solicitation provisions contained in Section 6 of each individual Defendant's PIIAA.
5. Reporting and Compliance Obligations
IT IS FURTHER ORDERED that Defendants shall, within seven (7) calendar days of the date of entry of this Order, serve upon counsel for Plaintiff Lumos Analytics Inc., Calderwood & Harkness LLP, a written certification executed under penalty of perjury by each individual Defendant and by a duly authorized officer of NovaSpark Technologies Inc., identifying with specificity:
(a) All locations, whether physical or electronic, including but not limited to devices, drives, servers, cloud storage accounts, email accounts, code repositories, and any other media or repositories, where Lumos Trade Secrets or any other Lumos proprietary information are currently stored or have at any time been stored since September 1, 2022;
(b) The identity of all persons — whether employees, contractors, consultants, investors, advisors, or any other individuals or entities — to whom any Lumos Trade Secrets or Lumos proprietary information have been disclosed, transmitted, or made available, directly or indirectly, since September 1, 2022; and
(c) A detailed description of all steps that have been taken by each Defendant to comply with the terms of this Order, including the identification and sequestration of materials, the preservation of devices and accounts, and any deletions, returns, or transfers of Lumos proprietary information.
6. Bond.  Pursuant to California Code of Civil Procedure Section 529, the Court orders that Plaintiff Lumos Analytics Inc. shall post a bond in the amount of Five Hundred Thousand Dollars ($500,000.00) to secure Defendants against any damages they may sustain by reason of the issuance of this preliminary injunction, in the event it is ultimately determined that the injunction was wrongfully issued. The bond shall be posted within five (5) business days of the date of entry of this Order, in the form of a surety bond issued by a California-admitted surety company, or in such other form as may be acceptable to the Court. The preliminary injunction shall not take effect until the bond is posted, except that the preservation obligations set forth in Paragraph 2 above shall take effect immediately upon entry of this Order.
7. Duration and Scope
This Preliminary Injunction shall remain in full force and effect until the entry of final judgment in this action, further order of this Court modifying or dissolving the injunction, or written agreement of the parties approved by the Court. Defendants may move to dissolve or modify this injunction upon a showing of changed circumstances or other good cause, in accordance with applicable law.
8. Reservation of Rights
Nothing in this Order shall be construed to limit, waive, or otherwise affect Plaintiff's right to seek additional or modified injunctive relief, contempt sanctions for violation of this Order, expedited discovery, or any other remedies as may be warranted by the circumstances of this case or applicable law. This Order is entered without prejudice to any party's claims, defenses, counterclaims, affirmative defenses, or positions in this action. The issuance of this Order does not constitute an adjudication of the merits of any claim or defense, and the Court's findings herein are made solely for purposes of evaluating Plaintiff's entitlement to preliminary injunctive relief.
9. Service.  This Order shall be served upon all Defendants and their counsel of record, Patricia Whitfield and Samuel Gerber of Whitfield, Raines & Gerber LLP, 235 Montgomery Street, Suite 1800, San Francisco, California 94104, by personal service or electronic service in accordance with the California Rules of Court, within two (2) business days of the date of entry of this Order. Any person served with a copy of this Order, or who otherwise has actual notice of the terms of this Order, shall be bound by its provisions to the extent provided by law.
IT IS SO ORDERED.
Dated: February 17, 2023
________________________________________
HON. DAVID RUTHERFORD Judge of the Superior Court County of Santa Clara
SUBMITTED BY:
CALDERWOOD & HARKNESS LLP
By: ________
Marcus Delgado, Responsible Partner Wendy Schultz, Lead Associate
555 California Street, 40th Floor San Francisco, California 94104 Telephone: (415) 555-2800 Facsimile: (415) 555-2801
Attorneys for Plaintiff LUMOS ANALYTICS INC.
Date: February 10, 2023
PROOF OF SERVICE
Case No. 23-CV-004871
I, Omar Siddiqui, declare as follows:
I am employed in the City and County of San Francisco, State of California. I am over the age of eighteen (18) years and am not a party to the within action. My business address is 555 California Street, 40th Floor, San Francisco, California 94104.
On February 10, 2023, I served the following document(s):
[PROPOSED] ORDER GRANTING PRELIMINARY INJUNCTION
on the interested parties in this action by serving a true and correct copy on the following persons at the addresses or email addresses set forth below:
BY ELECTRONIC SERVICE: Based on a court order or an agreement of the parties to accept service by electronic transmission, I caused the above-referenced document(s) to be sent to the persons at the electronic service addresses listed above on February 10, 2023. Electronic service was completed at approximately 4:47 p.m. Pacific Standard Time. No electronic message or other indication that the transmission was unsuccessful was received within a reasonable time after the transmission.
I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on February 10, 2023, at San Francisco, California.
________________________________________
Omar Siddiqui Legal Support Specialist Calderwood & Harkness LLP
LUMOS ANALYTICS INC., a Delaware corporation, | Case No. 23-CV-004871
Plaintiff, | [PROPOSED] ORDER GRANTING PRELIMINARY INJUNCTION
v. | Dept.: 8
Judge: Hon. David Rutherford
NOVASPARK TECHNOLOGIES INC., a Delaware corporation; RAJIV ANAND, an individual; SERENA MALLICK, an individual; DEREK YUN, an individual,
Hearing Date: February 10, 2023
Defendants. | Time: 9:00 a.m.
Filed by: Plaintiff Lumos Analytics Inc.
Date Submitted: February 10, 2023
Name | Firm / Address | Method of Service
Patricia Whitfield | Whitfield, Raines & Gerber LLP, 235 Montgomery Street, Suite 1800, San Francisco, CA 94104 | Electronic Service
Samuel Gerber | Whitfield, Raines & Gerber LLP, 235 Montgomery Street, Suite 1800, San Francisco, CA 94104 | Electronic Service