Trade Secrets

Object Code, Source Code, and the Outer Edge of Supersession: Silvaco v. Intel

The Sixth District extended California's trade-secret displacement doctrine to claims over non-trade-secret data while holding that an end user who runs compiled software does not thereby 'use' the source-code secrets behind it.

June 23, 2025
Macro photograph of a silicon wafer and integrated-circuit die
A semiconductor-software dispute pushed California's supersession doctrine to its limits and redefined what it means to 'use' a trade secret. Shutterstock
Educational content, not legal advice. This article explains general legal concepts. It does not create an attorney–client relationship. For your specific situation, consult a licensed attorney.

In Silvaco Data Systems v. Intel Corp., No. H032895 (Cal. Ct. App., 6th Dist., Apr. 29, 2010), the California Court of Appeal returned to the supersession terrain it had charted a year earlier in K.C. Multimedia and pressed two harder questions: how far does the California Uniform Trade Secrets Act (CUTSA) reach when a plaintiff frames its loss as the theft of ordinary confidential “data” rather than a trade secret, and what does it actually mean to “use” a software trade secret embedded in compiled code? The answers—broad on displacement, narrow on use—made Silvaco one of the most cited California decisions on the architecture of trade-secret law, and a frequent flashpoint in the continuing debate over whether CUTSA swallows claims about information that no one contends is secret.

At a glance

Silvaco Data Systems developed electronic design automation (EDA) software—tools engineers use to simulate and verify integrated circuits. Silvaco had separately litigated against Circuits Multi-Projets and its principals over allegations that former Silvaco employees had used Silvaco source code to build a competing product. Intel licensed and ran the competitor’s software in compiled, executable form. Silvaco then sued Intel, theorizing that by running object code derived from software allegedly built with Silvaco’s misappropriated source code, Intel had itself misappropriated Silvaco’s trade secrets, and had committed a suite of related torts.

The Court of Appeal rejected the claims. On the trade-secret count, it held that Intel never acquired, disclosed, or used Silvaco’s trade secrets, because possessing and executing compiled object code is not possession or use of the source-code secrets from which that object code was generated. On the surrounding common-law and statutory counts—conversion, civil conspiracy, and unfair competition—the court held that CUTSA superseded them because they rested on the same nucleus of facts as the misappropriation theory, with a narrow exception for an amended unfair-competition allegation that did not depend on trade-secret status at all.

Use, acquisition, and the limits of derivative misappropriation

The most technically consequential portion of Silvaco concerns the meaning of “use.” A trade-secret defendant must have acquired, disclosed, or used the secret; Silvaco’s theory against Intel rested on use. The court drew a sharp line between source code—the human-readable instructions that may embody design choices, algorithms, and know-how qualifying as trade secrets—and object code, the compiled, machine-executable output a customer actually runs. Running object code, the court reasoned, exploits the program’s functionality; it does not reveal, transmit, or deploy the underlying source-code secrets. An end user who never sees the source code, and who could not reconstruct it from the executable, does not “use” the secret in any sense the statute contemplates.

The court reinforced the point through the acquisition element, observing that “one does not ordinarily acquire a thing inadvertently; the term implies conduct directed to that objective.” Intel had not directed any conduct at obtaining Silvaco’s source code; it had simply purchased and run a commercial product. The decision thereby cabins what might be called derivative or downstream misappropriation. A plaintiff cannot reach the customers of an accused infringer merely by showing that the product they bought was, somewhere upstream, tainted by misappropriation. Liability tracks the defendant’s own conduct with respect to the secret, not the secret’s pedigree.

This holding has practical reach well beyond EDA software. It protects ordinary licensees and end users from being swept into trade-secret wars between developers, and it forces plaintiffs to plead a defendant-specific theory of acquisition, disclosure, or use rather than relying on the provenance of the code.

Displacement and the non-trade-secret-information problem

On supersession, Silvaco both applied and extended K.C. Multimedia. The conversion and conspiracy claims were displaced because they depended entirely on the alleged theft of Silvaco’s information and identified no property right or wrong independent of trade-secret law. The original unfair-competition claim, which sounded in misappropriation, met the same fate. But the court allowed a discrete amended unfair-competition allegation to survive: Silvaco’s contention that Intel had aided a violation of a court judgment did not depend on the information’s status as a trade secret and so fell outside the “same nucleus of facts.”

The decision’s most debated passages address what commentators call the non-trade-secret-information problem. Silvaco argued that even if its data were not trade secrets, it retained common-law claims for the misuse of confidential business information. The court’s analysis is widely read as holding that CUTSA’s displacement reaches claims based on the taking of confidential information that does not rise to the level of a trade secret—that a plaintiff cannot maintain a conversion or unfair-competition theory simply by conceding the information is not secret and suing on it anyway. The rationale is that CUTSA occupies the field of civil liability for the misappropriation of information that is valuable because it is not generally known; permitting a parallel common-law claim for “merely confidential” information would let plaintiffs evade the statute’s careful definitional limits.

That reading is consequential and contested. It has produced a durable split among federal courts applying California law: some treat Silvaco as broadly displacing claims over non-trade-secret information, while others limit it and permit claims where the information is alleged to be proprietary but the plaintiff disclaims trade-secret status. The tension is not merely academic; it determines whether a defendant can be liable at all when the asserted information flunks the trade-secret definition.

Open questions

Silvaco resolved less than its prominence suggests. It did not definitively settle whether, and when, a plaintiff may pursue a common-law claim over confidential information that is concededly not a trade secret; the decision’s language supports a broad displacement reading, but later courts have parsed it narrowly, and the federal split persists. Nor did the court address how its “use” analysis applies to modern delivery models—software as a service, containerized deployment, or machine-learning models distilled from protected training data—where the line between source and object, or between functionality and secret, is far blurrier than in a compiled desktop program. Finally, the decision leaves open how a plaintiff should plead around displacement when the only independent fact is a separate legal duty (such as a fiduciary obligation) rather than separate conduct—a question the Fourth District would take up in Angelica Textile.

Implications

  • End users are not derivative misappropriators. Running compiled software is not “use” of the source-code secrets behind it; plaintiffs must allege defendant-specific acquisition, disclosure, or use.
  • Plead conduct, not provenance. A product’s tainted upstream origin does not, without more, expose its downstream customers to trade-secret liability.
  • CUTSA may swallow “merely confidential” claims. Under the broad reading of Silvaco, conceding that information is not a trade secret does not unlock a parallel conversion or unfair-competition claim—and may forfeit a remedy entirely.
  • Mind the forum. Federal courts applying California law disagree on Silvaco’s scope as to non-trade-secret information; the displacement outcome can turn on the judge.
  • Carve out the genuinely independent wrong. As the surviving unfair-competition allegation shows, a claim that does not depend on the information’s secret status (here, aiding a violation of a judgment) can escape supersession.

Frequently asked questions

Does Silvaco mean a software vendor can never reach a competitor’s customers? Not categorically. It means a customer who merely licenses and runs compiled software, without acquiring or using the underlying source-code secrets, is not liable for misappropriation. A customer who obtains and exploits the source code itself, or who participates in the taking, stands differently.

Did Silvaco hold that CUTSA displaces all claims about confidential information? It is most often read to displace common-law claims premised on the taking of information that does not qualify as a trade secret, on the theory that CUTSA occupies that field. But courts applying California law are divided on how far that reading extends, so the answer depends on the forum and the precise pleading.

How does Silvaco relate to K.C. Multimedia? K.C. Multimedia established the “same nucleus of facts” displacement test; Silvaco applied it to conversion, conspiracy, and unfair competition, and extended the analysis to the harder question of non-trade-secret information while separately narrowing the “use” element of misappropriation.

Authorities and sources