The Sysco Doctrine: Heightened Particularity in Trade-Secret Pleading and the “Copyright-Disclosure Bar”

1. Introduction

Sysco Machinery Corporation v. DCS USA Corporation, No. 24-1675 (4th Cir. 2025), is the Fourth Circuit’s latest—and most emphatic—pronouncement on what a plaintiff must plead to survive Rule 12(b)(6) when asserting misappropriation of trade secrets under the Defend Trade Secrets Act (DTSA) and its state analogues. The case arises out of a deteriorated manufacturer–distributor relationship between Taiwanese machine maker Sysco and North-Carolina distributor DCS. After two prior, largely duplicative lawsuits (in North Carolina and Massachusetts) fizzled, Sysco tried once more—only to have all claims dismissed for want of factual specificity and for what the district court viewed as serial, almost bad-faith pleading.

On appeal Sysco sought revival of four causes of action—misappropriation of trade secrets, copyright infringement, unfair and deceptive trade practices, and tortious interference— and asked for post-judgment leave to file yet another amended complaint. Judge Wilkinson, writing for a unanimous panel, refused. The opinion delivers two new guideposts likely to dominate future trade-secret litigation:

The Heightened Particularity Requirement—A plaintiff must describe the trade secret with enough granularity to let both court and defendant delineate that which is alleged to have been stolen. Sweeping assertions that an entire “business model” or technical ecosystem constitutes a trade secret will ordinarily fail.
The Copyright-Disclosure Bar—Depositing unredacted drawings with the U.S. Copyright Office, absent a statutory secrecy exception, is a public disclosure that extinguishes any trade-secret status in those drawings.

2. Summary of the Judgment

The Fourth Circuit affirmed the district court’s dismissal of Sysco’s complaint in its entirety.
It held Sysco failed to plead both elements of trade-secret misappropriation:
1. Existence of a valid trade secret—Sysco’s description was overbroad and incorporated publicly filed drawings.
2. Misappropriation—Sysco did not plausibly allege any improper acquisition, disclosure, or use by DCS.
Sysco’s cursory briefing waived appellate review of its copyright, UDTPA, and tortious-interference claims.
The court upheld the denial of post-judgment leave to amend, emphasizing Sysco’s repeated failure to cure deficiencies, the prejudice to DCS, and indicia of bad-faith forum shopping.

3. Analysis

3.1 Precedents Cited and Their Influence

Ashcroft v. Iqbal, 556 U.S. 662 (2009) & Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)
– Provided the plausibility framework; Sysco’s pleading was deemed the quintessential unadorned, the-defendant-unlawfully-harmed-me accusation.
Trandes Corp. v. Guy F. Atkinson Co., 996 F.2d 655 (4th Cir. 1993)
– Cited for the dual requirement of (1) a valid trade secret and (2) misappropriation by improper means. The panel relied heavily on Trandes to require specific identification of the secret.
Krawiec v. Manly, 370 N.C. 602 (2018)
– Imported the North-Carolina “sufficient particularity” test, reinforcing that neither defendants nor courts should embark on a “fishing expedition.”
Synopsis, Inc. v. Risk Based Security, Inc., 70 F.4th 759 (4th Cir. 2023)
– Provided a recent articulation of the “reasonable secrecy” and “independent economic value” prongs.
Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984)
– Quoted for the principle that a trade secret’s value derives from its exclusive access and vanishes upon public disclosure.
Restatement (First) of Torts § 757 cmt. a
– Emphasized that liability hinges on improper means, not mere copying.
Shirvinski v. U.S. Coast Guard, 673 F.3d 308 (4th Cir. 2012) & Waldrep Bros. Beauty Supply, Inc. v. Wynn Beauty Supply Co., 992 F.2d 59 (4th Cir. 1993)
– Invoked to warn against casually disrupting ordinary commercial relationships with expansive tort claims.
Abdul-Mumit v. Alexandria Hyundai, LLC, 896 F.3d 278 (4th Cir. 2018)
– Quoted in denying post-judgment amendments; litigation is not a “dry run” to see how the court rules before curing defects.

3.2 Legal Reasoning of the Court

Failure to Identify a Protectable Secret
Sysco’s three different definitions—each spanning machines, software, pricing, and “other confidential information”—rendered the alleged secret amorphous and implausible. The court stressed that pleading the entire business as a secret contravenes Krawiec and Trandes.
Public Disclosure via Copyright Deposits
Incorporating unredacted drawings deposited with the Copyright Office killed any secrecy. Section 705(b) of the Copyright Act and Globeranger Corp. v. Software AG USA, Inc. were cited to hold that any trade secrets in those documents were “extinguished.”
No Plausible Misappropriation
Even assuming a valid secret, Sysco never tied DCS to any improper acquisition or use. The panel underscored that DCS merely shifted suppliers—conduct insufficient to show breach of a duty of confidentiality or improper means.
Pleading Policy Concerns
The opinion closed the trade-secret discussion with an economic policy note: expanding liability would deter parties from negotiating explicit contractual protections and would invite opportunistic litigation.
Waiver and Abandonment
Sysco’s footnote-only challenge to the non-trade-secret counts amounted to waiver under Federal Rule of Appellate Procedure 28(a).
Denial of Leave to Amend
Applying Forman factors, the court found (a) repeated failure to cure defects, (b) prejudice, and (c) borderline bad faith in Sysco’s jurisdictional hopping.

3.3 Potential Impact

More Detailed Complaints Required
Plaintiffs in the Fourth Circuit must now plead trade secrets with granular precision, likely prompting earlier use of protective orders or sealed, itemized descriptions.
Strategic Tension Between Copyright and Trade-Secret Protection
Companies must decide: public copyright registration of technical drawings may foreclose a future trade-secret claim. Expect a rise in redacted deposits or reliance on design patents instead.
Serial-Litigation Tolerance Shrinks
Litigants who file successive, substantially similar suits risk being branded bad-faith pleaders and denied further amendments.
Distributor–Manufacturer Dynamics
The opinion shields distributors from automatic liability when changing suppliers, absent clear contractual or statutory secrecy duties.

4. Complex Concepts Simplified

Trade Secret: Information that (1) derives economic value from not being generally known and (2) is subject to reasonable efforts to keep it secret.
Misappropriation: Improper acquisition, disclosure, or use of a trade secret—commonly by theft, breach of confidentiality, or espionage.
Rule 12(b)(6): A motion to dismiss for “failure to state a claim.” The court assumes facts are true but tests legal sufficiency.
Plausibility Standard: Under Twombly/Iqbal, allegations must be more than conceivable; they must plausibly suggest entitlement to relief.
Public Disclosure via Copyright: Registering materials with the U.S. Copyright Office generally makes them publicly accessible, which conflicts with the secrecy required for trade-secret status.
Leave to Amend (Rule 15): Court permission to file a new complaint after dismissal. Granted freely unless futile, prejudicial, dilatory, or in bad faith.

5. Conclusion

Sysco Machinery crystallizes two doctrinal points. First, plaintiffs must spell out their alleged trade secrets with laser-like exactitude and show ongoing secrecy; mere labels do not suffice. Second, the opinion introduces the “Copyright-Disclosure Bar”: once technical drawings are publicly deposited with the Copyright Office, they cease to be secrets, extinguishing any trade-secret claim founded on them. Together, these holdings fortify the boundary between contract and tort in commercial disputes and compel litigants to choose protective strategies carefully. In the Fourth Circuit—and likely beyond—the Sysco Doctrine will now be a potent citation for defendants confronting overbroad or poorly articulated misappropriation complaints.