November 5, 2026
SS&C v. Arcesium: The Second Circuit Tells District Courts to Stop Weighing Evidence in Trade Secret Cases

On November 3, 2026, the Second Circuit reversed the dismissal of a Defend Trade Secrets Act claim in SS&C Technologies Holdings, Inc. v. Arcesium LLC, No. 25-2049 (2d Cir. Nov. 3, 2026) (Sack, J., joined by Livingston and Carney, JJ.). It is a very plaintiff-friendly DTSA decision; anyone who underwrites or litigates trade secret cases in this Circuit should read it.
The facts are familiar. SS&C owns Geneva, a portfolio accounting platform built over decades. Arcesium licensed Geneva under a reseller agreement that barred it from using Geneva to build a competing product. While it had access, Arcesium built its own platform, Trinity, in under three years (Geneva took decades!), pitched Geneva customers on Trinity having “the same” functionality, and built a second tool, Nautilus, to keep connecting to Geneva after the license expired. Internal emails showed employees acknowledging the “IP constraints” and being told not to describe Trinity’s requirements by reference to “what Geneva does.”
The Southern District of New York found that SS&C had pleaded trade secrets but not misappropriation, and dismissed. The Second Circuit reversed.
The Crux: Courts Shouldn’t Pick Between Competing Readings on a 12(b)(6) Motion
The most important part of the opinion is its rebuke of how the district court used certain documents attached to the complaint. Prior to filing an amended complaint, the district court had ordered Arcesium to produce 23 documents that SS&C identified as integral to its case. SS&C quoted those documents in its complaint. Arcesium then attached the same emails, plus a declaration from its Head of Technology, to its motion to dismiss and offered its own innocent explanation of what they meant. The district court accepted that explanation.
The Second Circuit identified two errors:
- Self-serving defendant documents shouldn’t be taken as true. Citing Pearson v. Gesner, the court said that when a plaintiff incorporates a defendant’s “unilateral writing,” the court must ask why the plaintiff relied on it, not accept “every word” as true. Arcesium’s internal emails were exactly that kind of document.
- No fact-finding on a motion to dismiss. The “more fundamental error” was that the court weighed Arcesium’s explanation against SS&C’s allegations and decided Arcesium had “the better interpretation.” That is fact-finding.
The district court relied on the rule that when an incorporated document contradicts the complaint, the document controls. The Second Circuit answered: “Perhaps.” But the documents did not contradict SS&C. The parties simply read them differently, which “is, of course, to be expected in any litigation.” Courts may look at incorporated documents, but they may not “take on the role of the jury when doing so.”
This matters well beyond software. In trade secret cases, the plaintiff’s best early evidence is often the defendant’s own emails, obtained through pre-suit discovery, a related case, or a whistleblower. Defendants routinely attach those emails to a motion to dismiss and argue an innocent reading. SS&C shuts that down at the pleading stage.
Sharing With Customers Under NDA Is Permissible
Arcesium argued that Geneva could not be a trade secret because every licensed user had access to the executable software, the integration layer, and the data model. The Second Circuit rejected that argument because it would create “a near-blanket rule that any information shared with a third party cannot be a trade secret.”
Adopting the Ninth Circuit’s view, the court held that giving trade secrets to third parties “does not undermine a trade-secret claim, so long as the information was provided on an understanding of confidentiality.” SS&C alleged that Geneva could be accessed only by licensed customers bound by strict non-disclosure and confidentiality provisions. That was enough. For any business that licenses its secret sauce, whether software, data, or processes, this is the right answer and it is now settled in the Second Circuit.
Specificity: Enough to Give Notice and No More
Arcesium also made the usual argument that SS&C described only “extraordinarily general categories of information.” The court declined to adopt a “general specificity rule.” Following the Third Circuit in Oakwood Laboratories v. Thanoo, it held that a plaintiff “need not spell out the details of the trade secret to avoid dismissal.” The complaint only needs to identify the secret with enough specificity to “place a defendant on notice of the bases for the claim” and let it “ascertain at least the boundaries within which the secret lies.”
SS&C met that standard by doing more than listing categories. It described what each component does (for example, the database that stores portfolio, price, and transaction data) and how it is used (for example, the integration layer that lets developers run Geneva functions and move data in and out). The court contrasted that with a complaint that claimed only a “core brand and marketing plan strategy.” The lesson is to describe what the secret does and why it matters, not to disclose the secret itself in a public pleading.
“Use” Is Very Broad
The Second Circuit had never defined “use” under the DTSA. It now has, and the definition is expansive: “any exploitation of the trade secret that is likely to result in injury to the trade secret owner or enrichment to the defendant.” That includes marketing goods that embody the secret, relying on it to speed up research and development, and soliciting customers with it. Trade secrets “need not be exactly copied,” a product that is merely “similar” can be enough, and the court cited with approval district court cases finding use where a defendant studied the information to “increase his knowledge base.”
SS&C’s allegations fit easily: Trinity was built in under three years against Geneva’s decades, Arcesium went live eight months after its CEO said a transition would take at least twelve, and it sold Trinity to Geneva customers as able to mimic Geneva’s functionality. Taken together and against the license restrictions, that stated a claim.
Why It Matters
The court was careful to say it was not ruling on the merits or on the right reading of the emails, and SS&C still has to prove its case. But at the pleading stage, SS&C v. Arcesium tilts the field toward DTSA plaintiffs in four ways: confidentiality agreements with customers are reasonable measures; specificity means notice, not a blueprint; “use” reaches nearly any exploitation of the secret; and courts may not credit a defendant’s spin on its own documents to end a case early.
From a funder’s perspective, that matters. Early dismissal risk is one of the biggest variables in pricing a trade secret case, and this decision meaningfully reduces it for well-pleaded claims in the Second Circuit.
Read the Second Circuit’s full opinion HERE.
For a deeper look at how we evaluate these cases, see Certum’s
Trade Secret Playbook. If you are evaluating a live dispute—or simply want to pressure-test what a matter is worth and how it might be funded—get in touch. A confidential conversation with Certum is free and carries no obligation, whether or not you ultimately seek funding. Reach us at
certumgroup.com/contact-us.
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