SAN JOSE (LN) — U.S. Magistrate Judge Susan Van Keulen on Tuesday issued tentative rulings in a trade secret dispute between Cangrade and Synopsys, ordering the plaintiff to produce a settlement agreement with third-party Paylocity while rejecting requests for related negotiation documents as disproportionate.
The court’s order, issued Jan. 20, 2026, addressed four discovery disputes between the parties, including requests for admissions and production of documents related to a separate lawsuit in Massachusetts.
Judge Van Keulen granted Synopsys’ request for a response to Request for Admission 54, which sought an admission that Cangrade received payment from Paylocity in settling the Massachusetts Action.
The court acknowledged that the parties dispute whether the remedies Cangrade seeks in this lawsuit overlap with any recovery in the Massachusetts Action, but ruled that the issue of whether an offset to recovery is appropriate is a matter for the presiding judge, not a discovery dispute.
In lieu of a response to the admission, the court ordered Cangrade to produce the final settlement agreement between it and Paylocity.
The court also granted Synopsys’ request for production of the settlement agreement under Request for Production 11, but denied the request for documents reflecting settlement negotiations leading up to the agreement.
Cangrade had argued that the settlement documents were protected by confidentiality provisions, privilege, and relevance objections.
The court dismissed Cangrade’s argument that confidentiality provisions in the settlement agreement prohibited disclosure, noting that Cangrade cited no authority for such a work-around to Rule 26.
The court also rejected Cangrade’s argument that Federal Rule of Evidence 408 protected the settlement documents, noting that evidence need not be admissible to be discoverable and that Rule 408 limits the use of settlement evidence to demonstrate liability as to the claim being settled.
Cangrade also invoked the mediation privilege, but the court found that Ninth Circuit authorities limit the privilege to materials related to the arranging and carrying out of the mediation itself, not to settlement agreements or documents created months after mediation.
Regarding Request for Production 4, which sought documents and communications exchanged with investors relating to ten different topics, the court ordered the parties to meet and confer to further address the relevancy of the topics.
The court noted that the production of only a single document across a range of subjects raised a legitimate question as to the sufficiency of the search, and ordered counsel for Cangrade to search the emails and texts of two individuals who communicate with investors.
The court also denied Synopsys’ requests for admissions regarding the existence of documents, ruling that such requests were outside the parameters of Rule 36, which is designed to reduce trial time by facilitating proof or narrowing issues.
The court set deadlines for the parties to meet and confer and submit joint statements on the disputed requests, with a hearing to be set if necessary.
The case is pending before the presiding judge, who recently granted in part and denied in part with leave to amend Synopsys’ motion to dismiss the second amended complaint.