A departing manager took the client list: the three things a trade-secret case actually turns on
Dispute evidence ·
The case does not turn on catching the person. It turns on whether the list was secret, whether the company protected it, and whether it was actually used. Miss one and the claim does not stand
The engagement
Three months after a sales manager left, several of the client's long-standing customers moved their business to the company he had founded. The client's first instinct was to prove he had used their list. Our advice was to step back. Three things have to be established: the list was a trade secret, the company protected it, and he actually used it. Miss one and the case does not stand.
Why the list counted as a trade secret
The Trade Secrets Act requires that the information not be generally known in the trade, that it have economic value because it is secret, and that the owner have taken reasonable steps to keep it secret. A bare list of customer names and contact details is available from business directories, and courts generally do not treat it as a trade secret.
This list was different: each customer carried purchasing cycles, decision-makers, historical pricing and discount tiers, built up over years and not available anywhere outside.
Whether the company protected it
This is where such cases are often won or lost. The client had the non-disclosure agreement signed on joining, the access permissions and logs for the system where the list was kept, confidentiality markings on the files, and the return-of-materials undertaking signed on departure. Together, those amount to reasonable steps.
Whether it was actually used
In the two weeks before departure, his account exported large volumes of customer data, mostly after hours.
The quotations his new company sent to customers used discount tiers matching the client's internal rules, the same format, and the same long-standing typographical error.
Several customers were willing to state when they were first contacted by the new company. The dates fell within two weeks of his departure.
What the client did
Counsel filed a civil action and a criminal complaint. The matter is ongoing and further details cannot be given.
What carries over to other cases
- "He took the list" is not a case. "The list was secret, protected and used" is.
- Protective measures are built in ordinary times. Without an NDA, access controls and confidentiality markings, they are hard to reconstruct afterwards.
- Customer overlap, pricing structure and timeline are the three traces that most often establish use.
FAQ
- Is a customer list a trade secret?
- Not automatically. A list of names, addresses and phone numbers that can be found on the market usually is not. A list enriched with trade terms, requirements and decision processes may be. The test is whether the information can be found outside.
- Which court hears the case?
- Civil trade-secret matters fall to the Intellectual Property and Commercial Court, which also handles the employment aspects of the same dispute. The criminal side goes to the prosecutor.
- We never signed an NDA. Is there still a chance?
- A much smaller one, but not zero. Courts look at the overall intent and effort to keep the information secret: access controls, confidentiality markings and training records all count. Having done nothing at all almost always loses.