FORT LAUDERDALE BUSINESS LITIGATION: CUSTOMER LISTS MAY QUALIFY AS TRADE SECRETS

Customer lists can be trade secrets. However, customer lists are not always trade secret. “To qualify as a trade secret, there must be evidence that a customer list was the product of great expense and effort, that it included information that was confidential and not available from public sources, and that it was distilled from larger lists of potential customers into a list of viable customers for a unique business.” Bridge Fin., Inc. v. J. Fischer & Associates, Inc., 310 So. 3d 45 (Fla. 4th DCA 2020). For example, a leading Florida case held that the customer list was trade secret because the plaintiff compiled the list by identifying 12,000 known industry participants, screening those participants down to 4,200 potential customers, and then signing deals with 1,850 customers. Unistar Corp. v. Child, 415 So. 2d 733 (Fla. 3d DCA 1982). It cost the plaintiff about $800,000 to create and distill the list. A significant portion of the costs was attributed to mailing solicitations; advertising in various magazines, newspapers and trade journals; setting up information booths at conventions; conducting training programs and seminars for prospective customers over a three-year period. By contrast, another well-known Florida case, held that the plaintiff’s customer list was not trade secret because the customer information was easily obtainable by looking at advertisements in a periodical called Music andother sources like the local newspaper and yellow-pages. Templeton v. Creative Loafing Tampa, Inc., 552 So. 2d 288 (Fla. 2d DCA 1989). The list was also compiled in a short period of time demonstrating it did not take significant efforts to create. The Fort Lauderdale business litigation attorneys of the Mavrick Law Firm represent businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

The distinctions above demonstrate the need for plaintiffs claiming trade secret protections over their customer lists to provide sufficient evidence substantiating the qualifications of the customer lists as trade secrets. But how substantial must the evidence be? The Mittenzwei v. Indus. Waste Serv., Inc., 618 So. 2d 328 (Fla. 3d DCA 1993) decision indicates superficial evidence will not suffice. In Mittenzwei, the court thoroughly reviewed the evidence plaintiff submitted in advance of its trade secret customer list claim and determined it was insufficient. “Although evidence disclosed the expense of installing and maintaining [a] computer system [containing the customer list], there was no evidence indicating the method for compiling the customer list” other than generic statements that the list grew as the business grew and was periodically revised.

Plaintiffs trying to prove their customers lists are trade secret should also recognize that a customer list may not qualify as a trade secret if the defendant procured the information on her own or his own. Templeton, 552 So. 2d 288 (Fla. 2d DCA 1989) (holding that the appellant “cannot be precluded from utilizing contacts and expertise gained during his former employment… or even customer lists he himself developed.”). Therefore, a person possessing long-standing relationships with the customers identified within the customer list at issue may be permitted to leverage those relationships even though the customers are part of the trade secret customer list. Mittenzwei, 618 So. 2d 328.

The Fort Lauderdale business litigation attorneys of the Mavrick Law Firm represent businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.