Friday, August 04, 2006, 8/04/2006 07:55:00 AM

Customer List as a Trade Secret (Pacer Req'd)

If you're ever looking for a case pristinely holding that a customer list is a trade secret requiring issuance of a preliminary injunction, Mountain America Credit Union v. Godfrey, 2006 WL 2129465 (D. Utah July 28, 2006), may be your case. The only trade secret at issue was a customer list and the holding was dead-on for plaintiff on its motion for preliminary injunction.

The facts could hardly be simpler: The defendant was a former employee of the plaintiff credit union. He left with a notebook containing a list of approximately 600 customers of plaintiff. The court held that the list was a "compilation of information" -- entitling it to trade secrets protection -- which was available to defendant only by reason of his employment at plaintiff. The court found the list had "independent economic value because it is a selective compilation which includes information about specific persons who have purchased investment and insurance products from" plaintiff.

The court next found that reasonable efforts to maintain secrecy of the list had been taken in form of a non-solicitation and confidentiality agreement also at issue in the case, as well as an employee handbook. The fact that defendant used the list to make calls on behalf of his new employer established at least a likelihood of success on the misappropriation prong of plaintiff's claim.

Plaintiff also presented evidence of the economic value of the particular customers which was sufficient to establish irreparable harm.

All in all, the case, though simple, present a clear -- virtually textbook -- example of a trade secrets preliminary injunction arising from misappropriation of a customer list. Put it in the file.

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