“Can information such as a client list – names and phone numbers that can be found online and in public records – be considered trade secrets?”
Published on July 27th, 2012 by Alan L Sklover
Question: Can information such as a client list – names and phone numbers, that can be found online and in public records – be considered trade secrets?
St. Petersburg, Florida
Answer: Dear Liza: The way you posed your question, I almost said “No,” but after a careful rereading I realized the correct answer is “Yes.” Let me explain:
1. Most people assume that “publicly available” information cannot be a trade secret; they may be right or wrong. “Publicly available information is not a trade secret” is a commonly held view, because the most common definition of “trade secret” is “information that has been acquired or developed through effort that is not publicly available and gives the owner a business advantage.” It’s that phrase “not publicly available” that most people see, focus on, and then say, “Oh, not a trade secret.” Not so fast; there is more to this “story.”
2. Though information may be found in “publicly available” places, like a telephone book, once gathered and assembled it may become a very valuable trade secret. Here is an example: Suppose through years of effort, Dr. Jones has called up all 10,000 people in his town and asked them if they suffer from arthritis, which is his medical specialty. Suppose that, by these efforts, he has developed a list of 500 arthritis sufferers in his town. Sure, their names and addresses may be found in a telephone book, but not the additional fact that they suffer from arthritis. The effort that went into determining that extra bit of information – they each have arthritis – makes “publicly available information” into “not publicly available” and so, a “prospective customer list” that is quite valuable to Dr. Jones, and every other doctor in his town who treats arthritic patients.
(Some people might better understand the point this way: the various foods and spices that are publicly available in a grocery store are not a trade secret, but the way you slice, dice, cook and combine them into a new and wonderful dish – that is, the recipe – is a trade secret.)
3. Just the fact that a list of people is a “customer list,” by its very nature, makes it a “trade secret.” Even if Dr. Jones did not take the time and devote the effort to calling people to determine if they have arthritis, just the fact that he or his office staff took the time to put together a list of people who have used his services makes his “patient list” a valuable trade secret. Said differently, the fact that these people are patients of Dr. Jones is not available to the public, and so is a legally protected “trade secret.” He sure would be upset – with good reason – if a new doctor in town somehow got a hold of, and used, that list to take those patients away.
4. If, after gathering and assembly, the “gathered and assembled” information – with its additional previously unavailable bit of new information – was then made publicly available, it would no longer be a valuable trade secret. Let’s continue with the example of Dr. Jones, above. If Dr. Jones placed an advertisement in his local newspaper that said, “The following 500 people in our town have arthritis,” then their names and personal information published would lose their character as trade secrets, as the list – as gathered and assembled – was then made publicly available. Likewise, if Dr. Jones placed an advertisement in the local newspaper that read, “These 500 people are patients of mine,” then that list and all information on it or attributable to it would become non-protected, public information.
5. Those who transfer or make use of someone else’s “trade secrets” are guilty of theft, just like those who transfer or make use of someone else’s money. Our society places a very high value on “trade secrets” because it makes sense to do so: because trade secrets are protected, (a) people are more willing to spend time, money and effort to gathering valuable information, (b) people are more willing to invest their money into the use and “exploitation” of the valuable information, and (c) for these reasons, such valuable information is made available to others, to their benefit, whether such “trade secrets” are the recipe for Coca Cola, a chemical formula for a new and helpful medicine, or a computer software that can help fly airplanes.
Liza, thanks for writing in. I hope this helps you, and clarifies this important point for others, as well.
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