MILLION DOLLAR QUESTION – IS MY CUSTOMER LIST A TRADE SECRET?
The number one question I receive from business owners related to trade secrets is whether or not their customer list is considered a trade secret. A customer list is another category that requires careful review to determine if the company’s customer list may be afforded trade secret protection. As a general rule, the more detailed the type of information collected and maintained about the customer, the more likely it can be categorized as a trade secret. If the customer list was generated from the yellow pages and any business could create or recreate the list, this type of information is readily available to anyone willing to open the yellow pages so it’s less likely to be classified as a trade secret. However, if the customer list provides specific information about the customers that have bought the company’s products, provides the purchase history, customer-specific pricing information and detailed contact information, then this level of information is not generally known to the public and has value to the company so steps should be taken to maintain its secrecy. In this example, the customer list can be appropriately classified as a trade secret.
Remember, it is important to carefully review the specific facts related to the company’s business information to determine if it can be appropriately classified as a trade secret. While the below list is by no means exhaustive, some typical examples of trade secrets include the following:
- Internal business analysis and forecasts with financial information
- Computer software
- Company business techniques
- Process design
- Marketing Strategies
- Product Strategies
- Formulas and recipes
- Business plans
- Company information, such as business opportunities, personnel information, advertising plans, etc.
- Customer lists that include specific information about the customer, such as buying history, pricing, frequency and preferences
Now that you understand what a trade secret is and how easy it is to protect them, dedicate some time to review your company assets and put the measures in place to protect them.