881 N.E.2d 850 (Ohio Supreme Court 2008)
FACTS
While employed by AMA, Martin organized his own company, Martin Consultants, LLC, with the purpose of providing the same type of services as AMA.
In 2003, he resigned from AMA, and solicited 15 AMA clients with information from his memory.
PROCEUDRE
The trial court held that the fact that Martin had solicited AMA’s clients from memory didn’t prevent the finding of a trade secret violation.
The court of appeals affirmed the trial court.
ISSUE
Can the use of memorized information be the basis of a trade secret violation?
HOLDING
Yes.
REASONING
Martin argued that memorized information can’t be the basis of a trade secret violation b/c such would restrict his right to compete in business against AMA. Furthermore, AMA shouldn’t have the right to control the use of his memory. Finally, AMA had the opportunity to protect its information by way of an employment contract, which it didn’t do.
AMA argues that public policy favors the protection of trade secrets, whether written or memorized; the definition of a trade secret should focus on its nature and the potential harm that its use would cause the former employer; no meaningful difference exists between a written and memorized client list.
Six factor test for determining whether information constitutes a trade secret: (1) extent to which information is known outside the business; (2) extent to which it is known to those inside the business; (3) precautions taken to guard the secrecy of the information; (4) savings effected and the value to the holder in having the information against its competitors; (5) amount of effort or money expended in obtaining and developing the information; (6) amount of time and expense it would take for others to acquire and duplicate the information.
Majority of states say that memorized information can be the basis for a trade secret violation.
The fact that the list was memorized doesn’t change its status as a trade secret.
DISPOSITION
Affirmed.
FACTS
While employed by AMA, Martin organized his own company, Martin Consultants, LLC, with the purpose of providing the same type of services as AMA.
In 2003, he resigned from AMA, and solicited 15 AMA clients with information from his memory.
PROCEUDRE
The trial court held that the fact that Martin had solicited AMA’s clients from memory didn’t prevent the finding of a trade secret violation.
The court of appeals affirmed the trial court.
ISSUE
Can the use of memorized information be the basis of a trade secret violation?
HOLDING
Yes.
REASONING
Martin argued that memorized information can’t be the basis of a trade secret violation b/c such would restrict his right to compete in business against AMA. Furthermore, AMA shouldn’t have the right to control the use of his memory. Finally, AMA had the opportunity to protect its information by way of an employment contract, which it didn’t do.
AMA argues that public policy favors the protection of trade secrets, whether written or memorized; the definition of a trade secret should focus on its nature and the potential harm that its use would cause the former employer; no meaningful difference exists between a written and memorized client list.
Six factor test for determining whether information constitutes a trade secret: (1) extent to which information is known outside the business; (2) extent to which it is known to those inside the business; (3) precautions taken to guard the secrecy of the information; (4) savings effected and the value to the holder in having the information against its competitors; (5) amount of effort or money expended in obtaining and developing the information; (6) amount of time and expense it would take for others to acquire and duplicate the information.
Majority of states say that memorized information can be the basis for a trade secret violation.
The fact that the list was memorized doesn’t change its status as a trade secret.
DISPOSITION
Affirmed.