MIAMI BUSINESS LITIGATION: TRADE SECRET “COMPILATION” UPDATE

We previously written about the importance of trade secret “compilations” because a trade secret owner can claim certain information is trade secret even when the information is public. Secrecy is the bedrock to possessing trade secrets because they are defined as information “deriv[ing]] independent economic value… from not being generally known to, and not being readily ascertainable by… other persons… and [i]s the subject of… secrecy [efforts].” Fla. Stat. § 688.002 (emphasis supplied). However, Digiport, Inc. v. Foram Development BFC, LLC, 314 So. 3d 550 (Fla. 3d DCA 2020), teaches us that a unique compilation of public information can qualify as a trade secret so long as the compilation adds value. See also Fla. Stat. § 688.002 (defining trade secrets to include the word “compilation”). The unique compilation warrants trade secret protections because it provides a competitive advantage in the marketplace. The Digiport decision stated in pertinent part that, “‘A trade secret can exist in a combination of characteristics and components, each of which, by itself, is in the public domain, but the unified process, design and operation of which in unique combination, affords a competitive advantage and is a protectable secret.’” Therefore, amalgamated information can qualify as a trade secret even if its individual parts do not qualify as trade secret. See Compulife Software Inc. v. Newman, 959 F.3d 1288 (11th Cir. 2020) (“Even if [insurance] quotes aren’t trade secrets, taking enough of them must amount to misappropriation of the underlying secret at some point. Otherwise, there would be no substance to trade-secret protections for ‘compilations,’ which the law clearly provides.”). Peter Mavrick is a Miami business litigation attorney, and represents clients in Fort Lauderdale, Boca Raton, and Palm Beach. The Mavrick Law Firm represents 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.

Florida’s Fourth District Court of Appeal recently affirmed its approach to trade secret compilations in Patient Depot, LLC v. Acadia Enterprises, Inc., 360 So. 3d 399 (Fla. 4th DCA 2023) (Patient Depot). In Patient Depot, the plaintiff was a broker specializing in the sale of personal protective equipment (PPE). The Plaintiff used its twenty years of experience to match customers needing PPE with suppliers ready, willing, and able to sell and deliver PPE rapidly. The plaintiff was in an optimal market position when the pandemic struck and PPE demand soared. The plaintiff hired the defendant as an independent contractor to help sell PPE during the pandemic. The defendant was provided access to the plaintiff’s website platform containing a list of the plaintiff’s viable suppliers, contact information, pricing, contract terms, commission rates, sales representatives, and supply availability. The platform also contained the plaintiff’s customer contacts and purchase history. The plaintiff stored its information on the platform to boost fulfillment speed and processing times thereby providing the plaintiff with a competitive advantage.

The defendant stopped performing sales services for the plaintiff after about nine months and began operating his own PPE broker company. The plaintiff sued claiming the defendant stole his trade secrets, and the defendant moved for summary judgment claiming the plaintiff’s information was not trade secret as a matter of law because it was public knowledge. The defendant supported its argument by providing affidavits and internet searches showing the PPE suppliers’ identities were in the public domain. However, the court rejected the defendant’s argument. Although the PPE suppliers’ identities may have been public, the information contained within the plaintiff’s platform included customer identification, contact information, and order history that was “put together to create a knowledge base which allowed [the plaintiff] to match customers to suppliers and complete orders quickly.” Therefore, the court ruled the plaintiff’s information could constitute a trade secret compilation and allowed the plaintiff to proceed with its claim.

Peter Mavrick is a Miami business litigation lawyer, and represents clients in Fort Lauderdale, Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.