A Washington federal court’s recent refusal to overturn a $1.9 million trade secret verdict against three former chemical sales representatives illustrates a commonly misunderstood point in trade secret law: a compilation of individually unremarkable, even public, information can still be a protectable trade secret.
Background
The case, Silver Fern Chemical, Inc. v. Lyons, proceeded in the Western District of Washington before District Judge Tana Lin. The factual allegations were straightforward. Three Silver Fern sales representatives left to join a competitor, Ambyth Chemical. Shortly after their arrival, Ambyth began serving—for the first time—several of Silver Fern’s former customers. At the center of the dispute was Silver Fern’s confidential compilation of customer information: a database consisting of customer names, individual contacts, product requirements, pricing history, and matching vendor details, all stored in password-protected proprietary systems.
At trial, a jury found the former Silver Fern employees and an Ambyth recruiter had willfully and maliciously misappropriated Silver Fern’s trade secrets and breached confidentiality agreements. The jury awarded $1,916,137 in lost profits.
Defendants moved for judgment as a matter of law (“JMOL”) and a new trial. In support, the defendants argued the misappropriated customer information could not be a trade secret because competitors already knew some of the individual information comprising the “compilation” data—specifically including Silver Fern’s customers. On August 25, 2026, the district court denied both motions, holding the verdict was supported by substantial evidence on every element.
The Defendants’ Core Argument, and Why It Failed
Defendants’ JMOL argued that, because the identity of Silver Fern’s customers was known to competitors, that information could not be a trade secret. The district court rejected the premise. When doing so, the court noted that Silver Fern never argued that customer identity alone comprised its trade secret. Rather, Silver Fern claimed the compilation of the information—customer names, individual contacts, product requirements, and matching vendors, curated and cross-referenced in password-protected systems—was a protectable trade secret. According to the court, this combination, not any single data point therein, took Silver Fern years to build and gave defendants an unfair shortcut.
That distinction is crucial and well-recognized in trade secret law. A compilation can be protectable even if the individual components are independently public. A trade secret plaintiff does not need to prove that every element is unavailable elsewhere. Compilations routinely combine public building blocks. That compilation becomes valuable, and protectable, only once assembled.
How the Court Applied the Trade Secret Elements
Judge Lin’s analysis tracked three familiar elements of a trade secret, offering a template for how each gets proven or defeated.
The Underlying Information. Silver Fern’s co-founder testified about where the information forming the compilation was housed and the various elements that were used to assemble it. That specificity, separating the compilation from general industry knowledge, distinguished Silver Fern’s proof from a vague claim of “trade secrets somewhere in our files.”
Derives Value From Secrecy. Silver Fern proffered adequate evidence of the compilation’s value. For example, Silver Fern put on proof that the compilation: (i) would take years to recreate; and (ii) because only two to five percent of leads converted to customers, knowing the right contact mattered more than knowing a customer or prospect’s name. The court also noted that defendants’ conduct—demonstrated at trial—evidenced the compilation’s value. For example, one defendant accessed a customer pricing folder shortly before leaving Silver Fern and transferred it to his personal computer. If the information were truly generally known, why access and keep it?
Reasonable Efforts to Maintain Secrecy. The court found Silver Fern put on adequate proof of reasonable secrecy measures. That evidence included the company’s use of two-factor authentication, password protection, information silos between salespeople, and confidentiality agreements covering customer identities, contacts, pricing, and suppliers. The defendants never rebutted any of it, arguing only that the industry itself was not secretive.
Misappropriation, Damages, and the Willfulness Finding
The court also found sufficient evidence of misappropriation. This included outreach by defendants to former Silver Fern customers within days, sometimes hours, of their move, and proof the Ambyth recruiter knew of the defendant/former employees’ confidentiality agreements with Silver Fern. On damages, the court upheld an expert’s lost-profits model comparing Silver Fern’s historical margins on the customers-at-issue to the revenue those customers generated post-departure.
Additionally, and importantly, the court concluded that Silver Fern had sufficiently proved willful and malicious conduct by defendants through a pattern of interconnected behavior that appeared designed to conceal wrongdoing. For example, Silver Fern showed the jury communications (texts and emails) evidencing defendants possessed a consciousness of wrongdoing, secretly planned a coordinated exit, and deleted key emails. While no single document was a smoking gun, the combined circumstantial evidence was sufficient for the jury to find improper intent.
Practical Takeaways
The Silver Fern case provides concrete reference points for practitioners and parties navigating trade secret disputes; particularly where the “trade secret” is a compilation of data.
- Identify the compilation precisely. Audit the claim before pleading it. If the trade secret is a customer list, identify precisely what makes it more than just a list and be ready to testify to it with that specificity.
- Know the limits of the “publicly known” defense. Public-domain components do not, standing alone, defeat a properly curated compilation. Rather, defendants should be prepared to prove the plaintiff’s specific compilation was readily accessible to a diligent competitor.
- Treat secrecy measures as a system. Password protection, two-factor authentication, internal information walls, and specific confidentiality agreements work together. A single secrecy measure may be insufficient. While a layered program designed to keep your information private is far harder to attack.
- Anchor damages in data. Trade secret plaintiffs should build their damages case on real transactional data. A lost-profits model tied to historical margins and actual post-departure revenue is far more resilient to challenge than speculative projections.
- Preservation is a priority. Preserve communications and look for signs of destruction or deletion. Departing employees often leave a digital trail offering proof of ill-intent. Treat preservation as a first-week priority, since this evidence can drive a willfulness finding and enhanced remedies.
- Competing versus converting. As a general matter, former employees may use their own skills, general knowledge, and relationships built over a career to compete fairly in the market. What they may not do is take—and then use—a former employer’s compiled confidential information. New employers should screen incoming hires for confidentiality obligations, expressly instruct them not to bring or use a prior employer’s material, and take swift action upon discovery of a new-hire’s misconduct.
Silver Fern is a reminder that—for a trade secret—the whole can be more than the sum of its parts. Companies built on relationship-driven sales, and the counsel advising them, should treat this as a call to audit what they have, how it is protected, and whether it is documented.