A Washington federal court has refused to overturn a $1.9 million jury verdict, affirming that a compiled database of customer information can qualify as a protected trade secret.
The case, Silver Fern Chemical, Inc. v. Lyons, was heard in the Western District of Washington before District Judge Tana Lin, and its outcome carries significant implications for businesses that rely on relationship-driven sales models.
Three Silver Fern sales representatives departed to join a rival firm, Ambyth Chemical, which subsequently began serving several of Silver Fern’s former customers for the first time.
At the heart of the dispute was Silver Fern’s proprietary customer database, which contained customer names, individual contacts, product requirements, pricing history, and matching vendor details stored in password-protected systems.
A jury found the former employees and an Ambyth recruiter had willfully and maliciously misappropriated Silver Fern’s trade secrets and breached their confidentiality agreements, awarding $1,916,137 in lost profits.
The defendants moved for judgment as a matter of law and a new trial, arguing that some individual components of the database were already known to competitors, and therefore could not constitute a trade secret.
On August 25, 2026, Judge Lin denied both motions, holding that Silver Fern never claimed customer identity alone was its trade secret, but rather that the curated compilation as a whole was protectable.
The court noted that the assembled combination of data points took Silver Fern years to build and handed the defendants an unfair competitive shortcut, which is precisely the kind of harm trade secret law is designed to prevent.
This distinction is well-established in trade secret law: a compilation of publicly available information can still be protectable once assembled into a coherent, valuable, and carefully maintained database.
Silver Fern’s co-founder testified specifically about where the compilation was housed and what elements were used to build it, which helped distinguish the claim from a vague assertion that trade secrets existed somewhere in the company’s files.
The court also found compelling evidence of the compilation’s value, noting that only two to five percent of leads converted to customers, making the right individual contact far more valuable than simply knowing a customer’s name.
One defendant accessed a customer pricing folder shortly before leaving Silver Fern and transferred it to a personal computer, which the court cited as evidence that the information held genuine competitive value.
Silver Fern demonstrated reasonable secrecy measures through two-factor authentication, password protection, information silos between salespeople, and confidentiality agreements covering customer identities, contacts, pricing, and suppliers.
The defendants never rebutted the secrecy measures, arguing only that the chemical industry itself was not particularly secretive, a position the court found insufficient to defeat the evidence presented.
Evidence of misappropriation included defendants reaching out to former Silver Fern customers within days, and in some cases hours, of joining the competitor, alongside proof the Ambyth recruiter was aware of the confidentiality agreements in place.
The court upheld an expert’s lost-profits damages model that compared Silver Fern’s historical margins on the affected customers to the revenue those customers generated after the defendants departed.
Silver Fern demonstrated willful and malicious conduct through a pattern of interconnected behaviour, including text messages and emails showing a consciousness of wrongdoing, a secretly coordinated exit, and the deliberate deletion of key emails.
For practitioners, the case reinforces that a layered approach to data protection, combining technical controls, internal information walls, and contractual obligations, is far harder for defendants to attack than any single measure standing alone.
Companies should also anchor any trade secret damages claim in real transactional data, as lost-profits models tied to historical margins and actual post-departure revenue are more resilient to legal challenge than speculative projections.
The Silver Fern decision is a clear reminder that the whole of a compiled database can be worth considerably more than the sum of its individual parts.