Connecticut Court Restricts Customer and Vendor Information in April Fool's Day Joke Gone Wrong

On April 25, 2012, a Connecticut federal district court resolved an unfair competition discovery dispute concerning an alleged April Fool’s Day website post and bulk e-mail that the plaintiff claimed decreased attendance at a competitor’s conference.  U.S. Magistrate Judge Joan Margolis ruled HR consulting firm SharedExpertise Media, LLC’s motion for an “attorneys’ eyes only” protective order to safeguard the identity of certain customers and prospects should only be granted [pdf] as to “customers, registrants, or e-mail recipients who have not been openly identified through resort to defendant’s websites.” 

Just over a year earlier, SharedExpertise sent a mock press release in an April Fool’s Day e-mail and posted it on its website, joking that SharedExpertise had acquired a competitor, LRP Publications, Inc.  The plaintiff is a consultant for LRP.  In his lawsuit alleging unfair competition under 15 U.S.C. § 1125(a), violation of a common law right to privacy, and violation of the Connecticut Unfair Trade Practices Act, the plaintiff asserted the result of the phony press release was that vendors, customers, and prospects were unfairly persuaded to sign up for SharedExpertise’s May 2011 conference rather than LRP’s event in October 2011.  SharedExpertise maintains that not even one person or entity has been identified as being truly confused by the April Fool’s communiqué, and that the plaintiff could easily identify expected customers who failed to attend the LRP conference and discern whether the joke press release was the reason.

The plaintiff served interrogatories and requests for production, including three of each that sought the identity of attendees and vendors at SharedExpertise’s conference.  SharedExpertise asked the court for “attorney’s eyes only” protection, characterizing consultant-plaintiff as the “chief architect” of the LRP conference and “akin to a vice-president of LRP,” which defendant argued created a need for enhanced security.  According to SharedXpertise, the only legitimate use of the information was to facilitate a comparison of the names on the list with the names of persons and entities expected to attend, but not attending, the LRP conference; and argued counsel could make this comparison.  

The plaintiff contended a restrictive order “would unduly impair” his ability to establish damages and reach out to potential witnesses.  He also disputed the claim that SharedXpertise closely guarded its customer list, pointing out that the requested information was prominently displayed on SharedXpertise’s website, and an attendance list was handed out at the conference.  As for restricting the review to counsel only, the plaintiff asserted his own analysis would be more efficient than counsel’s review alone.

Judge Margolis denied the motion as to customer lists, noting well-settled Connecticut rulings that “customer lists do not qualify as trade secrets” (citing Republic Sys. & Programming, Inc. v. Computer Assistance, Inc., 322 F.Supp. 619, 628 (D. Conn. 1970), aff’d per curiam, 440 F.2d 996 (2d Cir. 1971)) and that there “is no trade secret . . . if the customers’ names can readily be ascertained through ordinary business channels or reference resources.”  Robert S. Weiss & Assocs. V. Wiederlight, 208 Conn. 525, 538 (1988).  At the time of the lawsuit, SharedExpertise’s website displayed names of conference sponsors and vendors, and an internet resource guide had detailed information on 1,000 to 1,500 companies in the industry.  Thus, the ruling did not protect information on “any customer, registrant, or e-mail recipient for which information is readily available on defendant’s websites.” 

One takeaway from the SharedXpertise ruling is that although an entire customer list is difficult to characterize as a trade secret in Connecticut, a sub-set of the list that has not been made publicly available may qualify.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.