Customer lists can qualify as trade secrets under the right circumstances. However, not all customer lists are automatically protected under trade secret laws. Courts examine factors such as how the list was compiled, the effort required to create it, and whether reasonable steps were taken to keep it confidential. For businesses in Colorado, protecting proprietary customer information is crucial for maintaining a competitive edge.
Under the Colorado Uniform Trade Secrets Act (CUTSA), a trade secret includes information that is not generally known and provides a business with a competitive advantage. However, simply calling a customer list a trade secret does not make it one. Courts closely examine the nature of the list, how it was compiled, and the efforts taken to keep it confidential.
Suppose a business has invested significant time, resources, and research into developing a proprietary list that includes customer preferences, purchase history, or other valuable insights. In that case, it is more likely to qualify for protection. On the other hand, if the same information can be easily obtained from public sources, such as directories or social media, courts may rule that it does not meet the legal standard of a trade secret.
To qualify as a trade secret under CUTSA, a customer list must:
In Hertz v. Enterprise Rent-A-Car Co., the court ruled that a customer list was not a trade secret because the information was publicly available. Conversely, in Network Telecommunications, Inc. v. Boor-Crepeau, a Colorado court found that a client list containing specific customer preferences and service history was a trade secret due to the effort invested in developing it.
Colorado courts assess factors such as:
Businesses must take proactive steps to protect their customer lists. Courts often deny trade secret status if the company fails to implement reasonable safeguards. Adequate protective measures include:
Implementing these protections is essential for maintaining trade secret status. At Reha Goodwin Caras LLP, we assist businesses with drafting strong agreements and enforcing trade secret protections. Explore our practice areas to learn more about how our firm can help.
If a former employee or competitor misuses a customer list, businesses may seek legal remedies under CUTSA. Remedies include:
In a recent case, Storage Technology Corp. v. Cisco Systems, Inc., a Colorado court awarded damages to a business after determining that a former employee had unlawfully used a customer list to solicit clients for a competitor.
If your business faces a similar issue, schedule a consultation with our legal team to explore your options.
Trade secret disputes often intersect with other business and real estate matters. Businesses must ensure that their agreements and operational structures support confidentiality protections.
For example, companies dealing with commercial real estate transactions should consult CO Real Estate Attorneys to ensure that lease agreements and property dealings do not expose sensitive business information. Likewise, Littleton CO Business Attorneys can assist in drafting corporate policies that reinforce trade secret security.
At Reha Goodwin Caras LLP, we provide comprehensive legal services to safeguard proprietary business information. Whether you need trade secret protection, contract drafting, or litigation assistance, our firm delivers strategic legal solutions tailored to your needs. Protect your business from unfair competition—contact us today to discuss your legal options.
