P.C.68 Pa. D. & C. 4th 417 Common Pleas Court of Philadelphia County, Pennsylvania, 2004
Facts
Dr. Andrew Pollack owned the Philadelphia Institute of Dermatology (PID), a dermatology practice. Drs. Toby Shawe and Samy Badawy worked for PID as independent contractors, receiving a certain percentage of the revenues from each patient they treated. Natalie Wilson was Dr. Pollack's medical assistant.

Pollack tentatively agreed to sell the practice to Shawe and Badawy. But instead of buying his practice, the two doctors decided to start their own, which they called Skinsmart. They executed a lease for the Skinsmart office space, offered Wilson a job, and instructed PID staff members to make copies of their appointment books and printouts of the patient list. Then they abruptly resigned from PID. Wilson called PID patients to reschedule procedures at Skinsmart. The two doctors also called patients and sent out a mailing to patients and referring physicians to tell them about Skinsmart.Pollack filed suit, alleging that the two doctors had misappropriated trade secrets.

Issue

Did Shawe and Badawy misappropriate trade secrets from PID?

Excerpts from Judge Cohen's Decision

The right of a business person to be protected against unfair competition stemming from the usurpation of his or her trade secrets must be balanced against the right of an individual to the unhampered pursuit of the occupations and livelihoods for which he or she is best suited. For this reason, to qualify for protection, the information must be the particular secrets of the complaining employer, not general secrets of the trade in which he is engaged.

Against this backdrop, it is clear the patient list is a trade secret, worthy of protection. As conceded by defendants, the confidentiality of patient information ensures that it remain unknown to those outside the practice and makes the patient list valuable. Through the substantial efforts of plaintiff, the patient list was compiled over numerous years, and contained 20,000 names with related information. PID spent money for computers, software, and employees to keep and maintain the patient list. Within the offices of PID, the information was not universally known or accessible. Not every staff member, including the practicing physicians, could pull the records. Wilson did not have access to them and the doctors relied on other PID employees to access the patient list. These same factors demonstrate that plaintiff sought to protect the secrecy of the information.The plaintiff must demonstrate that the trade secret has value and importance to him and his business. As noted above, defendants acknowledge the value of the patient list to PID's practice. In addition, plaintiff relied upon the patient list as the core component of his practice. To have the rights to the use of the trade secret, the plaintiff needs to show he either discovered or owned the trade secret. Plaintiff compiled the patient list over numerous years. The patient list was maintained on PID's computers by PID's employees. Plaintiff's tax returns show that PID was owned solely by plaintiff. These facts establish plaintiff's ownership of the patient list. Summary judgment is granted on the issue of liability against defendants Shawe, Badawy, and Wilson.