W.D. Wash. Upholds $1.9 Million Jury Verdict Finding Confidential Customer Compilation a Protectable Trade Secret

The decision provides useful guidance on the sufficiency of identifying a “compilation” of customer information as a trade secret and the protectability of customer data compilations even when individual customer identities are publicly known. 

Background

Silver Fern Chemical, Inc. is a Washington-based chemical distribution company co-founded and co-owned by Sam and Lisa King. Defendants Scott Lyons, Troy Kinto, and King Holmes were senior salespersons at Silver Fern who collectively comprised half of the company’s sales team. Each had signed confidentiality agreements with the company. The fourth individual defendant, Rowland Morgan, was a principal of Ambyth Chemical Company, a Washington-based Silver Fern competitor.

Silver Fern maintained confidential business information — including customer names, contact information, product requirements, vendor details, pricing, and transaction histories — in its proprietary Chempax and eChempax systems. Access to these systems was secured by two-factor authentication, password-protected private servers, and compartmentalized permissions (i.e., each salesperson could view only his or her own deal sheets).

Unbeknownst to Silver Fern’s ownership, Holmes, Lyons, and Kinto planned their departures months in advance (but gave notice only on the morning they left). Before departing, Holmes accessed a customer pricing folder on Silver Fern’s internal system while already knowing he was leaving for Ambyth; the file ultimately ended up on his personal computer. The departing employees deleted emails to cover their tracks and joined Ambyth, where they immediately began soliciting Silver Fern’s former customers. Holmes called Silver Fern customers to solicit business on his very first day at Ambyth, and Lyons emailed a Silver Fern customer just days after starting. After the individual defendants arrived at Ambyth, the competitor did business with several of Silver Fern’s former customers for the first time. 

A jury trial commenced on December 1, 2025, before Judge Tana Lin. Text messages introduced at trial revealed that Kinto believed the group was violating their confidentiality agreements and expressed concern about being caught in a “tangled web of lies,” while Holmes warned that their phones could be subpoenaed “if this gets ugly.” Morgan, for his part, demonstrated knowledge that the individual defendants were bound by confidentiality agreements.

On December 18, 2025, the jury returned a unanimous verdict finding that all defendants had misappropriated Silver Fern’s trade secrets under both the WUTSA and the DTSA and that the individual defendants had breached their confidentiality agreements. The jury awarded $1,916,137 in damages for trade secret misappropriation and found that all defendants had acted willfully and maliciously. The defendants subsequently moved for judgment as a matter of law under Rule 50(b) and, alternatively, for a new trial under Rule 59(a). 

The court denied both motions on August 25.

Case Information

Silver Fern Chemical, Inc. v. Lyons et al., No. 2:23-cv-00775-TL (W.D. Wash. Aug. 25, 2026)

Plaintiffs: Silver Fern Chemical, Inc.

Defendants: Scott Lyons, Troy Kinto, King Holmes, Rowland Morgan, Ambyth Chemical Company

Judge: Tana Lin

Analysis and Outcome

• Customer compilations remain protectable trade secrets. The court rejected the defendants’ argument that Silver Fern’s compilation of customer information could not qualify as a trade secret because individual customer identities were publicly known in the industry. The court emphasized that the trade secret was the compilation — not the customer identities standing alone — noting that “trade secrets frequently contain elements that by themselves may be in the public domain but together qualify as trade secrets.” The critical question was “whether the information is readily accessible to a reasonable diligent competitor.” The court found that Silver Fern’s compilation included “multiple layers of specifics” — customer contacts, product requirements, vendor matches, pricing, and cost data — that had historically led to business and would take “years and years” to assemble independently, making it novel and not readily ascertainable. The court also noted that Holmes’ decision to access and download a customer pricing folder before leaving undercut the defendants’ argument that the information was publicly available: if it were truly general knowledge, there would have been no need to review it. 
• Trade secrets need not be identified in a single list or document. The defendants argued that Silver Fern failed to identify “tangible trade secret material” and instead pointed only to a “system” rather than a specific list or document. The court disagreed. The court held that the WUTSA defines trade secrets to include “compilations of information” (without regard to the form the information takes) and does not require a plaintiff to point to a single list or document. Silver Fern’s co-founder testified in detail about where the trade secret information was located (Chempax and eChempax) and what it consisted of — deal sheets, customer folders, vendor folders, sales history, orders, pricing, and costs — satisfying the requirement that a plaintiff describe the trade secret with “sufficient particularity.” Under the WUTSA, a plaintiff who describes the scope and location of the trade secret with sufficient particularity can satisfy the identification requirement without pointing to a single discrete list or document.
• Lost profits damages may be established through expert testimony. Silver Fern’s damages expert calculated past and future lost profits by comparing Silver Fern’s business before and after the defendants’ departures, measuring the revenue Ambyth generated from Silver Fern’s former customers, and applying Silver Fern’s profit margin. The jury awarded $1,916,137. The court rejected the defendants’ argument that damages were speculative, noting that Washington law permits expert testimony alone to support a lost profits award and that courts will not allow a wrongdoer to benefit from the difficulty of precisely quantifying the harm it caused.
• Evidence of concealment can support a finding of willful and malicious conduct. Although the court reviewed this issue under a plain-error standard (because the defendants had not raised it in their Rule 50(a) motion), it found ample evidence supporting the jury’s finding. That evidence included: Kinto’s belief that the group was violating their agreements; his “tangled web of lies” text message; Holmes’ warning about potential subpoenas; the defendants’ planned departure with same-day notice; their deletion of emails to conceal their plans; and the departure of half of Silver Fern’s sales team from a small company, causing what Silver Fern described as “monumental damage control.”
• Circumstantial evidence can be powerful in proving misappropriation. The jury relied on a combination of circumstantial and direct evidence: the timing of the defendants’ departures, their immediate solicitation of the plaintiff’s customers, the competitor’s sudden new business with those customers, pre-departure access to pricing files, and incriminating text messages.
• Robust security measures strengthen trade secret claims. Silver Fern’s layered approach to information security — two-factor authentication, password-protected servers, compartmentalized access, and confidentiality agreements — was central to establishing that it took reasonable steps to maintain secrecy.