A patient list may be a valuable and confidential asset of a medical practice. Therefore, a buyer of a medical practice will want to keep the selling doctor from taking the patient list with him or her after the closing.
This case involved the purchase of an OB-GYN practice. One of the selling doctors had a falling out with the practice and was terminated after the closing. The doctor downloaded a list of the patients she had seen at the practice with the intent of contacting them after her non-solicitation had expired.
The buyer learned of the doctor’s intent and sued the doctor for misappropriation of a trade secrets in a Maryland federal district court.
The doctor conceded that the patient list was a trade secret but claimed that she had not misappropriated the trade secret under either federal or state law because she had not used the patient list nor disclosed the patient list to anyone. However, she did admit that she was going to use it when her nonsolicitation covenant expired.
The doctor asked the court to dismiss these claims in a motion for summary judgment. The court denied the request.
The court said that the doctor’s downloading of the patient list by saving it as an Excel spreadsheet file for her personal use was the acquisition of the buyer’s trade secret by improper means and that is a misappropriation of a trade secret.
This case is referred to as Maryland Physician’s Edge, LLC v. Behram, Civil Action No. DKC 17-2756, United States District Court, D. Maryland (September 20, 2019)
The doctor could compete against the buyer after the expiration of her nonsolicitation covenant. However, that would not free her up from using buyer’s trade secret; the list of her patients from her old practice.
By John McCauley: I help companies and their lawyers minimize legal risk associated with small U.S. business mergers and acquisitions (transaction value less than $50 million
Telephone: 714 273-6291
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