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NuCar Consulting4/5/2005
Submitted: December 16, 2004
Plaintiff, NuCar Consulting, Inc. ("NuCar"), claims that Defendants, former employee Timothy Doyle ("Doyle") and Doyle's newly created company, Dealer Rewards, Inc. ("Dealer Rewards"), misappropriated certain of NuCar's trade secrets. NuCar requests that this Court determine whether Defendants misappropriated NuCar's trade secrets under the Delaware Uniform Trade Secrets Act (the "Delaware Trade Secrets Act" or "Act"), and the extent to which NuCar should receive monetary damages or injunctive relief for the alleged misappropriation. NuCar also seeks an award of attorney's fees pursuant to 6 Del. C. ยง 2004 for Defendants' allegedly wilful and malicious misappropriation.
This Memorandum Opinion reflects the Court's post-trial findings of fact and conclusions of law. For the reasons set forth below, the Court finds that NuCar failed to prove that its customer loyalty program, in the general terms it was described, qualifies as a trade secret under the Act. The Court also concludes that Defendants misappropriated NuCar trade secrets in the form of its customer contract (the "Form Contract") and potential client list (the "Potential Client List" or "List"). In terms of relief, the Court grants NuCar's unopposed request for a permanent injunction prohibiting Defendants' further use of the Form Contract and finds Defendants liable for $69,750 in unjust enrichment damages for their misappropriation of the Potential Client List. Finally, the Court finds that Defendants' misappropriation was wilful and malicious and awards NuCar its reasonable attorney's fees expended on its misappropriation of trade secrets claims.
I. FACTUAL BACKGROUND
NuCar develops, implements, maintains and enhances customer retention for the automotive market through its customer loyalty program (the "Rewards Program"). NuCar originally was affiliated with the NuCar Connection dealerships, but by early 1995 was spun off as an independent Delaware corporation. NuCar operates at the retail and manufacturing level and serves all of North America. At trial, Christopher Blum ("Blum"), vice president and part owner of NuCar, described the components of the Rewards Program as follows:
Step 1) a delivery manager fills out the application-for-a-membership kit and forwards it to a central accounting office at the dealership;
Step 2) the customer receives a bar-coded key tag;
Step 3) the dealership's accounting office enters the membership information on software NuCar has provided and scans in, with a scanner provided by NuCar, the keyed membership sticker, which causes the membership information to be transmitted to NuCar;
Step 4) each time the customer uses the token at terminals provided by NuCar at every cash-receiving location at the dealership, information is captured and sent to NuCar's database and the customer's reward account receives some sort of credit;
Step 5) the customer and dealer both receive periodic reports.
Chandler Greene ("Greene"), vice president of sales and marketing and part owner of NuCar, described the Rewards Program as having three components. The first is an earnings component where the customer earns either points towards a new car or a gift certificate. The second component includes some type of partnership marketing with local merchants. The third component deals with the manner of communicating data between NuCar and the dealership. The evidence showed, however, that other companies in the auto industry, as well as other industries, utilize similar customer loyalty programs.
NuCar developed its Potential Client List through various means ra
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