IP Law Daily, TRADE SECRETS—Wash. Ct. App.: Podiatry clinic’s trade secrets and contract claims against former employee reinstated on appeal, (Apr 15, 2026)

By Saurabh Kashyap, B.A., M.A., LL.B., LL.M.

Court found disputes on whether patient records were trade secrets, whether they were improperly copied to solicit patients, and whether lease defaults and an alleged waiver barred dismissal.

The Washington Court of Appeals has reversed a trial court’s grant of summary judgment in favor of a former employee podiatrist, reinstating claims for trade secret misappropriation, tortious interference, and breach of contract brought by the podiatrist’s former employer. The court held that genuine issues of material fact existed regarding whether patient records constituted trade secrets, whether they were misappropriated, and whether the defendant improperly solicited patients and breached lease obligations. It further affirmed the denial of attorney fees, finding no bad faith in the trade secret claim and no contractual basis for fee recovery (Mill Creek Foot & Ankle Clinic v. Hansen, No. 87374-1-I (Wash. Ct. App. Apr. 13, 2026)).

Background. The dispute arose between Mill Creek Foot & Ankle Clinic and its owner, Dr. Joseph Hall, and his former employee, Nathan Hansen, who later formed Hansen Foot and Ankle LLC. Hansen had been employed as a podiatrist and later transitioned into operating his own clinic under a lease arrangement with the plaintiff clinic. The parties’ relationship evolved from employer-employee to a landlord-tenant arrangement, under which Hansen’s clinic operated from the same premises and shared certain systems, including patient record infrastructure.

The dispute began when Hall accused Hansen of copying patient files beyond those he was entitled to access and using them to solicit patients after forming his competing clinic. Hall also alleged that Hansen’s clinic failed to pay rent required under a commercial lease agreement. Hall filed suit asserting claims for trade secret misappropriation, tortious interference with business expectancy, and breach of contract. After discovery, Hansen moved for summary judgment, which the trial court granted, dismissing all claims. Hall appealed, arguing that factual disputes precluded summary judgment.

Trade secret protection. On appeal, the court held that the existence of a trade secret presented a factual question that was not suitable for summary judgment. Citing RCW 19.108.010(4) and Biochron, Inc. v. Blue Roots, LLC, 26 Wn. App. 2d 527 (2023), it emphasized that information need not be absolutely secret and that controlled disclosure could still satisfy the “reasonable efforts” requirement.

The court found that the plaintiff’s use of a secured database system and internal practices to manage patient information could support a finding of reasonable secrecy measures. It further noted that the plaintiff’s evidence—showing the use of patient data for marketing and treatment continuity—was sufficient to establish potential economic value.

Misappropriation and use of data. The court also rejected Hansen’s argument that no misappropriation occurred. Relying on RCW 19.108.010(2) and Boeing Co. v. Sierracin Corp., 108 Wn. 2d 38 (1987), it held that misuse of confidential information obtained through a prior relationship could constitute misappropriation.

Evidence that Hansen copied patient files and used them to contact patients created triable issues of fact. The court cited testimony indicating that at least one patient received unsolicited communications from Hansen, supporting the claim of improper use of confidential information.

Ownership of patient records. A central issue concerned whether Hansen owned the patient records he accessed. The court held that, under the employment contract, Hansen obtained the right to access records of patients he treated during his employment. However, it rejected his broader claim that he owned all patient records he accessed. The court found that disputes remained regarding which records Hansen was entitled to and which belonged exclusively to the plaintiff clinic. These unresolved factual questions precluded summary judgment on the trade secret claim.

Tortious interference. The court reinstated the tortious interference claim, holding that it was not preempted by the UTSA. Applying an elements-based approach derived from Boeing, it noted that tortious interference requires proof of a business relationship—an element not required for trade secret misappropriation. The court further found factual disputes regarding whether Hansen improperly solicited patients and interfered with the clinic’s business relationships. Evidence that Hansen contacted patients outside his authorized list supported the claim.

Breach of contract. The court also reversed dismissal of the breach of contract claim, which arose from alleged nonpayment of rent under a lease agreement requiring Hansen’s clinic to pay a percentage of its revenue. It held that factual disputes existed regarding whether the plaintiff provided timely notice of default, whether it waived its right to collect rent, and whether the defendant reasonably relied on any such waiver. Citing Mike M. Johnson, Inc. v. County of Spokane, 150 Wn. 2d 375 (2003), the court emphasized that strict compliance with contractual notice provisions and the existence of waiver or estoppel are fact-intensive inquiries.

Attorney fees. On Hansen’s cross-appeal, the court upheld the denial of attorney fees. It found no evidence that the trade secret claim was brought in bad faith under RCW 19.108.040. It also held that the lease agreement’s fee-shifting provision applied only to arbitration proceedings, which had not occurred.

Thus, the appellate court reversed the trial court’s summary judgment ruling and remanded the case for further proceedings.

The Case is No. 87374-1-I.

Judge: Diaz, J.

Attorneys: Thomas M. Brennan (Brennan Legal, PLLC) for Mill Creek Foot & Ankle Clinic. Christine Angelle Martin-Lord (Sayre Law Offices, PLLC) for Nathan Hansen.

Companies: Mill Creek Foot & Ankle Clinic

Cases: TradeSecrets WashingtonNews