Steve McDaniel and Jon Hurt
Technology Litigators.com
Ahh, the glory of a transparent government. Everyone can find out what is being done in an open
manner when the taxpayers’ dollars are
being spent. That’s a good thing, unless it
involves your trade secrets.
One way this can occur is through
the Freedom of Information Act (FOIA).
Any information that the government
possesses that is not classified can be disclosed upon, request by a member of the
public, using FOIA. And, if the government possesses your trade secrets . . . well,
FOIA can be used to force the disclosure
of your trade secrets . . . even to your
competitors! If you’re not careful. Let’s
talk about being careful, shall we?
So, how would the government get
its hands on your hard earned proprietary information? Typically, it is
through one of two routes. The first is
disclosure of the trade secret in a bid
submission for, or actual work on, a
government project. The second is disclosure due to a mandatory requirement
of, or request by, a regulatory agency
(e.g., the Environmental Protection
Agency, the Occupational Safety and
Health Administration, etc.) overseeing
part of your business’s conduct. Once
in the hands of one government agency
your information may pass to other
government contractors or agencies,
or in some circumstances be part of a
required release to a third party, or be
subpoenaed during a legal proceeding
(that’s a topic for the next iPaint column, how to keep your trade secrets under seal during court proceedings).
Before you can try to protect your
proprietary/trade secret information
from possible public release by the gov-
ernment, you need to understand what
THEY consider to be proprietary in-
formation. And, naturally, the answer
is in the gray zone. Proprietary infor-
mation is not defined in federal legal
code, but a definition is found in the
Federal Acquisition Regulation ( 48
CFR 27.402(b)) which relates
to government contractors:
“Contractors may have propri-
etary interests in data. In order
to prevent the compromise of
these interests, agencies shall
protect proprietary data from
unauthorized use and disclo-
sure. The protection of such
data is also necessary to encour-
age qualified contractors to par-
ticipate in and apply innovative
concepts to Government pro-
grams. In light of these consid-
erations, agencies shall balance
the Government’s needs and the
contractor’s legitimate propri-
etary interests.” Well, that’s re-
assuring, sort of. Truth be told,
however, regulatory agencies
may each have their own spin
on this balance of Government’s
needs vs. your vital commercial
interests, so you should become
familiar with how the line is
draw in for each agency when
you cross-paths and they seek
access to your trade secrets.
To protect yourself, you need
to tip the “government need”
vs. your interest balance by
minimalizing the amount you
disclose while adding as much
weight as possible to “your in-
terest” in the disclosure to the
Government. This can be done
by a process of evaluating the conse-
quences of public release for each docu-
ment, particularly in the case when you
are considering seeking a government
contract. For this mathematical word
problem, you should assume that all the
information will be released to the pub-
lic via a FOIA request, and calculate the
damages to your business. Then decide
if the value of the potential government
contract is worth the risk. If you can eat
the loss, then go ahead and seek the gov-
ernment as a client.
In the case of a request/demand for
information by a government agency,
determine what if any disclosure is absolutely required before coughing the
info up. If you are going to proceed to
disclose information to the government,
try to obtain a confidentiality agreement with the agency prior to transferring your data. Purge any data that
What the FOIA! Freedom of Information Act
vs. Secrecy of Your Trade Secrets
