46 | Coatings World www.coatingsworld.com September 2015
Protecting the P&C Industry’s Intellectual Assets
by Steve McDaniel, JD, PhD
Technology Litigators
Regulations, regulations, and more regulations. Thoughwedon’tclaim to be experts in untangling and
reading government red tape, we’ve done
so now and then to keep up to date in our
business dealings. And part of that is drafting and editing “Safety Data Sheets,” (SDS),
a recently replacement for Material Safety
Data Sheets, required by the Occupational
Safety and Health Administration (OSHA).
OSHA’s mandated SDSs are to be provided
by chemical importers, distributors, and
manufacturers regarding potentially harmful workplace materials to downstream users of the materials. Ready access to SDSs
for employees is a must when handling
your materials. One question that arises:
Is how do we disclose what is needed for
safe use of your paint and coating materials
on an SDS while maintaining the secrecy of
trade secrets?
Appendix E of section 1910.1200 of
U.S Code of Federal Regulations (CFR)
describes that a trade secret includes any
formula, chemical compound, process of
manufacturing, a pattern for a machine/
device, a list of customers, a process for
treating or preserving a material that gives
an opportunity for advantage over competitors. Other things that can qualify
include ongoing processes related to the
business such as formula/machine(s) used
in production, sales of goods, codes for
determining discounts/rebates/concession
in a catalogue/price lists, methods of office
management/bookkeeping, and specialized
lists of customers. Information related to
ephemeral or single events are generally excluded. The criteria for “secrecy” used by
OSHA to maintain a trade secret status as
such is generally the same as previously discussed in this article series.
Section 3, of an SDS, which describes
composition information on ingredients, is
the place that you going to have problems
with maintaining your trade secrets confi-
dentiality. You must provide information
on each substance’s chemical name, com-
mon name and synonyms, CAS no. and
other unique identifiers; impurities and
stabilizing additives; and the concentra-
tion or concentration range of each chemi-
cal in a mixture. Under CFR 1910.1200
a claim of trade secret may be made to
withhold the specific chemical identity
or the exact percentage-concentration of
a substance in a mixture. But, the claim
of the information being a trade secret
must be supported, the SDS discloses the
“properties and effects of the hazardous
chemical,” and the SDS indicates that the
withheld information is a trade secret. But
Appendix D clarifies that “indicates” actu-
ally means “a statement that the specific
chemical identity and/or exact percentage
has been withheld as a trade secret.” Also
of note, this section of the code clarifies
that “nothing in this paragraph shall be
construed as requiring the disclosure un-
der any circumstances of process informa-
tion which is a trade secret,” so the issues
seem confined to chemical identity and/or
concentration. In looking around for non-
chemically identifying names that can be
used, the term “trade secret ingredient” or
“proprietary ingredient” seems acceptable.
Because the major purpose of a SDS is
to provide guidance as to how to handle a
hazardous material, and what to do medically, the lack of details on a hazardous trade
secret material may be frustrating to medical professional. So, section 1910.1200(i)
(iv)-(i)(2) specifies that the specific chemi-
cal identity and percentage “is made avail-
able to health professionals, employees, and
designated representatives” when a “treat-
ing physician or nurse determines that a
medical emergency exists and the specific
chemical identity and/or specific percentage
of composition of a hazardous chemical is
necessary for emergency or first-aid treat-
ment, the chemical manufacturer, importer,
or employer shall immediately disclose the
specific chemical identity or percentage
composition of a trade secret chemical to
that treating physician or nurse, regardless
of the existence of a written statement of
need or a confidentiality agreement.”
However, if the SDS lists a trade secret
material that is very benign, then we can
see scenarios where the treating physician
or nurse will probably not hit the panic but-
ton and force the information out of you.
Also, as “soon as circumstances permit” the
trade secret holder “may require a written
statement of need and confidentiality agree-
ment….” OSHA publication 3084 perhaps
clarified this situation by stating that “fur-
ther disclosure of the trade secret can be
effectively controlled” by the trade secret
holder demanding “a written statement of
need and a confidentiality agreement to be
completed after the emergency is abated.”
Paragraph (i)( 3) of section 1910.1200
addresses a non-panic situation, where a
whole bunch of people can ask for your
trade secret information for numerous
health related reasons. Specifically, the trade
secret holder “shall, upon request disclose
… to a health professional providing medi-
cal or other occupational health services to
exposed employee(s), and to employees or
designated representatives, if: the request
is in writing” and “the request describes in
reasonable detail” an occupational health
need for the information. The possible oc-
cupational health needs include: “to assess
the hazards of the chemicals to which em-
ployees will be exposed; to conduct or as-
sess sampling of the workplace atmosphere
to determine employee exposure levels; to
conduct per-assignment or periodic medical
surveillance of exposed employees; to pro-
vide medical treatment to exposed employ-
ees; to select or assess appropriate personal
protective equipment for exposed employ-
ees; to design or assess engineering controls
or other protective measures for exposed
employees; and, to conduct studies to deter-
mine the health effects of exposure.” Finally,
the request must explain “in detail why the
disclosure of the specific chemical identity or
percentage composition is essential and that
Many Secrets Disclosed Unless Smartly Done!
