Washington is not the only state that may allow trade secrets to be accessed through public records requests. In Massachusetts (one of the few states not to adopt a version of the UTSA), trade secrets are exempt from disclosure only in the limited context where the information is voluntarily provided to an agency upon a promise of confidentiality and for the purpose of developing governmental policy. The exemption is not applicable, however, to information submitted to a government agency as required by law or conditioned on receipt of a governmental contract or other benefit. Mass. Gen. Laws Ann. ch. 4, § 7. Florida, Illinois, Utah, and Virginia require trade secrets to be labeled “confidential” to prevent disclosure under their public records acts. Other states, including Alabama, Michigan, New Mexico, Oklahoma, and Louisiana also provide trade secret protection for information submitted to those state governments only under limited circumstances. Like Washington, Nevada requires balancing the public’s interest in disclosure against the privacy interests of the entity seeking to prevent disclosure, which balance may not always adequately protect trade secrets. Such limited exemptions can leave those who are required to submit confidential information to state governments between a rock and a hard place.
Other jurisdictions more closely follow the FOIA’s exemption and explicitly prohibit trade secret disclosure through public record requests. Arnold, supra. For instance, Oregon expressly exempts trade secrets from disclosure under its public records act. Or. Rev. Stat. Ann. § 192.355(9)(a). Similarly, Georgia, Louisiana, Maryland, Mississippi, and South Dakota have specifically carved out an exemption to prohibit disclosure of trade secrets that are included in information submitted to a government agency. Other jurisdictions, such as New Jersey, Rhode Island, and Vermont, make it even more difficult to obtain a trade secret through a public agency records request by excluding trade secrets from the definition of a public record altogether.
Because maintaining secrecy is one of the essential elements of establishing a trade secret, jurisdictions that allow release of proprietary information through public records requests significantly frustrate the purpose of having a trade secret and can jeopardize its very existence. In her concurring dissent in Lyft, Justice McCloud highlighted a significant concern that allowing the state’s public records laws to trump trade secret protection might constitute an unconstitutional taking of private property. Similarly, the Supreme Court of Montana has held that entities are entitled to enjoy the right of confidentiality as it pertains to their trade secrets under both the UTSA and constitutional protections against the taking of private property for public use under federal and state constitutions. Great Falls Tribune v. Montana Pub. Serv. Comm'n, 82 P.3d 876, 883 (Mont. 2003).
Overall, the laws exempting trade secrets from becoming public records are narrowly applied at the federal level, and vary greatly from state to state. Given the risks of disclosure, businesses should take extra precautions when dealing with government entities to prevent public disclosure of their trade secrets. Before submitting trade secret information to any state or federal agency, businesses should do their due diligence and consult with their attorneys to learn the risks associated with submitting any confidential information. In weighing the risks, businesses can decide whether producing the information is absolutely necessary, and if so, consider options available that may prevent disclosure of proprietary information through a public records request. At a minimum, businesses should follow mandated labeling guidelines and mark their trade secrets as “confidential” to alert the agency that the submitted documents could be sensitive. In sum, when faced with submitting proprietary information to government agencies, being proactive is essential to reduce the risk of disclosure and effectively asserting trade secret rights. Action today can prevent a crisis tomorrow.