Trade Secrets Protected From Disclosure Under FOIA…Except For When They Aren’t

We have previously reported about protecting trade secrets from disclosure after a FOIA request here and here. There is something to be said for immediate action and intervening to protect your trade secrets, but sometimes that just isn’t enough.

In a recent decision, the Central District of California denied a protective order for several documents submitted to the government that Exxon contended contain trade secrets. Exxon understandably had intervened in the action to protect its trade secrets. But the Court noted that FOIA exemptions from disclosure are not a mandatory bar to disclosure. Therefore, the government is not required to withhold a document from public disclosure in response to a FOIA request, even if it falls under a FOIA exemption. (Which is why a company is wise to intervene and seek a protective order to prevent an agency from disclosing its trade secrets).

However, at least in the 9th Circuit, the government may not disclose information under FOIA if it is barred by another statute or regulation. Enter the Trade Secrets Act, 18 U.S.C. § 1905. Any government employee can lose his job if he discloses a trade secret. But don’t breathe a sigh of relief just yet…the Trade Secrets Act only prevents disclosure of trade secret information — to the extent not authorized by law. So, if the disclosure of trade secrets is authorized by law, it can still be disclosed in response to a FOIA request!

That is just what happened to Exxon. The Outer Continental Shelf Lands Act (OCSLA) required Exxon to disclose trade secrets in order to get a lease. While OCSLA and the related regulations require that the government maintain the confidentiality of Exxon’s privileged and proprietary information, it is only for a set period of time. Any trade secret information submitted on form BOEM-0137 will be available to the public when the well goes on production, and, if the lease is still in effect, geophysical data, processed geophysical information and interpreted geophysical and geological information is available to the public within 10 years after the applicant submits the data and information.

Before submitting trade secrets to the government, keep in mind that the government’s own requirements to maintain the confidentiality of your information may not always be as protective as you think.