In my prior post I interviewed Christopher Morten at Columbia Law School about his article "Publicizing Corporate Secrets," which is forthcoming in University of Pennsylvania Law Review. Morten argues that federal agencies have much more power to publicly disclose trade secrets and confidential information collected from private companies than is commonly believed. He argues that sometimes agencies do have the authority to "break" corporate secrets, and sometimes they do not. His core insight is that ultimately it's the agencies' enabling statutes passed by Congress that dictate their power to disclose trade secrets and confidential information. I will now post links and our discussion of the full text of some of these enabling statutes, so that readers can see the statutes and make their own interpretations.
- The National Transportation Safety Board (NTSB). Title 49 expressly permits NTSB to disclose accident data, even if that data includes trade secrets. 49 U.S.C. § 1114(b)(3).
- The Environmental Protection Agency (EPA). The Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) permits EPA to disclose pesticide formulas, even if those formulas include trade secrets. 7 U.S.C. §§ 136h, 136j. This was, of course, the Act at issue in Monsanto v. Ruckelshaus; in that case, SCOTUS concluded that FIFRA gives EPA legal authority to take trade secret information from pesticide manufacturers and share it with their competitors.
- The National Institutes of Health (NIH). The Food and Drug Administration Amendments Act implicitly permits the NIH to disclose clinical trial data, even if that data includes trade secrets. 42 U.S.C § 282(j) (statute); 81 Fed. Reg. 64982, 64994 (NIH’s interpretation of the same).
- The Food & Drug Administration (FDA). The Food, Drug, & Cosmetic Act implicitly permits FDA to disclose clinical trial data, even if that data includes trade secrets. 21 U.S.C. §§ 371(a), 393(b) (statute); 66 Fed. Reg. 4688, 4694 (FDA’s interpretation of the same). The article Amy Kapczynski and I published last year goes into detail on this data and the relevant statutes.
Here are three examples of enabling statutes that do not allow disclosure.
- The Food Drug and Cosmetic Act prohibits FDA from disclosing pharmaceutical manufacturing processes. 21 U.S.C. § 331(j).
- The Federal Trade Commission Act (FTCA) prohibits the Federal Trade Commission (FTC) from disclosing any trade secrets. 15 U.S.C. § 46(f).
- The Patent Act prohibits USPTO from disclosing applications under certain situations (e.g., less than 18 months from effective filing date). 35 U.S.C. § 122.
CAH: OK. So, looking at these provisions, the ones prohibiting disclosures, like the FDCA with respect to manufacturing processes, are a bit clearer to me than the ones you say allow them. The FDCA, 21 U.S.C. § 331(j), is pretty clear that it prohibits public disclosure of trade secret methods or processes related to making pharmaceutical drugs except in limited circumstances like to the courts or Congress, presumably under a protective order in a closed setting. It prohibits
"[t]he using by any person to his own advantage, or revealing, other than to the Secretary or officers or employees of the Department, or to the courts when relevant in any judicial proceeding under this chapter, any information acquired under authority of...this title concerning any method or process which as a trade secret is entitled to protection...This paragraph does not authorize the withholding of information from either House of Congress or from, to the extent of matter within its jurisdiction, any committee or subcommittee of such committee or any joint committee of Congress or any subcommittee of such joint committee."
The FTCA is similarly prohibitive. 15 U.S.C. § 46(f) gives the FTC certain powers to disclose but really appears to strictly withhold the power to publicly disclose trade secrets.
"The Commission shall also have power ... (f) Publication of information; reports To make public from time to time such portions of the information obtained by it hereunder as are in the public interest; and to make annual and special reports to the Congress and to submit therewith recommendations for additional legislation; and to provide for the publication of its reports and decisions in such form and manner as may be best adapted for public information and use: Provided, That the Commission shall not have any authority to make public any trade secret or any commercial or financial information which is obtained from any person and which is privileged or confidential, except that the Commission may disclose such information (1) to officers and employees of appropriate Federal law enforcement agencies or to any officer or employee of any State law enforcement agency upon the prior certification of an officer of any such Federal or State law enforcement agency that such information will be maintained in confidence and will be used only for official law enforcement purposes, and (2) to any officer or employee of any foreign law enforcement agency under the same circumstances that making material available to foreign law enforcement agencies is permitted under section 57b–2(b) of this title."
The other provisions that you say allow disclosure aren't quite as clear to me. They are vaguer, which is perhaps your point... They leave open a plausible argument of agency authority to publicly disclose trade secrets in some circumstances. That said, to me it seems like preserving confidentiality is still the spirit.
For example, here is the full text of what I think is the relevant provision for the NTSB you mentioned, for disclosure of accident reports, 49 U.S.C. § 1114(b)(3). I added underlines of some aspects of Section 1114 that strike me as especially relevant and ripe for debate.
"(a) General.— (1) Except as provided in subsections (b), (c), (d), and (f) of this section, a copy of a record, information, or investigation submitted or received by the National Transportation Safety Board, or a member or employee of the Board, shall be made available to the public on identifiable request and at reasonable cost. This subsection does not require the release of information described by section 552(b) of title 5 or protected from disclosure by another law of the United States.
(2) The Board shall deposit in the Treasury amounts received under paragraph (1) to be credited to the appropriation of the Board as offsetting collections.
(b) Trade Secrets.— (1) The Board may disclose information related to a trade secret referred to in section 1905 of title 18 only—
(A) to another department, agency, or instrumentality of the United States Government when requested for official use;
(B) to a committee of Congress having jurisdiction over the subject matter to which the information is related, when requested by that committee;
(C) in a judicial proceeding under a court order that preserves the confidentiality of the information without impairing the proceeding; and
(D) to the public to protect health and safety after giving notice to any interested person to whom the information is related and an opportunity for that person to comment in writing, or orally in closed session, on the proposed disclosure, if the delay resulting from notice and opportunity for comment would not be detrimental to health and safety.
(2) Information disclosed under paragraph (1) of this subsection may be disclosed only in a way designed to preserve its confidentiality.
(3) Protection of Voluntary Submission of Information.— Notwithstanding any other provision of law, neither the Board, nor any agency receiving information from the Board, shall disclose voluntarily provided safety-related information if that information is not related to the exercise of the Board’s accident or incident investigation authority under this chapter and if the Board finds that the disclosure of the information would inhibit the voluntary provision of that type of information. ..."
I agree this provision suggests there are some situations where NTSB can disclose accident data, even if that data includes trade secrets. But it also suggests that preserving confidentiality is key, and that interested persons need to get notice and a chance to object when public disclosure is contemplated. It also seems to give the agency discretion not to disclose if it thinks that the FOIA exemptions, or some other protection, apply. And then there are also some pretty open-ended prohibitions in here too, at the end in subsection (3).
So it's very complicated, not clear-cut. At the end of the day, doesn't this provision seem to provide that the trade secrets and confidential information "may be disclosed only in a way designed to preserve its confidentiality"? How does that work, if the disclosure is made "to the public" ?
CM: On NTSB and 49 U.S.C. § 1114, I am indeed of the view that this provision permits the NTSB to “break” trade secrets by disclosing them to the public, so long as it can show that disclosure of the secret is necessary “to protect health and safety.” Here’s what NTSB itself has said about the effect of the statute:
The NTSB retains the authorization to disclose “information related to a trade secret,” as defined by 18 U.S.C. 1905, without the consent of the owner when necessary to “to protect public health and safety” under 49 U.S.C. 1114(b)(1)(D). We interpret this to mean disclosure is necessary to support a key finding, a safety recommendation, or the NTSB's statement of probable cause of an accident or incident. When we release information related to a trade secret or confidential commercial information without consent, we do so in a manner designed to preserve confidentiality. We interpret this to require that the agency minimize the scope and extent of information released.
The NTSB retains the authorization to disclose “information related to a trade secret,” as defined by 18 U.S.C. 1905, without the consent of the owner when necessary to “to protect public health and safety” under 49 U.S.C. 1114(b)(1)(D). We interpret this to mean disclosure is necessary to support a key finding, a safety recommendation, or the NTSB's statement of probable cause of an accident or incident. When we release information related to a trade secret or confidential commercial information without consent, we do so in a manner designed to preserve confidentiality. We interpret this to require that the agency minimize the scope and extent of information released.
CAH: And of course I love the patent application example. The U.S. Patent & Trademark Office (USPTO) is of course a federal agency, and its enabling statute tightly controls its authority to disclose patent applications and information related to those applications, which will likely often include trade secrets. The gist of it is the agency can't disclose these at all ... until a certain window passes, and certain conditions are met, and then it must do so. 35 U.S.C. § 122 says, in relevant part,
"(a) Confidentiality.— Except as provided in subsection (b), applications for patents shall be kept in confidence by the Patent and Trademark Office and no information concerning the same given without authority of the applicant or owner unless necessary to carry out the provisions of an Act of Congress or in such special circumstances as may be determined by the Director.
(b) Publication.— (1) In general.—
(A) Subject to paragraph (2), each application for a patent shall be published, in accordance with procedures determined by the Director, promptly after the expiration of a period of 18 months from the earliest filing date for which a benefit is sought under this title. At the request of the applicant, an application may be published earlier than the end of such 18-month period.
(B) No information concerning published patent applications shall be made available to the public except as the Director determines.
(C) Notwithstanding any other provision of law, a determination by the Director to release or not to release information concerning a published patent application shall be final and nonreviewable.
(2) Exceptions.—
(A) An application shall not be published if that application is—
(i) no longer pending;
(ii) subject to a secrecy order under section 181;
(iii) a provisional application filed under section 111(b); or
(iv) an application for a design patent filed under chapter 16.
(B) (i) If an applicant makes a request upon filing, certifying that the invention disclosed in the application has not and will not be the subject of an application filed in another country, or under a multilateral international agreement, that requires publication of applications 18 months after filing, the application shall not be published as provided in paragraph (1).
(ii) An applicant may rescind a request made under clause (i) at any time.
... [etcetera, lots more in there]
This whole section and policy makes much more sense to me after our discussion. Patent applications contain tons of trade secret and confidential information, and disclosure can be devastating to inventors, for so many reasons. If disclosure happened at any time, then the patent system would not function; people would stop submitting applications. So it is not surprising that this is a place where agency disclosure of collected trade secrets is tightly controlled. But at the same time, patent law wants people to disclose their inventions to the public. That is the whole point. So of course the Patent Act does both. It prohibits public disclosure of patent applications, and then essentially it requires disclosure after 18 months unless the applicant takes certain steps.
Many thanks again!
