Trade Secret vs. Patent Protection: Consider FOIA or Public Records Requests

13 March 2014 IP Litigation Current Blog

With patents coming under increasing scrutiny at the Patent Trial and Appeal Board (“PTAB”) in conjunction with changes to the patent laws brought about by the America Invents Act (“AIA”), more companies are considering whether to preserve their methods as trade secrets rather than seek patent protection.

A recent decision of the Wyoming Supreme Court reminds us that trade secrets may be defined in several ways – with the most narrow definition often applied in cases involving Freedom of Information Act or public records requests. The court in Powder River Basin Resource Council et al. v. Wyoming Oil and Gas Conservation Commission, Case No. 2014WY37, identified three possible definitions of trade secrets:

  • Trade Secret Under the FOIA:  A secret, commercially valuable plan, formula, process, or device that is used for the making, preparing, compounding, or processing of trade commodities and that can be said to be the end product of either innovation or substantial effort. See Anderson [v. Dep’t of Health & Human Servs., 907 F.2d 936, 943-44 (10th Cir. 1990)].
  • Trade Secret Defined by the Restatement (Third) of Unfair Competition § 39:  Any information that can be used in the operation of a business or other enterprise and that is sufficiently valuable and secret to afford an actual or potential economic advantage over others. See Briefing.com. v. Jones, 2006 WY 16, ¶ 8, 126 P.3d 928, 932 (Wyo. 2006).
  • Trade Secret Defined by the Uniform Trade Secrets Act:  Information, including a formula, pattern, compilation, program device, method, technique or process that: (A) Derives independent economic value, actual or potential, from not being generally known to and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use; and (B) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. See Wyo. Stat. Ann. § 40-24-101(a)(iv) (LexisNexis 2013).

In interpreting a state statute regarding public records requests, the court adopted “the definition of trade secrets articulated by federal courts under the FOIA.” It further confirmed that its “definition requires that there be a ‘direct relationship’ between the trade secret and the productive process.” Id. ¶ 38. (internal quotations omitted).

Public records requests can be a significant source of pre-litigation discovery. While the “direct relationship” limitation may be demonstrated in the case of a method of production maintained as a trade secret, it does provide an additional obstacle for a company seeking to shield its trade secrets. It is certainly something that merits consideration when determining whether to use the patent or trade secret system for protection, particularly where trade secret method information must be disclosed to a regulatory body that could be subject to a public records or FOIA request.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Related Services

Insights

A Review of Recent Whistleblower Developments
19 July 2019
Legal News: Whistleblower Developments
Cloud security inadequate for Cyber threats, are you surprised?
19 July 2019
Internet, IT & e-Discovery Blog
Blockchain: A Tool With a Future in Healthcare
18 July 2019
Health Care Law Today
Do You Know What IMMEX Stands For?
16 July 2019
Dashboard Insights
Review of 2020 Medicare Changes for Telehealth
11 December 2019
Member Call
2019 NDI Executive Exchange
14-15 November 2019
Chicago, IL
MAGI’s Clinical Research Conference
29 October 2019
Las Vegas, NV
Association for Corporate Counsel Annual Meeting 2019
27-30 October 2019
Phoenix, AZ