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State agency must determine if trade secrets exist in public records

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    NMU         GEORGIA         Freedom of Information         May 11, 2001    

State agency must determine if trade secrets exist in public records

  • A company is expected to protect its trade secrets, but a government agency makes the final call as to whether an exemption for trade secrets in the public records law applies, according to a state Supreme Court decision.

A government agency in possession of records submitted to it by a private corporation must decide whether the records contain trade secrets, which would be immune from disclosure under the state open records law, according to an April 30 ruling by the Georgia Supreme Court. The court arrived at its ruling by reviewing an appellate court’s decision in a dispute between a state-run environmental agency and a corporation compelled to document for the agency how it makes its products.

In affirming the lower court’s decision, the high court held that when the state Environmental Protection Division required the Theragenics Corporation to file details of its production in order to gain an operating permit, the EPD became the custodian and regulator of the records. As such, the court said, when a competitor filed an open records request for files, the state agency — not the submitter Theragencis — would determine whether any documents were exempt from disclosure.

Theragenics was still required to make “reasonable efforts” to protect its trade secrets, namely by marking such information when it submitted documents to the EPD, the court said. However, the court also noted that the open records law protects trade secrets, even if a submitter fails to adequately mark the documents.

“By its terms, this trades secrets exception to disclosure under the (Open Records) Act is not expressly limited to only those documents which Theragenics specifically identified as confidential at the time it first provided them to EPD,” Justice George H. Carley wrote for the court.

Theragenics produces radioactive “seeds” that are placed inside cancerous tissue as treatment for the disease. The nature of its product made it subject to regulation by the EPD, which required it to submit detailed reports of its operations. When a competitor company filed an open records request for Theragenics’ documents in 1997, the EPD informed Theragenics that it planned to release all records that the company did not designate as trade secrets. The Environmental Protection Division allowed Theragenics to review the files, and the company found trade secret information that it did not originally mark. When the agency said it still planned to provide the competitor with the records, Theragenics sought an injunction. A trial court, finding that Theragenics failed to make a reasonable effort to protect its proprietary material, denied the request.

However, an appellate court disagreed, ruling last July that when the EPD encountered the open records request, it was required to review the records to see if any exemptions applied, regardless of how Theragenics marked its files. Although the competitor withdrew its open records request after the appellate court’s ruling, the state supreme court on its own initiative reviewed the lower court’s decision.

(Georgia Dept. of Natural Resources v. Theragenics Corporation) ML

© 2001 The Reporters Committee for Freedom of the Press

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