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Doing Business With The Government Can Threaten Your Trade Secrets


When you sign up to do a government contract, or any service for the government, you may be forgetting one thing: Government information is public, both under federal and state law. That means that anybody can ask for it, and receive it. But you may have information in your bid, or correspondence with the government, that you don’t want being accessible to others just pursuant to a basic request.

What happens if you have a trade secret that you need to protect—but that information is also public information under government transparency laws?

New Mexico is Having Problems

This is a problem that has plagued New Mexico; a state that wants to be a hub for private space travel, but is finding it difficult getting high technology companies to do business with it, due to those companies’ fears of having valuable space and technology information disclosed to the public by public records requests.

What is a Trade Secret?

First, it’s important to establish just what a trade secret actually is. Your trade secret has to be something that has value, creates an advantage to someone who knows the information, and which you have taken reasonable steps to protect, or keep private.

It has to be information that, by itself, has some independent value, and which is not readily ascertainable by the general public.

In most cases, if you have done business with the government, and the information is the subject of a government records request, you will have to file something in court, to protect your information and to keep it from being disclosed. You will have to show that the information being requested meets the trade secret definition listed above.

Competition and Trade Secrets

One thing to think about is whether the information being sought provides a competitive advantage.

For example, information about what you charge every one of your customers, and how you devise your price points, may be trade secrets; competitors can get that information and undermine you. However, information about how much in total your business made in a given year, may not be private; there is no advantage to anyone in obtaining that information (even though you may consider it to be secret).

Designation May Not Help

The other thing you can do, is designate what a trade secret is, in your contracts, bids or agreements. Granted, just because you call something a trade secret, doesn’t make it so. And, the party that wants the records (a third party making a government records request), isn’t a party to your contract, so they didn’t agree anything is a trade secret.

The bottom line is to think about what you are putting in any correspondence to any government agency. It is easy to fall into the same assumption that we have with private contracts, that the contracts you sign, and the correspondence that you write, is private. But courts are very protective of government transparency laws—you don’t want to fall victim to them, by having your competitors get valuable information about you through a records request.

Call the West Palm Beach commercial litigation attorneys at Pike & Lustig today for help you comply with every state law where you do business.



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