Protecting trade secrets under Ohio public records laws

The Ohio Public Records Act generally requires the disclosure of “public records” — those records kept by a public office — upon request. Under the act, a public office includes “any state agency, public institution, political subdivision, or other organized body, office, agency, institution, or entity established by the laws of this state for the exercise of any function of government.” A public office may also include certain agencies or nonprofit entities that work with government agencies or receive support from taxpayer dollars.

Private companies that do business with public offices are often required to provide sensitive information in the course of bidding on a project or completing work for the agency. Those companies should be legitimately concerned about protecting trade secrets from disclosure.

While Ohio’s public records laws generally provide for disclosure of public records, the law does, however, create several exemptions that either remove items from the definition of a public record or require or permit those items to be withheld in the event of a public records request. Included in the exceptions are trade secrets. By understanding the Ohio public records laws and the trade secrets exception, you can help your company be responsive to public agencies without jeopardizing sensitive corporate information.

“Trade secrets” are defined under Ohio’s adoption of the Uniform Trade Secrets Act to include any “information, including…any business information or plans, financial information, or listing of names” that (1) derives actual or potential independent economic value 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 (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. R.C. 1333.61(D).

Ohio Revised Code Sections 1333.61 through 1333.69 forbid the unauthorized disclosure or acquisition of trade secrets and Ohio law allows for an injunction against the misappropriation of trade secrets. The Ohio Supreme Court has determined that these provisions meet the standard that the release of these records would be “prohibited by state or federal law” and, as such, trade secrets are exempt from disclosure under the catch-all provision in R.C. 149.43(A)(1)(v). See State ex rel. Besser v. Ohio State Univ., 89 Ohio St.3d 396 (2000).

The Ohio Supreme Court has stated that whether something is a trade secret requires a case-by-case determination. Fred Siegel Co., LPA v. Arter & Hadden, 85 Ohio St.3d 171. In addition, the Court has said that the burden is on the entity claiming the exemption to show that the documents in question meet the definition of a trade secret.

The Ohio Supreme Court has established six factors it uses to determine whether something warrants trade secret protection:

1. The extent to which the information is known outside the business;

2. The extent to which it is known to those inside the business, i.e., by the employees;

3. The precautions taken by the holder of the trade secret to guard the secrecy of the information;

4. The savings effected and the value to the holder in having the information as against competitors;

5. The amount of effort or money expended in obtaining and developing the information; and

6. The amount of time and expense it would take for others to acquire and duplicate the information.

See State ex rel. Besser v. Ohio State Univ., 87 Ohio St.3d 535 (2000), quoting State ex rel. Plain Dealer v. Ohio Dept. of Ins., 80 Ohio St.3d 513, 524-525 (1997).

Courts have placed particular emphasis on efforts made to keep information secret, denying trade secret protection when the holder of the information failed to show that any efforts were made to protect its secrecy and granting the protection when the owner could demonstrate that protective measures were in place. See State ex rel. Toledo Blade Co. v. Ohio Bureau of Workers’ Comp., 106 Ohio St.3d 113 (2005); State ex rel. Lucas County Board of Commissioners v. Ohio Environmental Protection Agency, 88 Ohio St.3d 166 (2000).

Companies that are concerned about protecting trade secret information can take several steps to minimize the risk of disclosure when turning over sensitive material to a public office.

First and foremost, take the appropriate internal steps to provide that trade secret protection will apply to your confidential records. Companies should set up internal protocols for sensitive information, limiting its accessibility to need-to-know employees and ensuring that those with access are aware of the information’s confidential nature. Knowing the impact of having sensitive information disclosed is also helpful in bolstering an argument that the trade secret protection applies.

Companies should include a statement in information sent to a public office that the submission contains trade secrets and that the information is not generally known outside or inside the business. Clearly mark the pages or sections that contain trade secrets so that the public office will be on notice of exactly which parts of the submission should be protected. For the convenience of the public agency, and to minimize the possibility of inadvertent disclosure, a company may want to provide two versions of each document: one that has trade secrets labeled for the exclusive use of the agency; and a second version, exclusively for purposes of public records requests, that has the trade secrets completely redacted.

A confidentiality agreement between the company and the public agency can be helpful to maintain trade secret protection and protect the document from release. Keep in mind, however, that a signed nondisclosure or confidentiality agreement will not be enough to create trade secret status on its own. See State ex rel. Plain Dealer v. Ohio Dept. of Ins., 80 Ohio St.3d 513 (1997). Similarly, a contract clause that provides a blanket waiver of all privileged information is likely not sufficient on its own to allow a public agency to release your confidential information.

Be deliberate and judicious about asserting trade secret protection. It is very unlikely that an entire document is a trade secret, and being over-protective can create additional problems if and when a document is requested pursuant to public records requests.

Be timely and cooperative with the public agency if you get a notice that a document you provided is the subject of a public records request. Agencies are under pressure to timely provide records and will not appreciate a delay caused by a company’s unresponsiveness. Finally, be prepared to immediately step into any disputes or litigation to protect the trade secret status of your documents. It is ultimately the company’s responsibility to establish and fight to protect its own trade secrets.