Does Working With The Government Mean You Lose Your Trade Secret Protection?...Maybe

John Richard Chapman III is a Partner in Holland & Knight's Fort Lauderdale office.

Matthew Zimmerman is a Partner in Holland & Knight's West Palm Beach office.

From SpaceX's groundbreaking work in the aerospace industry to Uber's disruption of the transportation industry, the interaction between innovative companies and federal, state, and local governments is growing - and will continue to do so for the foreseeable future. This creates unique challenges for a corporation that shares its proprietary information with the government but also wants to keep it secret, a trade secret.

Generally, information generated by or provided to the government, whether state, federal,or local, is subject to public disclosure through open government laws (e.g., freedom of information, sunshine or right-to-know laws). While these laws typically provide for some protection against public disclosure of trade secrets, the scope and strength of this protection varies widely. Often, the determination of whether information should be protected is left to administrators or nonjudicial proceedings. So what happens when corporations and public entities exchange protected trade secret or confidential information? Does that information become subject to public disclosure simply because it is in the hands of the government? The answers to these questions vary greatly.

Take for example the aerospace industry. Historically, many associated this industry with NASA, the federal agency responsible for the moon landing. But with exploding privatization, many private companies are facing challenges protecting their competitive secrets when working in conjunction with governmental agencies.

Ten years ago, New Mexico had visions of being the hub for commercial space travel. With the hope of future industry and economic rewards, New Mexico tax payers funded a $220 million "Spaceport America facility" that includes a rocket runway, launch pad and testing facilities. Leaders in the industry, such as Virgin Galactic and Space X, announced plans to conduct operations at the facility over the last several years. Many of those plans were changed or did not come to fruition for various reasons. Now the facility is facing challenges attracting private companies to use the facility, in part because of privacy concerns. Potential tenants for the facility reportedly have concerns about public disclosure of a wide range of information, which can hurt their competitive edge. In response...