Supreme Court Decides Not to Step Into Planned Parenthood's Trade Secrets Fray

The interplay between trade secrets and the public interest has deep roots in the law, but presents a thorny issues for courts to address.

In recent years, trade secrets law has been at the forefront of the public's concern over fracking technology and in particular the chemical composition data that oil and gas providers may have to make available. Recently, The Wall Street Journal ran an article concerning the software known as TrueAllele - described as a high-tech computer program that helps law-enforcement officials sort out complex mixtures of DNA at a crime scene. The scientists behind the program is resisting defense attorneys' requests to see the source code of the program, claiming it is a trade secret.

Last year, the intersection of trade secrets law and the public interest reached the headlines when the First Circuit held that Planned Parenthood need not release its Manual of Medical Standards and Guidelines based on Exemption 4 to the federal Freedom of Information Act. The suit arose when New Hampshire Right to Life issued a FOIA request to the Department of Health and Human Services after Planned Parenthood received a federal grant. The suit was partly a reverse-FOIA action, whereby Planned Parenthood sought to prevent HHS from releasing portions of documents that HHS had determined were not exempt from disclosure.

The First Circuit had held the Manual (and related pricing information) was subject to Exemption 4. Under the circuit's applicable test, Planned Parenthood did not need to demonstrate actual competitive harm. Instead, it only had to show "actual competition and a likelihood of substantial competitive injury in order" to bring the information within Exemption 4. Further, courts need not conducted a "sophisticated economic analysis of the likely disclosure."

The Supreme Court declined to weigh in and interpret the First Circuit's test concerning Exemption 4, but this denial of certiorari was not without its own headline. Justice Thomas and Justice Scalia dissented from the denial of the cert petition, with Justice Thomas stating that "Courts of Appeal have embraced varying versions of a convoluted test that rests on judicial speculation about whether disclosure will cause competitive harm to the entity from which the information was obtained."

Justice Thomas' statements are somewhat curious, because trade secrets law does not demand an actual demonstration of harm before protection ensues. Indeed, the very test associated with preliminary injunctions necessitates some degree of "judicial speculation" concerning disclosure. But that speculation must be grounded in factual support. It is unclear whether he advocates a very narrow application of Exemption 4 that would call for some broad assessment of actual, as opposed to likely, harm. Regardless, the circuit courts' apparent inconsistency in applying Exemption 4 is the focus of Justice Thomas' dissent and serves as a microcosm of the conflicting interests often at stake in trade secrets disputes.