Chapter §13.4 Trade Secrets|Other Statutes

• Jurisdiction: Washington

§13.4 TRADE SECRETS/OTHER STATUTES

As discussed above, specific exemptions protect against the disclosure of financial, proprietary, or sensitive commercial information. Sometimes, however, requested records do not fall within the scope of a specified exemption but may still be protected from disclosure if they contain unique trade secrets

The Uniform Trade Secrets Act (UTSA), Chapter 19.108 RCW, which prohibits the disclosure of a "trade secret," has been recognized as an "other statute" exemption under the PRA. Prog. Animal Welfare Soc'y v. Univ. of Wash. (PAWS II), 125 Wn.2d 243, 262, 884 P.2d 592 (1994). In PAWS II, the Supreme Court held that the PRA "is simply an improper means to acquire knowledge of a trade secret." Id.; see also Confed. Tribes of Chehalis Res. v. Johnson, 135 Wn.2d 734, 748, 958 P.2d 260 (1998) (PRA "may not be used to acquire knowledge of a trade secret").

To establish a trade secret misappropriation claim, a plaintiff must show that a legally protected trade secret exists. Ed Nowogroski Ins., Inc. v. Rucker, 88 Wn.App. 350, 356-57, 944 P.2d 1093 (1997), aff'd, 137 Wn.2d 427, 971 P.2d 936 (1999). The UTSA defines a trade secret expansively as

information, including a formula, pattern, compilation, program, device, method, technique, or process that:

(a) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who obtain economic value from its disclosure or use; and

(b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

RCW 19.108.010(4).

To be a trade secret, the information must be "novel" in the sense that the information must not be readily ascertainable from another source. Spokane Research & Def Fund v. City of Spokane (Spokane Research I), 96 Wn.App. 568, 578, 983 P.2d 676 (1999), review denied, 140 Wn.2d 1001 (2000); West v. Koenig, 146 Wn.App. 108, 120, 192 P.3d 926 (2008). Information possesses "independent economic value" under the UTSA when effort and expense were incurred to develop the information. McCallum v. Allstate Prop. & Cas. Ins. Co., 149 Wn.App. 412, 424, 204 P.3d 944, review denied, 166 Wn.2d 1037 (2009). The information must be truly unique and not previously disclosed. See Robbins, Geller, Rudman & Dowd, LLP v. State, 179 Wn.App. 711, 328 P.3d 905 (2014) (law firm's fee proposal, client list, and insurance information submitted to apply for a state contract was not a trade secret); Woo v. Fireman's Fund Ins. Co., 137 Wn.App. 480, 489, 154 P.3d 236 (2007) (insurance company manuals were not trade secrets); Boeing Co. v. Sierracin Corp., 108 Wn.2d 38, 738 P.2d 665 (1987) (design of airplane windows was a "trade secret"); Keystone Fruit Mktg., Inc. v. Brownfield, No. CV-05-5087-RHW, 2006 WL1873800, at *8 (E.D. Wash. July 6, 2006) (information about sales and prices that was "specific to [the plaintiff] and not generally known or readily ascertainable by competitors," that "would be valuable to a competitor" if disclosed, constituted trade secrets), aff'd, 352 F. App'x 169 (9th Cir. 2009). "[P]ricing strategies and policies" can qualify as trade secrets under the UTSA Ston Cor Grp. v. Campton, No. C05-1225JLR, 2006 WL 314336 (WD. Wash. Feb. 7, 2006) (denying motion to dismiss trade secrets claim); see also Glacier Water Co. v. Earl, No. C08-1705RSL, 2010 WL 3430518, at *4 (WD. Wash. Aug. 30, 2010) (denying defendants' motion for summary judgment on misappropriation of trade secrets claim when trade secrets included "[p]ricing and cost information"); Nat'l Football Scouting, Inc. v. Rang, 912 F.Supp.2d 985 (WD. Wash. 2012) (genuine issue of material fact as to whether player's grade in a football scouting report was a trade secret). But see Belo Mgmt. Servs., Inc. v. Click! Network, 184 Wn.App. 649, 343 P.3d 370 (2014) (plaintiff failed to establish pricing information qualified as trade secrets).

In the PRA context, parties claiming the trade secret exemption have lost because they failed to prove that the public records at issue contained trade...