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Ride-sharing services Uber and Lyft suffered a recent setback
before the state of Washington's Supreme Court in their efforts
to protect trade secrets from disclosure under a state public
records law.
In its recent decision, the state supreme court reversed a lower
court that had granted an injunction in the companies' favor,
preventing disclosure. While agreeing, in a close call, that the
disputed data qualified as a trade secret, the high court
overturned the injunction and sent the parties back to a lower
court. The companies must now prove that public disclosure of
ride-sharing information is "clearly not in the public
interest" and that its release to the public would
"substantially and irreparably damage a person or vital
government function." If they cannot make that case, their
trade secrets may lose protection. So back to the trial court
they go.
Here is the background for the case. Following resolution of a
prior dispute, the companies submitted ride-sharing data to the
city of Seattle, such as zip code reports derived from their driver
and passenger databases. Seattle uses this information to
test whether there are service disparities in underserved areas of
the city, and to evaluate transportation systems, infrastructure,
traffic congestion and other transportation-related issues.
The city received a public records request seeking this
information and Uber obtained a state court injunction after
establishing that the requested information was a trade secret. The
case was then appealed to the state's highest court. In a
May 31, 2018, decision, the Court
determined that the trade secrets were not automatically protected
from disclosure under the state's public record statute and
that the companies had to satisfy a more rigorous standard to
protect their information from disclosure. Based on certain
language in the Court's ruling, it may be a heavy lift to
satisfy that higher standard. For example, the Court said
that the ride-sharing data arguably involves a matter of public
interest because the requester of the information uses it to assess
claims of discriminatory redlining. On the other hand, there
was a dissenting opinion that called out the Court for dismissing
the importance of "express and robustly protective trade
secret language" in other state cases and that said the high
court's decision was not "good policy."
It remains to be seen how this turns out, but it is clearly a
case worth watching for all companies that may be required to
submit proprietary information to governmental entities, where the
information is not specifically exempted from disclosure in a
state's public records disclosure laws. As we have
written in this space before, this is just one of many potential traps for
companies that seek to protect their valuable proprietary
information.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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