The Sanctity of the Trade Secret

Investigative journalists at ProPublica have partnered with Businessweek to investigate serious allegations against natural gas drillers. Some are engaged in drilling that may threaten drinking water supplies–and claiming that trade secrecy protections keep environmental regulators from finding out if people are being endangered:

Some regulators and many environmentalists worry that the fluids injected into many U.S. gas fields could be contaminating drinking water with benzene, methanol, and other toxic substances. The industry counters that its methods are safe. . . . [But] Halliburton [and other drillers] says . . . reluctance to release information about drilling chemicals reflects only a desire to protect valuable trade secrets. “If these formulas were to become available to other companies, it is possible that we could lose our competitive advantage with respect to those companies, not only in Colorado but throughout the world,” says [a] Halliburton spokeswoman.

Halliburton’s assertions here are in line with some major landmarks of “trade secret takings” jurisprudence, including Monsanto (about pesticides) and Philip Morris (about tobacco). However, this line of doctrine is sufficiently underdeveloped that it is by no means an open and shut case. The relationship between changes in IP law and the takings doctrine is a vexed area of law; as a legal realist, I’m surprised by how often IP is treated as real property without the usual types of hedges that limit property rights.

My hope is that the temporary reprieve from high gas prices may undercut the “drill at all costs” mentality that lends support to drillers here. I also hope that work advocating the “virtues of treating trade secrets as IP” focuses on how limits on IP (such as nonpatentability of chimeras) should be imported to trade secret law to protect public health. I’d guess even the most compelling and eloquent “property rights” proponents in the IP community would concede that.

You may also like...