Thank you for sharing!

Your article was successfully shared with the contacts you provided.
In a case that pitted trade secrets against Georgia’s open records law, a Georgia maker of cancer treatment medicine is claiming a victory for corporate confidentiality. A Georgia Court of Appeals panel has held that state regulatory agencies faced with open records requests for corporate filings must determine whether the documents constitute trade secrets before releasing them. The July 7 ruling requires the agency to designate which records are trade secrets and therefore not subject to Georgia’s Open Records Act and to inspection by competitors. The state’s technology businesses have watched the case closely. The Environmental Protection Division (EPD) of the Georgia Department of Natural Resources (DNR) was ready to release documents filed by Theragenics Corp., a Georgia maker of radioactive medical products used in treating cancer. Theragenics competitor International Brachytherapy (IBt) had requested the records. The two companies have been embroiled in litigation in which Theragenics alleges that IBt and some of its principals misappropriated proprietary information belonging to Theragenics. IBt, through counsel, had asked for access to Theragenics’ filings with EPD, which the Buford-based manufacturer must furnish to be licensed in Georgia. Notified by the EPD, Theragenics balked, filing suit in Fulton Superior Court to obtain an injunction to prevent DNR from releasing the records. Access to those documents, which detail its operations, would be akin to furnishing a “technical roadmap” to its competitors, the company argued. Theragenics lost in Fulton, but now its lawyers are claiming a big win for Georgia’s technology companies in the Court of Appeals. “This is not an Open Records Act case,” says Theragenics’ lawyer Jerry W. Blackstock. “It’s a trade secrets case.” With last month’s ruling, Blackstock says, “The Georgia Court of Appeals has told technology companies, ‘Yes, your trade secrets will be protected by the state.’ “ AG’S OFFICE INTERVENES But the state attorney general’s office has asked the Georgia Supreme Court to review the panel’s decision. The petition for certiorari argues that the ruling “imposes an unreasonable responsibility and burden on public agencies and their employees which will serve to frustrate the public policy behind the Georgia Open Records Act.” Theragenics was the first company to research, produce and market a radioactive “seed,” used in treating prostrate cancer. The treatment, known as brachytherapy, involves injecting rice-grain-size pellets of the radioactive isotope Palladium-103 into a patient’s body. The treatment is an alternative to surgery. Blackstock says the treatment has a 96 to 98 percent success rate in curing such cancers. The company also has been successful and is building a second manufacturing facility in Tennessee. COMPETITOR SEEKS FILES As a user of radioactive materials, Theragenics is regulated by the EPD and required to submit certain documentation to the agency. About one-third of the documents were earmarked as proprietary or confidential when they were submitted. In November 1997, IBt filed an Open Records Request to review Theragenics’ files. EPD notified Theragenics it intended to release any documents not marked confidential but allowed Theragenics to review the papers before release. Theragenics then told the EPD many of the unmarked documents — about 60 percent of the file — were also proprietary information. The EPD, however, notified Theragenics that any document not designated as proprietary when first submitted would be provided to IBt. That’s when Theragenics headed to court. But Fulton Superior Court Judge Philip F. Etheridge ruled against the company, refusing to enjoin the DNR. The appellate panel concluded that Etheridge had incorrectly framed the issue. The issue wasn’t whether Theragenics had filed the documents correctly. Writing for the panel, Presiding Judge Marion T. Pope Jr. found that the issue was whether Theragenics otherwise took reasonable efforts to protect the information. “If reasonable efforts were made to protect the dissemination of the information except for providing it to the EPD, then trade secret status was not lost simply because Theragenics did not notify the EPD each time that it provided them with information containing trade secrets,” Pope wrote. Pope noted that DNR had no rules explicitly requiring companies to notify the agency at the time of filing that its documents were proprietary. Instead, DNR’s own rules give it authority to classify documents as confidential when they relate to secret processes, formulas, and methods, or where they were furnished on a confidential basis. The court’s finding “does not eviscerate the purpose of the Open Records Act,” Pope wrote. “Indeed, it is hard to envision how disclosure to a foreign corporate competitor of a private entity’s confidential or proprietary information, which it was required to file with a state agency in order to operate a business in this state, would promote the purpose of the Open Records Act.” He wrote that state agencies must always determine whether records are subject to the Open Records Act or whether exemptions to disclosure apply. “Moreover, even if the state agency is notified that it is receiving trade secret or other information allegedly exempt from disclosure, it is nevertheless incumbent upon the state agency to verify a filing entity’s designation before refusing to disclose the information.” Notifying the company, as EPD did with Theragenics, was a “good first step,” Pope noted in a footnote to Theragenics Corp. v. Georgia Department of Natural Resources, A00A0107 (Ct. App. Ga. July 7, 2000). Presiding Judge J.D. Smith and Judge M. Yvette Miller concurred. CLOSELY WATCHED CASE Blackstock, a partner at Atlanta-based Powell, Goldstein, Frazer & Murphy, who handled the appeal with partner John W. Harbin and associate Tracy M. Culver, says Georgia technology companies had been following the appeal closely. “This case has gotten some notoriety,” Blackstock says. The DNR’s petition for certiorari, however, argues that the appellate decision creates a new and burdensome obligation on public agencies to determine whether its filings are proprietary information and ignores the obligation of the filer “to protect its own allegedly secret information when submitting it to a public agency.” Determining whether documents constitute trade secrets isn’t an easy process, the brief argues, and under the Open Records Act, the agency has just three days to do so.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.