ARE TRADE SECRET PROTECTIONS IN GOVERNMENT CONTRACTS ADEQUATE? AN ANALYSIS OF FOIA EXEMPTION 4 AND DATA RIGHTS.

TABLE OF CONTENTS I. Introduction 461 II. Background 463 A. Trade Secret Protections Generally: What Is a Trade Secret, Anyway? 463 B. Overview of Trade Secret Protections Currently Available to [...]
When a company enters into a contract with the federal government, it often faces a considerable risk: the risk that its trade secrets may be exposed and misappropriated, first by the government, and then by its competitors. Although government contractors have several tools that they can use to protect their trade secrets in the procurement context, including data rights, Freedom of Information Act (FOIA) Exemption 4, and other precautionary measures, the balance of risk still tends to tip against even the most diligent and well-counseled contractor. This Note outlines the various ways that trade secret issues arise in government contracts, identifies avenues for relief for contractors, and argues that the lack of trade secret protection in the procurement context may chill companies from contracting with the government at all. Finally, this Note proposes that the government should implement better trade secret protections, including amending FOIA Exemption 4, adding an additional data rights provision in the Federal Acquisition Regulation (FAR) and Defense Federal Acquisition Regulation Supplement (DFARS), and/or expanding the use of Other Transactions Agreements (OTAs) to assure contractors that their intellectual property is secure. Such reforms will offer contractors the type of flexibility that they enjoy in the private sector and thus incentivize them to transact with the federal government.