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February 18, 1999

Ms. Sandra C. Joseph
Open Records/Disclosure Officer
Comptroller of Public Accounts
State of Texas
Austin, Texas 78774-0100

OR99-0494

Dear Ms. Joseph:

You ask whether certain information is subject to required public disclosure under chapter 552 of the Government Code. Your request was assigned ID# 122080.

The Comptroller of Public Accounts (the "comptroller") received a request for information relating to the Integrated Statewide Administrative System. You contend that release of a portion of the responsive information implicates the proprietary interests of certain firms.(1) You seek our opinion as to whether the submitted information is excepted from public disclosure by section 552.110 of the Government Code. The comptroller does not take a position on this issue. We have considered this exception and have reviewed the submitted documents.

We note that the comptroller received the subject request for information on November 4, 1998, but did not request our opinion in this matter until November 20, 1998. Government Code section 552.301(a) requires a governmental entity seeking to withhold public information to submit a request for a decision to the attorney general "not later than the 10th business day after the date of receiving the written request." Government Code section 552.302 states, "If a governmental body does not request an attorney general decision as provided by section 552.301(a), the information requested in writing is presumed to be public information." This legal presumption may be overcome only by a demonstration of a compelling interest. Hancock v. State Bd. Of Ins., 797 S.W.2d 379 (Tex. App.--Austin 1990, no writ). A demonstration that the requested information is deemed confidential by law is sufficient to negate this presumption. See Open Records Decision No. 150 (1977). As section 552.110 of the Government Code protects the interests of third parties, a demonstration of the applicability of this statute presents a compelling interest sufficient to overcome the presumption of openness. Id.

Pursuant to section 552.305 of the Government Code, this office informed "PeopleSoft," an implicated third party, of the request and of its obligation to claim the exceptions to disclosure they believe apply to the requested information, together with argument as to why any claimed exception applies. PeopleSoft replied, claiming that section 552.104 of the Government Code excepts portions of its proposal from disclosure. PeopleSoft also provided argument which supports the position that the subject information is protected as a trade secret.

The purpose of section 552.104 of the Government Code is to protect the interests of a governmental body in competitive bidding situations. See Open Records Decision No. 592 (1991). Section 552.104 is not designed to protect the interests of private parties that submit information to a governmental body. Id. at 8-9. Therefore, PeopleSoft may not avail itself of the protection of this provision. However, as section 552.110 has been raised, we will examine the subject information in light of that exception to public disclosure.

Section 552.110 protects the interests of those supplying information to governmental entities by excepting from disclosure two types of information: (1) trade secrets, and (2) commercial or financial information obtained from a person and privileged or confidential by statute or judicial decision. PeopleSoft argues that the subject information constitutes trade secrets. For Open Records purposes "trade secret" has the meaning specified in section 757 of the Restatement of Torts. Hyde Corp. v. Huffines, 314 S.W.2d 763, 776 (Tex.), cert. denied, 358 U.S. 898 (1958). To wit:

any formula, pattern, device or compilation of information which is used in one's business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it. It may be a formula for a chemical compound, a process of manufacturing, treating or preserving materials, a pattern for a machine or other device, or a list of customers. It differs from other secret information in a business . . . in that it is not simply information as to a single or ephemeral event in the conduct of the business. . . . A trade secret is a process or device for continuous use in the operation of the business. . . . [It may] relate to the sale of goods or to other operations in the business, such as a code for determining discounts, rebates or other concessions in a price list or catalogue, or a list of specialized customers, or a method of bookkeeping or other office management.

Restatement of Torts 757 cmt. b (1939). In applying the "trade secrets" exception, our office held that a claim for this exception will be accepted when a third party making the claim asserts factual allegations sufficient to present a prima facie case for the exception, provided that a governmental body takes no position on the claim and no one submits an argument that rebuts that claim as a matter of law. Open Records Decision No. 552 (1990).

In this case, no rebuttal argument has been presented and the comptroller has not taken a position in this regard.

PeopleSoft raises no objection to the disclosure of final contract terms or "any State prepared materials regarding cost," but argues against disclosure of the portions of its proposal marked "confidential." PeopleSoft alleges that the information so marked is copyright protected, made available only to licensees who enter into non-disclosure agreements, unknown to outside entities, and is made known to employees on a need-to-know basis. They also claim that strict internal security policies have been implemented to prevent disclosure, that the information forms the "core intellectual property which is the stock and trade" of this firm, that development costs of "hundreds of millions of dollars and tens of thousands of person hours" were expended, and that the information could not easily be acquired.

We have examined the submitted information and conclude that portions thereof fall within the trade secret prong of section 552.110. However not all of the submitted information falls within this definition. We have therefore marked the information accordingly. You may withhold the information marked by us as excepted from disclosure by section 552.110 of the Government Code. The remaining information must be released.

We are resolving this matter with an informal letter ruling rather than with a published open records decision. This ruling is limited to the particular records at issue under the facts presented to us in this request and should not be relied upon as a previous determination regarding any other records. If you have questions about this ruling, please contact our office.

Sincerely,

Michael J. Burns
Assistant Attorney General
Open Records Division

MJB/ch

Ref:: ID# 122080

Enclosures: Submitted documents

cc: Ms. Woo Jin Ho
CIBC Oppenheimer Corporation
CIBC Oppenheimer Tower
World Financial Center
New York, New York 10281
(w/o enclosures)

Mr. Phillip Fauver
Vice President, General Manager
U.S. Southern Operations
PeopleSoft
3353 Peachtree Road N..E. , Suite 600
Atlanta GA 30326
(w/o enclosures)


 

Footnotes

1. We note that the information submitted and the exception raised encompass only a portion of the information responsive to the request. We assume that the balance of this information has been released.
 

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