Considerations for Protecting Trade Secrets in FDA Correspondence

Companies seeking approval from the U.S. Food and Drug Administration (“FDA”) to market a new drug or biological product must submit extensive information to the FDA in support of approval. FDA submissions will often include information that a company considers to be a trade secret. Such information is exempt from public disclosure under the Freedom of Information Act (“FOIA”) Exemption 4 if it falls within the FDA’s definitions of (1) a trade secret or (2) confidential commercial or financial information:

(a) A trade secret may consist of any commercially valuable plan, formula, process, or device that is used for the making, preparing, compounding, or processing of trade commodities and that can be said to be the end product of either innovation or substantial effort. There must be a direct relationship between the trade secret and the productive process.

(b) Commercial or financial information that is privileged or confidential means valuable data or information which is used in one’s business and is of a type customarily held in strict confidence or regarded as privileged and not disclosed to any member of the public by the person to whom it belongs.

21 C.F.R. § 20.61(a)-(c); see also 5 U.S.C. § 552(b)(4); Food Mktg. Inst. v. Argus Leader Media, 139 S. Ct. 2356, 2366 (2019) (“At least where commercial or financial information is both customarily and actually treated as private by its owner and provided to the government under an assurance of privacy, the information is ‘confidential’ within the meaning of Exemption 4.”).

The FDA’s regulations do not, however, provide infallible protection of a company’s trade secret information. At the outset, trade secret and commercial or financial information may only be exempt from disclosure (1) if it is designated as exempt upon submission or within a reasonable time thereafter or (2) if the FDA has substantial reason to believe that information in the records could reasonably be considered exempt. 21 C.F.R. § 20.61; see also 5 U.S.C. § 552(b)(4). Even if a company designates information as exempt, the FDA may still decide that disclosure is required, providing the company a mere five days to object to the disclosure. 21 C.F.R. § 20.61(e). Further, any such designations “will expire 10 years after the records were submitted to the [FDA].” 21 C.F.R. § 20.61(d). At least one district court has interpreted this language to mean that any information submitted to the FDA more than ten years earlier is obtainable through a FOIA request, and thus no longer secret. Fisher v. SmithKline Beecham Corp., No. 07-CV-0347A(F), 2008 WL 4501860, at *10 (W.D.N.Y. Sept. 29, 2008) (“In other words, any information Defendants submitted to the FDA more than ten years ago, Plaintiffs would be able to obtain through a Freedom of Information Act request.”); see also Taylor v. Bildsten, D.O., No. 09-2-03136-5, 2012 WL 12111878, at *1 (Wash. Super. Nov. 06, 2012). That interpretation would impose a ten-year duration on protection of trade secrets if disclosed to the FDA. Cf. Structured Cap. Sols., LLC v. Commerzbank AG, 177 F. Supp. 3d 816, 835 (S.D.N.Y. 2016).

In view of the FDA’s regulations and the limitations of those regulations, counsel for companies should consider the following:

• Any information considered to be a trade secret should be designated as such upon submission to the FDA. Failure to designate not only risks disclosure in the event that the FDA does not have “substantial reason to believe that information in the records could reasonably be considered exempt,” but it also risks forfeiting protection of the information as a trade secret for failure to take reasonable measures to maintain secrecy. g., 18 U.S.C. § 1839(3) (requiring the trade secret owner take “reasonable measures to keep such information secret”).
• Companies should document trade secret information, including all efforts to treat such information as private. See Argus, 139 S. Ct. at 2366. With only five days to object to the disclosure of such information, preexisting documentation will enable a more robust response.
• At least one district court has interpreted the FDA’s regulations as permitting disclosure of any information submitted to the FDA more than ten years prior. Fisher, 2008 WL 4501860, at *10 (interpreting 21 C.F.R. § 20.61(d)). Companies should weigh this potential limitation in considering strategically whether it is better to pursue patent protection or trade secret protection, especially for technologies that typically are protected as trade secrets, e.g., manufacturing processes.

[1] The categories on information exempted from disclosure under the FDA’s regulations differ from those recognized under the Defense of Trade Secrets Act (“DTSA”). Compare 21 C.F.R. § 20.61(a), (b), with 18 U.S.C. § 1839(3). Setting aside the DTSA’s requirements that the owner take reasonable measures to maintain secrecy of the information and that the information derive independent economic value from not being generally known, the DTSA broadly defines the categories of information eligible for trade secret protection as “all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing.” 18 U.S.C. § 1839(3).