Shared confidential information by mistake? The Trade Secrets Protection Act offers a solution!

Previously, my colleagues Valerie Lipman and Reinier Pijls reported on the Trade Secrets Protection Act, which came into effect at the end of 2018. The fact that this law can have great added value and that it can be used to correct mistakes is proven by the following recent ruling of the Gelderland District Court dated April 30, 2019.

In the matter before the court, classified information had inadvertently been shared with an opposing party. Fortunately, the Trade Secrets Protection Act provided a solution.

What had happened?

A company dealing in batches of clean and contaminated soil took in a large batch of sand and had it cleaned. A research bureau hired by this company determined after investigation that the sand was contaminated, after which the sand was re-inspected. During this re-inspection, no anomalies are found and the sand is declared clean by the research bureau.

The land was then delivered to a municipality for the construction of new housing developments. After some time, the municipality becomes aware of the initial investigation, followed by more investigations. The municipality also asks the company to provide various data on the origin of the sand. The company says that this data is highly confidential and that the data qualifies as a trade secret. After the Province also gets involved, the company tackles the issue and it is decided to provide some of the requested data after all. The company therefore has an e-mail sent to the municipality, containing information about the sand. In a pdf attachment sent along, certain numbers and addresses about the origin locations of the sand are made illegible with white areas.

This method of concealing confidential information could have been better, as the municipality soon reveals that it could easily remove the white areas, making all the information visible. The company then took the position that the municipality should not use the information made visible and initiated summary proceedings.

In the proceedings, the municipality argued, among other things, that the company had given permission to use the information.

The court's ruling

The court made short shrift of the municipality's defense, ruling that it was sufficiently clear to the municipality that the company did not want to provide the unreadable information to the municipality. There was therefore no question of permission to use the information. The court also overruled a number of the municipality's other defenses.

The court followed the company in arguing that the company does not want the municipality to have the origin data of the batch of sand. This is because the company wants to prevent the municipality from sharing that information with third parties, as it apparently would have done previously, thus creating (even more) negative publicity for the company. The court therefore prohibits the municipality from any use of the unreadable information.

Relevance

This issue is a great example of a case where the Trade Secrets Protection Act came in handy (and yes, of course, the importance of properly making secret information in documents unreadable).