Businesses Can Protect Consultant Identities as Trade Secrets

In a recent case argued by the authors of this article, Surterra v. Florida Department of Health, the First District Court of Appeal held that the identifying information of consultants can be considered a trade secret under section 812.081(1)(c), Florida Statutes, if the required factual predicate is established. Under the statute, the owner of the purported trade secret must prove that the information is: 1) Secret; 2) Of value; 3) Of use in the business; and 4) Of advantage to the business, or providing an opportunity to obtain an advantage, over those who do not know or use it when the owner thereof takes measures to prevent it from becoming available to persons other than those selected by the owner to have access thereto for limited purposes.

The Surterra case began when the company submitted several applications to the Department of Health to obtain licensure as a medical cannabis dispensing organization. Soon after, there was a public records request for the applications, which had portions redacted under the authority of Florida’s public records exemption for trade secret information. The subsequent litigation involved a dispute over the trade secret nature of the redacted portions of the applications. Ultimately, the trial court agreed that nearly all of the information claimed to be trade secret was in fact trade secret. The items that the court found were not trade secrets were the identities of investors, partners, and consultants. Surterra appealed this novel issue to the First District Court of Appeal.

The First District reversed the trial court’s determination with regard to consultants, writing that it considered the consultant identities to be tantamount to a “list of suppliers,” which is a category of information that is explicitly protected under Florida’s trade secret statute. This “supplier” designation stemmed from the fact that certain consultants were suppliers of valuable information with respect to the cultivation, processing, transporting, and dispensing of medical cannabis. In other words, these consultants fit into the definition of trade secret and are eligible for protection from disclosure as long as the statutory factual burden is met. Although the Court found that the consultants’ identities could potentially be protected as trade secrets, the panel stopped short of declaring that the identities were in fact trade secrets. Rather, the Court remanded that issue back to the trial court to make additional findings of fact. As for the issue of the investors and partners, the First District found that there were not sufficient facts in the record establishing them as trade secrets.

Although the Surterra case focused on consultants in the medical cannabis industry, the concept of consultant identities having the potential to be protected as trade secrets is instructive to other businesses as well. Any business can invest in the protection of its valuable trade secret information, including the identities of people under certain circumstances. The most important step a business can take to protect a proprietary consultant relationship is to retain competent counsel in the earliest stages of the relationship. That way, all possible protections can be put in place in the event that the trade secret nature of a consultant’s identity is later challenged.

About the Authors:
John L. Wharton is a member of Dean Mead’s Administrative Law and Business Litigation departments and the Governmental Relations and Lobbying Industry Team. He represents both public and private clients in cases from application creation to administrative litigation before state and federal agencies. He also practices general litigation in state and federal courts. Mr. Wharton has over 30 years of experience in Tallahassee practicing before and often litigating against numerous state agencies in the areas of water resource planning; permitting and regulation; mitigation banking; utility law and utility regulation; professional regulation and environmental law. He may be reached at jwharton@www.deanmead.com.

Brittany Finkbeiner focuses on Real Property, Administrative Law, and Governmental Relations and Lobbying. She also specializes in public records law. Prior to going into private practice, Ms. Finkbeiner served as a chief attorney for the Department of Business and Professional Regulation, Division of Florida Condominiums, Timeshares, and Mobile Homes. In addition, she’s worked at the Florida Department of Economic Opportunity, The Florida Senate Judiciary Committee and as a legislative aide for the Florida Senate. She may be reached at bfinkbeiner@www.deanmead.com.