protecting trade secrets proprietary information

The classic example of a trade secret is the Coca-Cola formula, which has been the subject of urban myths for decades. A more modern version of this story is playing out in Oregon, where the Oregon Department of Justice wants to know the exact formula for the popular 5-Hour Energy drinks. If you watch any amount of television, you’ve certainly heard about 5-Hour Energy, whose commercials are ubiquitous.

A number of  states, including Oregon, are investigating 5-Hour Energy’s advertising. As part of this investigation, 5-Hour Energy provided the Oregon DOJ with a “scientific literature review that contained the amounts of ingredients used in 5-hour ENERGY products,” which only showed the ingredients and had the amount of each ingredient redacted.

After the Oregon DOJ demanded an unredacted version, 5-Hour Energy filed a complaint claiming that the formula is a trade secret. Apparently, if the information is turned over to the Oregon DOJ, it will also be shared with the 33 other states investigating 5-Hour Energy.

This case presents a difficult situation. Certainly, 5-Hour Energy’s formula is likely a trade secret, assuming that it was reasonably protected. And because the requesting parties are governmental entities, subject to FOIA requests and public-records laws, I can understand why 5-Hour Energy would fight this disclosure. At the same time, it seems very difficult to investigate 5-Hour Energy’s advertising practices without knowing what’s in the drink.

Oregon will likely need to demonstrate its need for the exact formula and why the previously provided information is insufficient. If it can, I don’t see an easy solution. Perhaps 5-Hour Energy and the states could negotiate a confidentiality agreement, under which the information provided would be destroyed once the investigation is complete. But 5-Hour Energy would likely be concerned about a leak, with good reason, given the number of states involved.

As an aside, any time a company is litigating with a governmental entity. it must be very careful about what materials are turned over during litigation, since these documents often become public records once the litigation ends.

6 Comments

  1. This would seem to be an opportunity for a protective order or a motion to seal. If the formula is in fact a trade secret then requesting a disclosure under such restrictions seems reasonable, especially in light of FOIA requests that will no doubt be made. If the pressure is dialed up on 5 hour energy then the degree to which it has diligently protected its alleged trade secret will become an issue as well.

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