January 6, 2011

Mr. Carey E. Smith

General Counsel

Texas Health and Human Services Commission

P.O. Box 13247

Austin, Texas 78711

OR2011-00293

Dear Mr. Smith:

You ask whether certain information is subject to required public disclosure under the Public Information Act (the "Act"), chapter 552 of the Government Code. Your request was assigned ID# 405156.

The Health and Human Services Commission (the "commission") received two requests for the evaluations/score sheets and submitted competitors' bid proposals pertaining to request for proposals number 529-08-0128. You state the commission has provided some of the requested information to the requestors. Although you state the commission takes no position with respect to the public availability of the submitted proposal information, you state its release may implicate proprietary interests of HP Enterprise Services, LLC ("HPES") and Sagem Morpho, Inc. ("Sagem Morpho"). Accordingly, you state, and provide documentation showing, the commission notified HPES and Sagem Morpho of the requests and of each company's right to submit arguments to this office as to why the submitted information should not be released. See Gov't Code § 552.305(d); see also Open Records Decision No. 542 (1990) (determining statutory predecessor to section 552.305 permits governmental body to rely on interested third party to raise and explain the applicability of exception to disclose under Act in certain circumstances). We have considered comments received from HPES and reviewed the submitted information.

An interested third party is allowed ten business days after the date of its receipt of the governmental body's notice under section 552.305(d) to submit its reasons, if any, as to why information relating to that party should be withheld from public disclosure. See Gov't Code § 552.305(d)(2)(B). As of the date of this letter, we have not received comments from Sagem Morpho explaining why its submitted information should not be released. Therefore, we have no basis to conclude Sagem Morpho has protected proprietary interests in its information. See id. § 552.110; Open Records Decision Nos. 661 at 5-6 (1999) (to prevent disclosure of commercial or financial information, party must show by specific factual evidence, not conclusory or generalized allegations, that release of requested information would cause that party substantial competitive harm), 552 at 5 (1990) (party must establish prima facie case that information is trade secret), 542 at 3. Consequently, the commission may not withhold any of Sagem Morpho's submitted information on the basis of any proprietary interests Sagem Morpho may have in the information. As no exceptions to disclosure have been claimed for this information, it must be released.

Next, HPES seeks to withhold information in its proposal the commission has not submitted for our review. Because such information was not submitted by the governmental body, this ruling does not address that information and is limited to the information submitted as responsive by the commission. See Gov't Code § 552.301(e)(1)(D) (governmental body requesting decision from Attorney General must submit copy of specific information requested).

HPES asserts its submitted information is confidential because it specifically labeled the information as confidential prior to submitting the information to the commission. Information is not confidential under the Act, however, simply because the party that submits the information anticipates or requests it be kept confidential. See Indus. Found. v. Tex. Indus. Accident Bd., 540 S.W.2d 668, 677 (Tex. 1976). In other words, a governmental body cannot overrule or repeal provisions of the Act through an agreement or contract. See Attorney General Opinion JM-672 (1987); Open Records Decision Nos. 541 at 3 (1990) ("[T]he obligations of a governmental body under [the Act] cannot be compromised simply by its decision to enter into a contract."), 203 at 1 (1978) (mere expectation of confidentiality by person supplying information does not satisfy requirements of statutory predecessor to section 552.110 of the Government Code). Consequently, unless HPES's information at issue comes within an exception to disclosure, it must be released, notwithstanding any expectation or agreement to the contrary.

HPES claims its information is excepted from disclosure under section 552.110 of the Government Code. This section protects the proprietary interests of private parties by excepting from disclosure two types of information: (1) "[a] trade secret obtained from a person and privileged or confidential by statute or judicial decision," and (2) "commercial or financial information for which it is demonstrated based on specific factual evidence that disclosure would cause substantial competitive harm to the person from whom the information was obtained." Gov't Code § 552.110(a)-(b).

Section 552.110(a) protects trade secrets obtained from a person and privileged or confidential by statute or judicial decision. Id. § 552.110(a). The Texas Supreme Court has adopted the definition of a "trade secret" from section 757 of the Restatement of Torts, which holds a "trade secret" to be

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 single or ephemeral events 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); see also Hyde Corp. v. Huffines, 314 S.W.2d 763, 776 (Tex. 1958). This office will accept a private person's claim for exception as valid under section 552.110(a) if that person establishes a prima facie case for the exception, and no one submits an argument that rebuts the claim as a matter of law. See Open Records Decision No. 552 at 5 (1990). However, we cannot conclude section 552.110(a) is applicable unless it has been shown the information meets the definition of a trade secret and the necessary factors have been demonstrated to establish a trade secret claim. ⁽¹⁾ Open Records Decision No. 402 (1983).

Section 552.110(b) requires a specific factual or evidentiary showing, not conclusory or generalized allegations, substantial competitive injury would likely result from release of the information at issue. Gov't Code § 552.110(b); Open Records Decision No. 661 at 5-6 (1999).

HPES claims its submitted cost, business, and technical proposal information constitutes trade secrets under section 552.110(a). Upon review, however, we find HPES has not demonstrated how this information, which includes general project information, personnel and company qualifications, pricing information, and general proposed methods for the project at issue, meets the definition of a trade secret. See Restatement of Torts § 757 cmt. b (1939) (trade secret "is not simply information as to single or ephemeral events in the conduct of the business"); Open Records Decision Nos. 402 (section 552.110(a) does not apply unless information meets definition of trade secret and necessary factors have been demonstrated to establish trade secret claim), 319 at 3 (1982) (information relating to organization and personnel, professional references, market studies, qualifications, and pricing not ordinarily excepted from disclosure under statutory predecessor to section 552.110). Consequently, the commission may not withhold HPES's submitted information under section 552.110(a) of the Government Code.

HPES argues its submitted proposal information constitutes commercial and financial information that, if released, would cause the company substantial competitive harm. After reviewing HPES's arguments and the information at issue, we find HPES has established release of its software and hardware specifications information, which we have marked, would cause the company substantial competitive injury. Therefore, the commission must withhold this information under section 552.110(b). We find, however, HPES has made only general conclusory assertions that release of its remaining information would cause it substantial competitive injury, and has provided no specific factual or evidentiary showing to support such assertions. See generally Open Records Decision Nos. 661, 509 at 5 (1988) (because costs, bid specifications, and circumstances would change for future contracts, assertion that release of bid proposal might give competitor unfair advantage on future contracts is too speculative), 319 at 3 (1982) (information relating to organization and personnel, professional references, market studies, qualifications, and pricing are not ordinarily excepted from disclosure under statutory predecessor to section 552.110). Furthermore, we note HPES was the winning bidder in this instance, and the pricing information of a winning bidder is generally not excepted under section 552.110(b). See ORD 319 at 3. This office considers the prices charged in government contract awards to be a matter of strong public interest. See Open Records Decision No. 514 (1988) (public has interest in knowing prices charged by government contractors); see generally Dep't of Justice Guide to the Freedom of Information Act 344-345 (2009) (federal cases applying analogous Freedom of Information Act reasoning that disclosure of prices charged government is a cost of doing business with government). Therefore, the commission may not withhold any of HPES's remaining information under section 552.110(b) of the Government Code.

We note HPES's remaining information may be protected by copyright. A custodian of public records must comply with the copyright law and is not required to furnish copies of records that are copyrighted. Open Records Decision No. 180 at 3 (1977). A governmental body must allow inspection of copyrighted materials unless an exception applies to the information. Id.; see Open Records Decision No. 109 (1975). If a member of the public wishes to make copies of copyrighted materials, the person must do so unassisted by the governmental body. In making copies, the member of the public assumes the duty of compliance with the copyright law and the risk of a copyright infringement suit. Accordingly, HPES's remaining information must be released in accordance with copyright law.

In summary, Sagem Morpho's submitted information must be released. The commission must withhold the software and hardware specifications information we have marked in HPES's submitted proposal information under section 552.110(b) of the Government Code. HPES's remaining information must be released, but any information protected by copyright must be released in accordance with copyright law.

This letter ruling is limited to the particular information at issue in this request and limited to the facts as presented to us; therefore, this ruling must not be relied upon as a previous determination regarding any other information or any other circumstances.

This ruling triggers important deadlines regarding the rights and responsibilities of the governmental body and of the requestor. For more information concerning those rights and responsibilities, please visit our website at http://www.oag.state.tx.us/open/index_orl.php, or call the Office of the Attorney General's Open Government Hotline, toll free, at (877) 673-6839. Questions concerning the allowable charges for providing public information under the Act must be directed to the Cost Rules Administrator of the Office of the Attorney General, toll free, at (888) 672-6787.

Sincerely,

Leah B. Wingerson

Assistant Attorney General

Open Records Division

LBW/dls

Ref: ID# 405156

Enc. Submitted documents

c: Requestors

(w/o enclosures)

Mr. Clark Nelson

Vice President

Sagem Morpho, Inc.

113 South Columbus Street, 4^th Floor

Alexandria, Virginia 12205

(w/o enclosures)

Footnotes

1. The Restatement of Torts lists the following six factors as indicia of whether information constitutes a trade secret:

(1) the extent to which the information is known outside of [the company];

(2) the extent to which it is known by employees and others involved in [the company's] business;

(3) the extent of measures taken by [the company] to guard the secrecy of the information;

(4) the value of the information to [the company] and [its] competitors;

(5) the amount of effort or money expended by [the company] in developing the information;

(6) the ease or difficulty with which the information could be properly acquired or duplicated by others.

Restatement of Torts § 757 cmt. b (1939); see also Open Records Decision Nos. 319 at 2 (1982), 306 at 2 (1982), 255 at 2 (1980).

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