November 22, 2011

Mr. W. Montgomery Meitler

Assistant Counsel

Texas Education Agency

1701 North Congress Avenue

Austin, Texas 78701-1494

OR2011-17250

Dear Mr. Meitler:

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# 436846 (PIR 15673).

The Texas Education Agency (the "agency") received a request for copies of Attachments F and G for all vendors that responded to RFO No. 701-1-030 and final evaluation documentation. You state you have released some of the requested information. Although you take no position as to whether the submitted information is excepted under the Act, you state release of the submitted information may implicate the proprietary interests of Skyward, Inc.; the Texas Computer Cooperative and Education Service Center, Region 20 (collectively the "TCC"); JR3 Education Associates, L.P.; Infinite Campson, Inc.; NCS Pearson ("Pearson"); and SunGard Public Sector K-12 ("SunGard"). Accordingly, you state you notified these third parties of the request for information and of their rights to submit arguments to this office as to why their submitted information should not be released. See Gov't Code § 552.305(d); see also Open Records Decision No. 542 (1990) (statutory predecessor to section 552.305 permits governmental body to rely on interested third party to raise and explain applicability of exception in the Act in certain circumstances). We have received comments from the TCC, Pearson, and SunGard. We have considered the submitted arguments and reviewed the submitted information.

The agency acknowledges, and we agree, it failed to comply with the procedural requirements of section 552.301 of the Government Code. See Gov't Code § 552.301. Pursuant to section 552.302 of the Government Code, a governmental body's failure to comply with section 552.301 results in the legal presumption that the information is public and must be released. Information presumed public must be released unless a governmental body demonstrates a compelling reason to withhold the information to overcome this presumption. See id. § 552.302; Simmons v. Kuzmich, 166 S.W.3d 342, 350 (Tex. App.--Fort Worth 2005, no pet.); Hancock v. State Bd. of Ins., 797 S. W.2d 379, 381 (Tex. App.--Austin 1990, no writ); see also Open Records Decision No. 630 (1994). Normally, a compelling reason to withhold information exists where some other source of law makes the information confidential or where third-party interests are at stake. See Open Records Decision No. 150 at 2 (1977). Because third-party interests can provide a compelling reason to withhold information, we will consider whether or not the submitted information is excepted from disclosure under the Act.

Next, we note 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 only received comments from the TCC, Pearson, and SunGard explaining why their information should not be released. Therefore, we have no basis to conclude any of the remaining third parties have a protected proprietary interest in any portion of the submitted 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. Accordingly, the agency may not withhold any of the submitted information on the basis of any proprietary interest the remaining third parties may have in the information.

Initially, we address the arguments by the TCC that its information should not be disclosed because of a confidentiality agreement. Information is not confidential under the Act simply because the party that submits the information anticipates or requests that 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). Consequently, unless the information at issue falls within an exception to disclosure, it must be released, notwithstanding any expectation or agreement to the contrary.

The TCC raises section 552.104 of the Government Code, which excepts from disclosure "information that, if released, would give advantage to a competitor or bidder." Gov't Code § 552.104. This exception protects a governmental body's interests in connection with competitive bidding and in certain other competitive situations. See Open Records Decision No. 593 (1991) (construing statutory predecessor). This office has held that a governmental body may seek protection as a competitor in the marketplace under section 552.104 and avail itself of the "competitive advantage" aspect of this exception if it can satisfy two criteria. See id. First, the governmental body must demonstrate that it has specific marketplace interests. See id. at 3. Second, the governmental body must demonstrate a specific threat of actual or potential harm to its interests in a particular competitive situation. See id. at 5. Thus, the question of whether the release of particular information will harm a governmental body's legitimate interests as a competitor in a marketplace depends on the sufficiency of the governmental body's demonstration of the prospect of specific harm to its marketplace interests in a particular competitive situation. See id. at 10. A general allegation of a remote possibility of harm is not sufficient. See Open Records Decision No. 514 at 2 (1988).

The TCC explains it is a marketplace competitor in the statewide student data services marketplace. ⁽¹⁾ Based on this representation, we find the TCC has legitimate marketplace interests in the development and sale of student data services for purposes of section 552.104. The TCC asserts that release of its information at issue would create potential harm to its interests in the marketplace and give an advantage to competitors in the industry by allowing vendors to gain knowledge of the tools, pricing, and other proprietary information used by TCC's software and data system information. Upon review of the arguments and the information at issue, we conclude the TCC has sufficiently demonstrated that release of the information at issue would harm the TCC in a specific competitive situation. See ORD 593. Accordingly, the agency may withhold TCC's submitted information under section 552.104 of the Government Code. ⁽²⁾

Pearson, and SunGard raise section 552.110 of the Government Code for their submitted information. Section 552.110 protects (1) trade secrets and (2) commercial or financial information, the disclosure of which would cause substantial competitive harm to the person from whom the information was obtained. See 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 trade secret from section 757 of the Restatement of Torts. See Hyde Corp. v. Huffines, 314 S.W.2d 763 (Tex. 1957); see also ORD 552. Section 757 provides that a trade secret is:

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 Huffines, 314 S.W.2d at 776. In determining whether particular information constitutes a trade secret, this office considers the Restatement's definition of trade secret as well as the Restatement's list of six trade secret factors. ⁽³⁾ Restatement of Torts § 757 cmt. b (1939). This office must accept a claim that information subject to the Act is excepted as a trade secret if a prima facie case for the exception is made and no argument is submitted that rebuts the claim as a matter of law. See ORD 552 at 5. 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. See Open Records Decision No. 402 (1983).

Section 552.110(b) protects "[c]ommercial 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(b). This exception to disclosure requires a specific factual or evidentiary showing, not conclusory or generalized allegations, that substantial competitive injury would likely result from release of the information at issue. Id.; see also ORD 661 at 5-6 (business enterprise must show by specific factual evidence that release of information would cause it substantial competitive harm).

Upon review, we find Pearson has demonstrated portions of the information at issue constitute commercial or financial information, the release of which would cause substantial competitive injury. Accordingly, the agency must withhold this information, which we have marked, under section 552.110(b) of the Government Code. However, we find Pearson and SunGard have made only conclusory allegations that the release of any of their remaining information would result in substantial harm to their competitive positions. See Open Records Decision Nos. 661 (for information to be withheld under commercial or financial information prong of section 552.110, business must show by specific factual evidence that substantial competitive injury would result from release of particular information at issue), 509 at 5 (1988) (because 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, and qualifications are not ordinarily excepted from disclosure under statutory predecessor to section 552.110). Accordingly, none of the remaining information may be withheld under section 552.110(b). Furthermore, we conclude Pearson and SunGard have not demonstrated any of the remaining information at issue consists of trade secrets. See ORD 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). Consequently, the agency may not withhold any of the remaining information under section 552.110(a) of the Government Code.

Lastly, Pearson asserts portions of its information may be excepted from disclosure under section 552.101 of the Government Code on the basis of federal copyright law. However, copyright law does not make information confidential for purposes of section 552.101. See Open Records Decision No. 660 at 5 (1999). 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, the agency may not withhold any of the information at issue under section 552.101 in conjunction with copyright law, but any information that is protected by copyright may only be released in accordance with copyright law.

In summary, the agency may withhold the TCC's information at issue under section 552.104 of the Government Code. The agency must withhold the information we have marked under section 552.110 of the Government Code. The remaining information must be released, but any information that is protected by copyright may only 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,

Paige Lay

Assistant Attorney General

Open Records Division

PL/ag

Ref: ID# 436846

Enc. Submitted documents

cc: Requestor

(w/o enclosures)

Infinite Campus, Inc.

4321 109^th Avenue NE

Blaine, Minnesota 55449

(w/o enclosures)

Mr. John McCauley

Texas Computer Cooperative

ESC Region 20

1314 Hines Avenue

San Antonio, Texas 78208

(w/o enclosures)

JR3 Education Associates, L.P.

P.O. Box 1067

Waco, Texas 76703

(w/o enclosures)

Christopher M. Wawack

NCS Pearson, Inc.

3075 West Ray Road, Suite 200

Chandler, Arizona 85226

(w/o enclosures)

Scott Glinski

President

Skyward, Inc.

5233 Coye Drive

Stevens Point, Wisconsin 54481

(w/o enclosures)

Melinda L. Neumann

SunGard Public Sector K-12

3 West Broad Street

Bethlehem, Pennsylvania 18018

(w/o enclosures)

David P. Backus

Underwood, Wilson, Berry, Stein & Johnson, P.C.

1111 West Loop 289

Lubbock, Texas 79416

(w/o enclosures)

Footnotes

1. We note the TCC is a consortium of twenty Texas Education Services Centers.

2. As our ruling is dispositive, we need not address the remaining arguments against disclosure of this information.

3. 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 other 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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