Striking the right balance between right to know and right to intellectual property protection

Richard Denison, Ph.D., is a Senior Scientist.

There is clearly a need to balance the legitimate claims of companies to protect certain confidential business information (CBI) from public disclosure with the legitimate need for the market, consumers and the public to have access to information they need to make sound decisions about chemicals that are in commerce.  Unfortunately, most of TSCA’s provisions and their implementation by EPA have skewed this balance radically in the direction of denying the public’s right to know and creating an ill-informed chemicals marketplace.

The core problem is two-fold, constituting a vicious circle:  Too many CBI claims are made, and each of the infrequent examinations of such claims done by EPA has found a large fraction to be illegitimate, i.e., not meeting the well-established criteria for what constitutes a legitimate trade secret.  And because of the large number of claims made, EPA has lost the ability to review claims to ensure they are in fact legitimate and remain so over time; this lack of review has led directly to more claims being made, thereby completing the vicious circle. 

Under TSCA companies are free – literally, at no cost – to claim any information they submit to EPA to be CBI, often without providing any justification, thereby denying access to the public and even to state and local governments.  Even the identities of chemicals that are the subject of health and safety studies – which TSCA expressly forbids from being claimed CBI except in very limited circumstances – have been routinely masked under policies in place at EPA until recently.  CBI claims remain in place until and unless challenged by EPA, yet EPA is not required to review the claims, and they never expire.

The Safe Chemicals Act of 2011 (S. 847), would go far to restore the right balance.  All CBI claims would have to be justified up front.  EPA would be required to review them, and only approved claims would stand.  Approved claims would expire after no more than five years, except for types of claims for which EPA determines the five-year term would not apply.  Other levels of government would have access to CBI.

Many in industry have acknowledged the need for substantial reform of TSCA’s policies toward information disclosure.  There is widespread agreement, for example, on the need for up-front substantiation both to reduce the number of claims asserted and better ensure the legitimacy of those claims that are made.  And some in industry have been receptive to the concept of a fee to cover the costs of EPA review of CBI claims, which also could help to reduce the number of claims.

One key to striking the right balance is to recognize that it is often information that links a specific chemical to a specific company or product that is most sensitive.  Many disclosures, for example of a health and safety study on a chemical, which in my view is information for which the public has a right to know, can be done in a manner that does not disclose such linkages and hence avoids or lessens the concern.

The most difficult area is with new chemicals, where companies understandably have a greater need to protect the identity of the chemicals in which they’ve invested.  Here, I think a viable approach may be to provide a time-limited allowance for some types of protections on information concerning new chemicals, but with clear exceptions made for such chemicals where a potential hazard has been identified.

One specific improvement to S. 847 would be to amend the provision limiting CBI claims to a single five- year period, to allow such claims to be extended upon a showing by the claimant that the conditions for granting CBI status in the first place remain.  Another would be to specify up front certain types of information that are always eligible for CBI protection, such as a company’s list of customers or detailed information about the precise process it uses to make a chemical.

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  1. John Christopher
    Posted April 13, 2012 at 9:32 am | Permalink

    Couple of suggestions. (1) If EPA is not reviewing the claims to CBI, then how about setting up a small independent authority to get it done? Consulting outfits like ICF and Dynamac do this kind of work all the time for EPA, DOD, CIA, etc. (2) As a retired guy, I’m a believer in the notion that retired Federal judges, State emplolyees, and others whose discretion has been proven over the decades are a greatly under-utilized resource. Such individuals can advise the Congress and the Executive Branch dispassionately on what are reasonable periods for claims of immunity from infringement on CBI for new chemicals. This could even include retirees from the drug and chemical industries, providing their loyalties are not bound. Paying someone on an hourly basis with no benefits is a lot simpler than setting up a complex budget for some agency or other. Just a check, followed later by a 1099. I would do it, ande I have lots of qualified colleagues who could also do this. With the demographic “graying of America”, the supply of this resource is essentially endless for the next 50 or more years.

  2. Lynn Goldmlan
    Posted April 13, 2012 at 1:06 pm | Permalink

    Thanks, Richard, for such a thoughtful review of the problem!

    Here’s another idea for new chemicals. The claim of CBI could be time limited, as you suggest. Additionally the company could be required to remove the CBI claim when the new chemical actually enters the market at above some threshold of production. One could imagine a provision that might work in much the same way as a “significant new use rule” to make sure that information about the identity of (and by extension health and environmental information about) new chemicals becomes available just as those chemicals become important (potentially) to workers, consumers, health care providers and, of course, state and local governments.

    Also, EPA could have the authority to charge a fee for a CBI claim. This might change behavior by causing industry to think twice about filing a claim (even if this is a modest fee). In reality, review of CBI claims by agency staff requires resources, and a fee would provide those resources in direct proportion to the numbers of claims that are filed.