Legal Issues and Emerging Technologies (2022)

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TCRP LRD 59 29 Agreements between governmental agencies and private entities are common to control access to private transporta- tion data provided to the government. For example, the Fed- eral Transit Administration’s MOD Sandbox projects use their agreements with the participants to set the terms and condi- tions of how data will be collected, used, stored, and shared. The Los Angeles County Metro (LA Metro) partnership with Via and the King County Metro, Washington partnership with Via both use PII and trade secret exemptions in their state public records laws to protect disaggregated location and travel data from disclosure. The type of project, the public disclosure laws, the agency’s capacity to manage data, and the partner’s business interests all factor into transit agencies’ willingness to accept certain parameters and aggregation levels of the data produced by their partnership. Any agency contract regarding the disclosure of records should recite the relevant state public records disclosure law. Contractual promises will not prevent disclosure in response to a public records request absent a basis for withholding based in such law.239 E. Third-Party Repositories MOD partnerships could benefit from a third-party reposi- tory. A third-party repository is a potential solution to protect a private mobility service provider data from disclosure under public records laws. The public agency would never hold the mobility service provider’s disaggregated data. Instead, a third- party would serve as a repository for the data and the public agency would have access only to data under conditions that are acceptable to program participants. The third-party repository could also test data accuracy. This approach helps to ensure that the private mobility service provider’s data is accurate and pro- tected. Academic, nonprofit, or for-profit entities could poten- tially play this role. IV. PROTECTING PROPRIETARY INFORMATION AND INTELLECTUAL PROPERTY Public agencies that use technology from third parties will necessarily be entrusted with confidential and proprietary in- formation and trade secrets. This includes information supplied during the procurement process. In the private sector, this in- formation would be protected by bidding laws or nondisclosure agreements. In the public sector, it may be vulnerable to dis- closure under open records laws, discussed in Section III. This section discusses legal issues involving transit agencies’ use of technologies that contain trade secrets and confidential and proprietary information and data. A party’s data and databases may qualify for protection under one or more categories of IP, specifically as a trade secret or possibly under copyright. Transit agencies should consult 239 See, e.g., Spokane Police Guild v. Liquor Control Bd., 112 Wash.2d 30, 40, 769 P.2d 283 (quotations omitted) (“Promises cannot override the requirements of the disclosure law.”). TNCs invest significant resources in collecting and analyzing trip data to determine when and where drivers will be needed and how to engage drivers to meet rider demand. TNCs collect this information to use for their own competitive advantage. If the data is shared publicly, competitors could use the data to their advantage. In addition to knowing where and when there is demand for TNCs, competitors could use the data to cross- check a company’s public promotions against reported trips and obtain valuable metrics into the effectiveness of the company’s marketing and promotions. Courts in several states have found that various data col- lected by TNCs is not a trade secret. A Florida appellate court affirmed a lower court ruling that Uber’s aggregate trip and fee data was not a trade secret and was subject to disclosure under the state’s sunshine law.233 The Washington Supreme Court ruled in May 2018 that, even though Uber and Lyft data regard- ing rides provided in each zip code within the Seattle may be a trade secret, the city should disclose such data under the state’s Public Records Act234 unless doing so would cause substantial and irreparable harm.235 A Pennsylvania court similarly found that Lyft’s statistics on the number of trips provided are not proprietary data and can be disclosed under the state’s Right to Know Law.236 However, an Ohio appellate court found that Lyft drivers’ dates of birth and contact information are sensitive PII exempt from disclosure under the Ohio Open Records Law,237 whereas drivers’ physical descriptors, proof of citizenship, prior felony descriptions, and vehicle descriptions not exempt from disclosure.238 D. Data Sharing in Mobility Partnerships This section discusses data sharing issues that frequently arise when transit agencies partner with private mobility service providers, how public agencies in mobility partnerships can use public records laws in their favor, and the potential use of third parties to collect, validate, and maintain data. Transit agencies and cities are increasingly entering into partnerships with private mobility service providers to enhance public transit services using Mobility on Demand (MOD) and MaaS solutions. One of the biggest impediments to these public- private partnerships is data sharing, or rather the reluctance of private companies to share their data with public agencies. The core of MOD and MaaS is data—including data tracking travel patterns and how individuals move. When a transit agency part- ners with private entities to provide MOD or MaaS service, it raises questions such as: Who owns the data? What constitutes appropriate use? With whom should user data be shared? 233 Rasier-DC, LLC v. B & L Service, Inc., 43 Fla. L. Weekly D145, 2018 WL 354557 (Fla. 4th DCA 2018); see Article I, sec. 24, Florida Constitution. 234 Wash. Public Records Act, §§ 42.56 et seq. 235 Lyft, Inc. v. City of Seattle, 190 Wash. 2d 769, 418 P.3d 102 (2018). 236 Lyft v. Pennsylvania Public Utilities Commission, 145 A.3d 1235 (2016); see Penn. Right to Know Law, 65 §66.1 et seq. 237 Ohio Open Records Law §§ 149.43 et seq. 238 City of Columbus v. Lyft, 22 N.E.3d 304 (2014).

30 TCRP LRD 59 C. Defend Trade Secrets Act of 2016 The Defend Trade Secrets Act of 2016 (DTSA) intended “to make it more practical for trade secret owners . . . to secure ef- fective judicial relief.”249 The DTSA defines an owner of a trade secret to be “the person or entity in whom or in which legal or equitable title to, or license in, the trade secret is reposed.” The DTSA applies to a theft of trade secrets affecting interstate or foreign commerce. The DTSA defines “trade secret” as: (3) the term ‘trade secret’ means all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if— (A) the owner thereof has taken reasonable measures to keep such information secret; and (B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can ob- tain economic value from the disclosure or use of the information[.]250 The DTSA provides for federal criminal and civil actions for theft of trade secrets and a private right of action.251 The DTSA makes it a crime to steal trade secrets related to a product or service used in or intended for use in interstate or foreign com- merce for the economic benefit of anyone other than the own- er.252 Violators may be subject to ten years in prison and fines up to $5,000,000 or three times the value of the stolen trade secret to the organization, including expenses for research and design and other costs of reproducing the trade secret that the organi- zation has thereby avoided.253 The owner of a trade secret may apply for an order granting an ex parte seizure “of property nec- essary to prevent the propagation or dissemination of the trade disclosures and can at best be construed to create federal law of right of nondisclosure, not of nonuse by agency). 249 Pub. L. No. 104-294, 110 Stat. 3488. 250 18 U.S.C. § 1839(3). 251 18 U.S.C. §§ 1832, 1836. 252 18 U.S.C. § 1832(a) (“Whoever, with intent to convert a trade secret, that is related to a product or service used in or intended for use in interstate or foreign commerce, to the economic benefit of anyone other than the owner thereof, and intending or knowing that the offense will, injure any owner of that trade secret, knowingly—[¶] (1) steals, or without authorization appropriates, takes, carries away, or conceals, or by fraud, artifice, or deception obtains such information; (2) without authorization copies, duplicates, sketches, draws, photographs, down- loads, uploads, alters, destroys, photocopies, replicates, transmits, deliv- ers, sends, mails, communicates, or conveys such information; (3) receives, buys, or possesses such information, knowing the same to have been stolen or appropriated, obtained, or converted without authorization; (4) attempts to commit any offense described in para- graphs (1) through (3); or (5) conspires with one or more other persons to commit any offense described in paragraphs (1) through (3), and one or more of such persons do any act to effect the object of the conspiracy, [¶] shall, except as provided in subsection (b), be fined under this title or imprisoned not more than 10 years, or both.”). 253 18 U.S.C. § 1832(b). with the patent or intellectual property counsel and/or conduct jurisdiction-specific research to analyze the legal implications regarding IP protections.240 A. Trade Secrets Protection Generally A trade secret is a type of IP that is protected by federal and state laws. At the Federal level, trade secrets are protected by the Economic Espionage Act, 18 U.S.C. §§ 1831 to 1839, as amended by the Defend Trade Secrets Act of 2016 (DTSA).241 In addition, the Trade Secrets Act, 18 U.S.C. § 1905, protects trade secrets and confidential statistical data submitted to a fed- eral agency.242 At the state level, most states have adopted a ver- sion of the UTSA.243 However, the specific requirements for, and scope of, protection vary from state to state. Under federal and state law, trade secret protections generally apply to business, financial, and technical information that derives independent economic value because it is not generally known or readily as- certainable, and it is the subject of efforts to maintain secrecy. There is no single definition of a trade secret. However, DTSA defines “trade secret” in terms that are consistent with those in the UTSA.244 B. Trade Secrets Act, 18 U.S.C. § 1905 The Trade Secrets Act, 18 U.S.C. § 1905, imposes criminal sanctions on federal government employees who disclose or make known, in any manner or to any extent “not authorized by law,” certain classes of information submitted to a govern- ment agency, including trade secrets and confidential statistical data.245 This statute prohibits the disclosure of “practically any commercial or financial data collected by any federal employee from any source.”246 In Chrysler Corp. v. Brown, the U.S. Supreme Court held that “the Trade Secrets Act does not afford a private right of action to enjoin disclosure in violation of the statute.”247 While 18 U.S.C. § 1905 does not confer a private cause of action, it may provide a standard by which to judge the legality of proposed agency disclosures.248 240 A more thorough analysis of technology contracts and protec- tion of a transit agency’s IP rights was addressed in a 2017 TCRP Research Digest. Larry W. Thomas, TCRP LRD 51: Technology Contracting for Transit Projects, Transportation Research Board of the National Academies of Sciences, Engineering, and Medicine, Washington, D.C., 2017, https://doi.org/10.17226/24869. 241 PL 114-153, 130 Stat 376 (2016). 242 18 U.S.C. § 1905. 243 Uniform Trade Secrets Act (1986). 244 18 U.S.C. § 1839(3). 245 18 U.S.C. § 1905. 246 CNA Fin. Corp. v. Donovan, 830 F.2d 1132, 1140 (D.C. Cir. 1987). 247 Chrysler Corp. v. Brown, 441 U.S. 281, 284, 99 S. Ct. 1705, 1708, 60 L. Ed. 2d 208 (1979). 248 Chevron Chemical Co. v. Costle, C.A.3 (Del.) 1981, 641 F.2d 104, certiorari denied 101 S.Ct. 3110, 452 U.S. 961, 69 L.Ed.2d 972 (holding that 18 U.S.C. § 1905 does not confer private cause of action, but may provide standard by which to judge legality of proposed agency