Illinois Appellate Court Rules That Database Software Subject to a License Agreement is Exempt from FOIA Disclosure

By October 12, 2018 News No Comments

In Garlick v. Naperville Township, 2017 IL App (2d) 170025, the Second District Appellate Court held that a township’s real property assessment data was exempt from disclosure under the Illinois Freedom of Information Act (“FOIA”) because the Illinois Trade Secrets Act and federal copyright laws precluded disclosure of the data in its native format, which was proprietary and confidential under the terms of a license agreement with the vendor.

Naperville Township (the “Township”) provides real property data to the public using online database software that it licenses from JRM Consulting, Inc. (“JRM”), a private vendor.  Garlick submitted a FOIA request to the Township for the real property data, in its native format, stored in JRM’s online database.  The Township denied the request, invoking several FOIA exemptions, and directed Garlick to its website.  Garlick sued the Township for disclosure.

The circuit court ruled that two FOIA exemptions applied to the requested data in its native format.  First, under FOIA Section 7(1)(g), the software contained trade secrets are proprietary or confidential, disclosure of which would cause competitive harm to JRM.  Second, under FOIA Section 7(1)(a), the information was protected by the Illinois Trade Secrets Act and federal copyright law because JRM has asserted intellectual property rights and has not consented to disclosure.  In other words, the Township had a contractual duty under the license agreement to maintain the secrecy of the database for JRM, which made the requested information exempt from disclosure under FOIA.

The appellate court affirmed the circuit court’s ruling.  The court noted that Garlick had conflated the proprietary nature of JRM’s software with the file format in which the real property data was stored.  Even so, in the court’s view, Garlick was essentially arguing about the validity of the Township’s claims that JRM’s software was a trade secret and copyrighted.  The court concluded that this argument lacked merit because FOIA did not provide the proper proceeding for considering challenges to trade-secret or copyright claims.  Moreover, the Township noted that its claims do not extend to the data entered into the database using the JRM software.  To settle the case, the Township offered the data to Garlick, but he rejected the offer for unknown reasons and, instead, raised intellectual property challenges.  The court concluded that those challenges were unavailing.

Schools often license software to store and provide access to data.  In licensing the software, the vendor often requires schools to agree to license agreements that assert the vendor’s intellectual property rights— such as trade secrets and copyrights—over the software.  The data that is stored within the software may be a public record that is subject to disclosure under FOIA.  However, the software itself may be exempt from disclosure under FOIA because of state and federal intellectual property laws.  In light of the Garlick decision, schools should be aware of the terms of their software license agreements, and be prepared to distinguish between a vendor’s software and the public records that are stored within software.

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