Kilic, Bu cu
Wo king Pape
In o uncha ed wa e s: T ade sec e s law in he AI e a
CIGI Pape s, No. 295
P o ided in Coope a ion wi h:
Cen e o In e na ional Go e nance Inno a ion (CIGI), Wa e loo, On a io
Sugges ed Ci a ion: Kilic, Bu cu (2024) : In o uncha ed wa e s: T ade sec e s law in he AI e a, CIGI
Pape s, No. 295, Cen e o In e na ional Go e nance Inno a ion (CIGI), Wa e loo (On a io)
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CIGI Pape s No. 295 — May 2024
In o Uncha ed Wa e s:
T ade Sec e s Law in he
AI E a
Bu cu Kilic
CIGI Pape s No. 295 — May 2024
In o Uncha ed Wa e s:
T ade Sec e s Law in he
AI E a
Bu cu Kilic
Abou CIGI
The Cen e o In e na ional Go e nance Inno a ion (CIGI) is an independen ,
non-pa isan hink ank whose pee - e iewed esea ch and us ed analysis
in luence policy make s o inno a e. Ou global ne wo k o mul idisciplina y
esea che s and s a egic pa ne ships p o ide policy solu ions o he digi al
e a wi h one goal: o imp o e people’s li es e e ywhe e. Headqua e ed
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du Canada, du gou e nemen de l’On a io e de son onda eu , Jim Balsillie.
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Table o Con en s
i Abou he Au ho
i Ac onyms and Abb e ia ions
1 Execu i e Summa y
1 In oduc ion
2 The His o y o T ade Sec e s
3 The Pa is Con en ion
4 The TRIPS Ag eemen
7 T ade Sec e s P o ec ion in US Law
10 T ade Sec e Dilemma: A he C oss oads o Sec ecy and T anspa ency
12 T ade Sec e s in he Au oma ion E a
14 AI and T ade Sec e s: Hidden Ba ie s
17 Public In e es Excep ions o T ade Sec e s
18 Domes ic Pa hways o T ade Sec e Excep ions
20 Looking Fo wa d
22 Wo ks Ci ed
i CIGI Pape s No. 295 — May 2024 • Bu cu Kilic
Abou he Au ho
Bu cu Kilic is a CIGI senio ellow, and a schola ,
ech policy expe and digi al igh s ad oca e. She
has wo ked wi h a di e se ange o o ganiza ions
ac oss ci il socie y, philan h opy and academia.
He esea ch and w i ings co e digi al igh s,
in ellec ual p ope y (IP), inno a ion and ade, and
she has p o ided echnical ad ice and assis ance in
coun ies in Asia, La in Ame ica, Eu ope and A ica.
As he o me head o policy o F on ie
Technology — a Minde oo Founda ion
ini ia i e — Bu cu guided he o ganiza ion’s
app oach o eme ging echnology, ad oca ing
o esponsible, equi able and jus solu ions.
Be o e joining Minde oo, she di ec ed he Digi al
Righ s P og am a Public Ci izen, a non-p o i
consume ad ocacy o ganiza ion in Washing on,
DC, and also led hei esea ch on access o
medicines. He in luence in ech policy, IP and
ade unde sco es he commi men o policy
en ep eneu ship and igh s-based ad ocacy. She
champions collabo a i e ci il socie y engagemen ,
policy en ep eneu ship and inno a i e policy
de elopmen on a global scale. In 2015, she was
ecognized as one o he 300 Women Leade s in
Global Heal h o he wo k on heal h and ade
policy. F om 2021 o 2022, she was a p ac i ione
ellow wi h he Digi al Ci il Socie y Lab a he
S an o d Cen e on Philan h opy and Ci il Socie y.
She comple ed he Ph.D. a Queen Ma y
Uni e si y o London and holds L.L.M. deg ees
in IP law om Queen Ma y Uni e si y o
London, and in o ma ion echnology law om
S ockholm Uni e si y. She ob ained he law
deg ee om Anka a Uni e si y, Tü kiye.
Ac onyms and
Abb e ia ions
ACLU Ame ican Ci il Libe ies Union
AI a i icial in elligence
CBP Cus oms and Bo de P o ec ion
DHS Depa men o Heal h Se ices
DTSA De end T ade Sec e s Ac
EEA Economic Espionage Ac
EPA En i onmen al P o ec ion Agency
FDCA Fede al Food, D ug, and Cosme ic Ac
FIFRA Fede al Insec icide, Fungicide,
and Roden icide Ac
GDPR Gene al Da a P o ec ion Regula ion
IP in ellec ual p ope y
IPRs in ellec ual p ope y igh s
LLMs la ge language models
MDA Massachuse s Disclosu e Ac
PRA Public Reco ds Ac
TRIPS T ade-Rela ed Aspec s o
In ellec ual P ope y Righ s
UTSA Uni o m T ade Sec e s Ac
WTO Wo ld T ade O ganiza ion
1In o Uncha ed Wa e s: T ade Sec e s Law in he AI E a
Execu i e Summa y
As a i icial in elligence (AI) apidly e ol es and
in eg a es in o ou li es, discussions a ound
anspa ency and accoun abili y in AI sys ems
become inc easingly c ucial. A c i ical ye o en
o e looked aspec o hese discussions is he
p o ec ion o ade sec e s. The e is a delica e
balance be ween sa egua ding p op ie a y igh s
and os e ing an en i onmen whe e AI can be
sc u inized o ai ness, bias and socie al impac .
The c ux o he issue lies in he legal ambigui y
o ade sec e s p o ec ion ac oss ju isdic ions.
In he Uni ed S a es, ade sec e s a e conside ed
in ellec ual p ope y igh s (IPRs), bu he
Eu opean Union does no p o ide hem an
exclusi e IP p o ec ion. In in e na ional law,
unlike he de ailed p o isions o pa en s and
copy igh s, he Ag eemen on T ade-Rela ed
Aspec s o In ellec ual P ope y Righ s (TRIPS
Ag eemen )1 lacks a clea p o ec ion and excep ion
amewo k o ade sec e s, leading o di e se
in e p e a ions and p ac ices a ound he wo ld.
Explo ing he legal unce ain ies su ounding ade
sec e s, his pape demons a es how expansi e
p o ec ion impedes he d i e o anspa ency
and accoun abili y in AI. I a gues ha he cu en
legal amewo k o e ly p o ec s ade sec e s in
AI echnologies, applying p op ie a y p o ec ion
o sou ce code, algo i hms, aining ma e ials
and da a se s, hus c ea ing ba ie s o accessing
in o ma ion essen ial o he public in e es ,
including heal h, sa e y and policy de elopmen .
Add essing his challenge equi es a e hinking
o ade sec e s law o es ablish clea limi s and
excep ions simila o hose in o he domains o
IPRs. This pape con ibu es o he deba e on
AI by p o iding legal insigh s and sugges ing
e o ms o balance p op ie a y igh s wi h he
need o anspa ency. I ad oca es o a legal
e o m inco po a ing public in e es excep ions
wi hin ade sec e s p o ec ion. Such e o m
would no only align wi h b oade socie al needs
bu also suppo inno a ion by ensu ing ha
AI echnologies a e de eloped and deployed
in an e hical and accoun able manne .
1 WTO, Ag eemen on T ade-Rela ed Aspec s o In ellec ual P ope y
Righ s (unamended), Annex 1C o he Ma akesh Ag eemen Es ablishing
he Wo ld T ade O ganiza ion, 15 Ap il 1994, 1867 UNTS 154, 33 ILM
1144 (1994) (en e ed in o o ce 1 Janua y 1995) [TRIPS Ag eemen ],
online: WTO <www.w o.o g/english/docs_e/legal_e/
27- ips_01_e.h m>.
In oduc ion
Ra ely does a day pass wi hou news, op-eds,
epo s o e en s cen ed on AI. I s widesp ead
in luence has led o a mix o exci emen and
signi ican conce ns. The companies behind
hese echnologies pain a g im pic u e o he
u u e, while con inuing o de elop new ools,
echnologies and policy ini ia i es. AI now
ouches upon e e y policy a ea, om labou and
global heal h o nu i ion, inance and mo e. The
landscape is illed wi h egula o y ini ia i es,
global o ums and policy p oposals d i en by ech
gian s and hei allies, along wi h new go e nmen
manda es and ask o ces. The ush o engage
wi h AI is widesp ead, wi h expe s om all
sec o s eage o con ibu e o he con e sa ion.
Wi h c i ical discussions on AI policy, egula ion
and in as uc u e gaining momen um, he e is
g owing ag eemen on he need o anspa ency
and accoun abili y in AI sys ems. These concep s
ha e e ol ed beyond simple buzzwo ds and
a e now c ucial o hough ul and ad anced
policy dialogue. Howe e , his aises se e al
ques ions: Fo whom is anspa ency bene icial,
and how can we ensu e accoun abili y? Wha a e
he necessa y ools, sys ems and measu es?
A signi ican bu o en neglec ed aspec o
hese discussions is he ole o ade sec e s.
The ounda ional elemen s o AI sys ems,
such as sou ce code, algo i hms, da a se s and
aining manuals, a e o en p o ec ed as ade
sec e s. This poses a complex challenge a he
c oss oads o echnology, p op ie a y igh s and
policy discussions shaping he AI landscape.
T ade sec e s ha e a ague s a us in legal
sys ems, a ying g ea ly om one ju isdic ion
o ano he . In he Uni ed S a es, ade sec e s
a e ea ed as a o m o IPRs, while in con as ,
he Eu opean legal sys ems do no ecognize
ade sec e s as an exclusi e IPR. The lack o
legal consis ency is p ima ily because he e is
no in e na ional consensus on he issue. Unlike
pa en s and copy igh , which a e clea ly de ined
unde he TRIPS Ag eemen , ade sec e s a e
no ho oughly egula ed in in e na ional law,
leading o a wide ange o in e p e a ions and
applica ions in di e en legal sys ems.
2CIGI Pape s No. 295 — May 2024 • Bu cu Kilic
The legal ambigui y su ounding ade sec e s
poses conside able challenges o AI policy
de elopmen , pa icula ly o ini ia i es aimed
a enhancing anspa ency and accoun abili y.
T ade sec e s a e inc easingly being used as a
coun e a gumen agains eques s o disclosu e,
access, da a sha ing and due p ocess.
Discussions on AI go e nance o en only ligh ly
ouch on o en i ely sides ep ade sec e s.
Recen ly, i has become simple o asse ade
sec e s p o ec ion claims bu mo e challenging o
dispu e hem, leading o o e ly b oad p o ec ion
o da a, da a se s, aining ma e ials, sou ce
code and algo i hms. The lack o sc u iny o
ade sec e s, combined wi h a eluc ance o
discuss hei limi a ions, impedes p og ess
owa d achie ing anspa ency, accoun abili y,
egula ion and inno a ion in AI. The e is a
clea need o mo e in-dep h discussions and
ac ionable solu ions, as ade sec e s cu en ly
lack de ined bounda ies, lexibili ies and
excep ions ha a e ypical o o he IP igh s.
A g owing body o li e a u e discusses he
challenges posed by he p o ec ion o ade
sec e s, c ea ing ba ie s o accessing da a and
in o ma ion c ucial o he public in e es , such
as de ails abou pha maceu icals and accines,
c iminal jus ice and su eillance echnologies,
and en i onmen al haza ds. This end owa d
g ea e sec ecy con lic s di ec ly wi h c ucial public
in e es s, including accoun abili y, public sa e y and
policy. This pape aims o syn hesize key insigh s
om his body o wo k by ocusing on he legal
aspec s o ade sec e s. I se s ou o be he legal
oice in he oom, examining he o en o e looked
ye c ucial wo ld o ade sec e s. I explo es
how ade sec ecy can hinde access o i al
in o ma ion necessa y o es ing and e alua ing
AI echnologies, pa icula ly in iden i ying biases
and disc imina ion, he eby impeding public
policies and ini ia i es aimed a anspa ency and
accoun abili y. The goal is o p o ide legal cla i y
and di ec ion in con e sa ions on AI, ocusing on
his essen ial bu equen ly o e looked aspec .
I AI policy is a complex puzzle we aim o sol e,
hen ade sec e s ep esen a co ne s one piece.
Wi hou add essing his key elemen , ou puzzle
emains incomple e, missing a c i ical dimension.
The His o y o T ade
Sec e s
The o igins o ade sec e s law can be aced
back o Roman law (Yene all 2021), bu i s mode n
o mula ion was de eloped by he Anglo-Ame ican
legal sys em. The cou s in England and he
Uni ed S a es i s ecognized a cause o ac ion o
damages based on he misapp op ia ion o ade
sec e s in he nine een h cen u y (Lemley 2008).
The Anglo-Ame ican doc ine o ade sec e s
inco po a es a se ies o ela ed common law
o s, such as b each o con idence, b each
o con iden ial ela ionship, common law
misapp op ia ion, un ai compe i ion, unjus
en ichmen , and o s pe aining o espass o
unau ho ized access o a plain i ’s p ope y (ibid.).
Howe e , his mode n concep o ade sec e s
is less i mly es ablished in non-common-
law coun ies. I s ounda ion es s on a ious
legal heo ies, such as con ac , p ope y,
iducia y ela ionships and unjus en ichmen
(Czap acka2012).
The ques ion o whe he ade sec e s can be
ea ed as p ope y igh s, akin o copy igh s,
pa en s o adema ks, emains un esol ed.
Ci il law ju isdic ions ha e adi ionally shown
eluc ance o ecognize ade sec e s as IP
igh s.2 This illus a es a key dis inc ion in legal
pe spec i es be ween common law and ci il law
sys ems.
In ci il law sys ems, he p o ec ion o p ope y
igh s, including in angible asse s, is acknowledged
as a undamen al igh . Cen al o his p o ec ion
is he nume us clausus3 doc ine. This doc ine
es ablishes ha he numbe , na u e, c ea ion,
ans e and e mina ion o eal igh s a e limi ed
(and closed). As such, p ope y igh s as absolu e
igh s a e se using s ic ly de ined pa ame e s.
They o e p o ec ion only o ca ego ies ha a e
explici ly ecognized and go e ned by law (ibid.).
The doc ine does no allow o he au onomous
2 “Gi en ha ade sec e s a e no a o m o exclusi e in ellec ual p ope y
igh ”; see h ps://single-ma ke -economy.ec.eu opa.eu/indus y/
s a egy/in ellec ual-p ope y/ ade-sec e s_en.
3 Di ec ly ansla ed om La in, his e m means “ he numbe is closed.” See
Me ill and Smi h (2000, 4).
9In o Uncha ed Wa e s: T ade Sec e s Law in he AI E a
ade sec e s may be unnecessa y, as o he legal
amewo ks, such as con ac s and o law, al eady
p o ide adequa e ools o sa egua d agains
he misapp op ia ion o ideas. This pe spec i e
challenges he need o dis inc ade sec e s
p o ec ion, sugges ing ha exis ing legal ools
a e su icien o add ess conce ns ela ed o he
p o ec ion o sec e in o ma ion (Simpson 2005).
Following he landma k Ruckelshaus . Monsan o
decision, he ise o ade sec e s p o ec ion in US
law con inued wi h he enac men o he Economic
Espionage Ac (EEA) in 1996. This legisla ion, which
came in he wake o heigh ened awa eness and
legal ecogni ion o ade sec e s pos -Monsan o,
signi ican ly expanded he legal amewo k o
ade sec e s, s eng hening he sa egua ds a ailable
o indus y. I is speci ically ailo ed o add ess
o eign espionage, imposing c iminal penal ies
o he he o ade sec e s ha bene i o eign
go e nmen s, hei ins umen ali ies o agen s.24
Cong ess has shi ed he ounda ion o ade sec e
misapp op ia ion liabili y mo e i mly in o he
domain o p ope y han e e be o e. The enhanced
p o ec ions embedded in he law ha e c ea ed a
powe ul ool o indus y, enabling i o exclude
aluable disco e ies om wide socie y (ibid.).
Designed o sa egua d in o ma ion ha is
aluable and c ea es a compe i i e ad an age,
de i es i s alue om i s sec e na u e and has
been he subjec o easonable e o s o keep i
sec e , he EEA has a scope ha is b oade han
ha o he UTSA, encompassing a wide a ie y
o echnological and in angible in o ma ion
(Nashko a 2023, 645). I de ines ade sec e s as “all
o ms and ypes o inancial, business, scien i ic,
echnical, economic, o enginee ing in o ma ion,
including pa e ns, plans, compila ions, p og am
de ices, o mulas, designs, p o o ypes, me hods,
echniques, p ocesses, p ocedu es, p og ams, o
codes, whe he angible o in angible.” None heless,
de e mining wha cons i u es a ade sec e
emains highly ac speci ic, dependen on he
na u e o he in o ma ion and he pa icula s
o how i s con iden iali y is main ained.
The legisla i e his o y o he EEA has aised
signi ican conce ns. No ably, Cong ess did no
consul any IP expe s du ing he legisla i e p ocess.
The e was no subs an ial discussion abou how he
EEA would in e ac wi h he ade sec e s law’s
24 18 USC § 1831 – Economic espionage.
objec i e o p omo ing inno a ion o socie al
bene i . Ins ead, he commi ee epo s and loo
deba es su ounding he EEA p edominan ly
e lec a p o-business s ance. The es imony ha
was hea d came exclusi ely om indus y expe s,
who na u ally had sel -in e es ed pe spec i es
(Simpson 2005). The EEA has ecei ed conside able
c i icism om schola s o i s lack o balance and
conside a ion o b oade socie al impac s (ibid.).
Building upon he ounda ion se by he EEA,
he US Cong ess ook ano he signi ican s ep
in 2016 wi h he passage o he De end T ade
Sec e s Ac (DTSA). This ac was he esul o
a mul i-yea e o o ede alize ade sec e s
p o ec ion, ma king a signi ican expansion
o ade sec e s law. I es ablished a ede al
p i a e cause o ac ion o cases in ol ing
he misapp op ia ion o ade sec e s, u he
solidi ying he legal amewo k in his a ea, bu
i did no p e-emp s a e ade sec e s law.25
In esponse o conce ns abou he po en ial
con lic be ween ade sec e s p o ec ion and
public in e es in accessing in o ma ion, he DTSA
inco po a ed whis le-blowe p o ec ions, g an ing
immuni y o whis le-blowe s who con iden ially
sha e in o ma ion while epo ing illegal ac i i ies
o law en o cemen o in he con ex o a legal
sui , p o ided ha hei disclosu es a e made
unde seal. These whis le-blowe p o ec ions
a e designed o s ike a c i ical balance be ween
main aining he con iden iali y o ade sec e s
and ensu ing anspa ency and accoun abili y,
pa icula ly in sensi i e a eas such as heal h, sa e y,
ci il igh s, inancial ma ke s, consume igh s and
en i onmen al p o ec ion (Ka yal and G a es 2021).
In conclusion, while he DTSA does p o ide some
sa egua ds, hey a e a om being comp ehensi e
o sa is ac o y. This aspec o he DTSA unde sco es
i s in en o p o ec ade sec e s, bu i also
highligh s he need o a s onge ocus on public
o e sigh and he en o cemen o a ious laws
ha sa egua d he b oade in e es s o he public.
25 18 USC § 1838 – Cons uc ion wi h o he laws.
10 CIGI Pape s No. 295 — May 2024 • Bu cu Kilic
T ade Sec e Dilemma:
A he C oss oads
o Sec ecy and
T anspa ency
T ade sec e s p o ec ion, b oadened and
s eng hened h ough he decisions o US
cou s, p esen s a signi ican ye o en
o e looked challenge, po en ially unde mining
access o in o ma ion and a ious ci il igh s
and p o ec ions. A co e issue is he o e ly
b oad applica ion o ade sec e claims. The
de e mina ion o wha exac ly cons i u es a ade
sec e o en elies signi ican ly on he expe ise
and c ea i i y o co po a e legal counsel. This
leads o an expansi e in e p e a ion, s e ching
he adi ional bounda ies o wha is conside ed
a ade sec e . I is likely ha a signi ican
po ion o IP ela ed o AI is being p o ec ed as
ade sec e s in he Uni ed S a es, con ibu ing
o he b oad applica ion (Quinn Emanuel T ial
Lawye s 2020). O en, in o ma ion labelled as
p op ie a y ails o sa is y he es ablished legal
c i e ia o ade sec e s p o ec ion. This becomes
pa icula ly c i ical when he public in e es
demands a ce ain le el o anspa ency, e en in
ins ances in ol ing legi ima e ade sec e s.
T ade sec e dispu es inc easingly in ol e no
only di ec compe i o s bu also hi d pa ies,
ex ending beyond he scope o iginally in ended by
ade sec e s law. This expansion o ade sec e s
o co e basic se ices and publicly a ailable
in o ma ion illus a es how ade sec e s law
can be s a egically used o “weaponized” o
he pu pose o concealing in o ma ion (Ka yal
and G a es 2021). This end no only challenges
he con en ional unde s anding o ade sec e s
bu also aises conce ns abou he implica ions
o such p ac ices o anspa ency, public access
o in o ma ion, and public heal h and sa e y.
Fo example, ha ing access o he sou ce code o
so wa e used o essen ial go e nmen se ices,
such as bene i adminis a ion o unde s anding
he inne wo kings o AI sys ems and hei aining
da a, is o en i al o public policy and o e sigh .
I unde sco es he need o a mo e equi able
app oach o ade sec e s p o ec ion. While i may
be impo an o sa egua d p op ie a y in o ma ion
ha mee s he p o ec ion c i e ia, his should
no come a he cos o concealing in o ma ion
ha is c ucial o public wel a e and sa e y.
T ade sec e s law has e ol ed o o e b oad
p o ec ion o wha companies label as ade
sec e s, ea ing e ms such as “sec e ,”
“p op ie a y” and “con iden ial” as synonyms
o es ic ing access (Pooley 2022). This end
encou ages ex ensi e use o ade sec e claims,
o en blocking disclosu e demands and hinde ing
public access and egula o y o e sigh .
This is no a new p oblem, ye i is equen ly
o e looked in he con ex o public policy deba es.
Va ious sec o s, including pha maceu icals,
obacco, so wa e and chemicals, ha e encoun e ed
and con inue o g apple wi h he ade sec e
p oblem. In nume ous cases, ci il libe ies
ad oca es, consume g oups, public heal h
o ganiza ions, communi y leade s and indi iduals
con on he expansi e ade sec e claims.
Reg e ably, cou s ha e ailed o suppo e o s
o se limi s on his kind o in o ma ion sec ecy.
This sec ion aims o highligh he in imida ing
na a i e cons uc ed by companies a ound ade
sec e s, a na a i e ha demands immedia e
e lec ion and ac ion. This is pa icula ly u gen
as eme ging echnologies such as AI inc easingly
in luence ou li es, shaping ou u u e, igh s
and democ acies. The e a e aluable insigh s
o be gained om o he sec o s — insigh s
ha can in o m discussions on po en ial u u e
di ec ions and e o ms in ade sec e s law.
In he yea s ollowing he Monsan o decision,
cou s o en in e p e ed ade sec e s b oadly,
expanding he limi s o ade sec e s p o ec ion,
especially in ma e s o disclosu e and access.
In he pos -Monsan o legal landscape, one
pa icula ly oubling case is Philip Mo is, Inc., .
Reilly.26 This case o igina ed om he Massachuse s
Disclosu e Ac (MDA), equi ing ciga e e
manu ac u e s seeking o sell hei p oduc s
in he s a e o disclose any obacco addi i es.
The law’s in en ion was o educe public heal h
isks and os e esea ch on he heal h e ec s o
componen s such as addi i es and la ou ings,
which obacco companies ypically keep
26 Philip Mo is, Inc Reilly, 312 F (3d) 24 (1s Ci 2002) [Philip Mo is].
11In o Uncha ed Wa e s: T ade Sec e s Law in he AI E a
con iden ial.27 Despi e i s signi ican implica ions
o public in e es , his law was ne e implemen ed
bu ins ead esul ed in p olonged li iga ion.
The cou ul ima ely sided wi h Philip Mo is,
ecognizing ha he ciga e e ing edien s we e
bo h a ade sec e and p ope y. I ecognized
ha he companies had legi ima e in es men -
backed expec a ions and uled ha he manda o y
disclosu e o hei sec e s cons i u ed an
uncons i u ional aking o hei p ope y unde
he Fi h Amendmen . While acknowledging he
public in e es in disclosu e, he cou exp essed
conce ns28 abou he law’s pe cei ed lenien
s anda ds o disclosu e, which s ipula ed ha
in o ma ion could be eleased i i “could” bene i
public heal h. This, he cou ea ed, could esul in
signi ican p i a e loss in he e en o disclosu e.29
The cou was con inced ha he obacco
companies had a p ope y in e es in hei ade
sec e s. I iewed he MDA as ans o ming
“p i a e p ope y in o public p ope y wi hou
compensa ion,” cons i u ing a clea iola ion
o he Fi h Amendmen ’s akings clause.30
In he ongoing s uggle be ween he go e nmen ’s
au ho i y o egula e he common good and
he p ope y in e es s o companies, he e is a
g owing conce n ha he balance may ha e shi ed
away om he public in e es . The Philip Mo is
case p o ides an insigh ul bu disconce ing
pe spec i e, sugges ing ha p i a e p ope y
igh s, especially hose conce ning ade sec e s,
ha e aken p ecedence o e b oade public
heal h conside a ions and public in e es .
This expansion has u ned ade sec e s p o ec ion
in o a signi ican legal hu dle, especially
e iden in legisla i e e o s add essing public
in e es policies on access, sa e y and heal h.
F acking chemicals, linked o se ious heal h isks,
including cance and neu ological diso de s,
illus a e he ension be ween ade sec e s and
public in e es (Kapczynski 2022). Despi e he
27 US, Massachuse s Disclosu e Ac : Massachuse s Gene al Laws, 1996,
c 94, § 307B.
28 Philip Mo is, sup a no e 26 a 32 (“Fo a s a e o be able o comple ely
des oy aluable ade sec e s, i should be equi ed o show mo e han a
possiblebene iciale ec ”).
29 Ibid.Thecou easoned ha “speci iclawssimplycanno des oy
p ope y in e es s.”
30 Ibid.
clea heal h implica ions o hese chemicals,
companies can claim hem as ade sec e s, o en
wi h minimal jus i ica ion, me ely by icking a box.
This p ac ice, suppo ed by he ossil uel lobby,
limi s public access o c ucial in o ma ion abou
he chemicals con amina ing g oundwa e .31
Despi e g owing conce ns, he indus y con inues
o lobby he EPA o claim ade sec e s p o ec ion
by asse ing ha “[h]yd aulic ac u ing is a
highly complex and compe i i e indus y whe e
ade sec e s a e c i ical asse s” (Zink 2018, 1162).
Consequen ly, public access o de ailed in o ma ion
abou hese chemicals emains limi ed. E en in
inciden s o likely wa e con amina ion, companies
such as Hallibu on ha e managed o keep he lis
o chemicals used con iden ial (Kapczynski 2022).
While s a e egula o s migh know hese
chemicals, hei abili y o sha e his in o ma ion
is es ic ed, limi ing access o esea che s and
he public. S a e-le el egula o y bodies, whe e
acking o e sigh p ima ily occu s, equen ly
ace esou ce cons ain s ha limi hei abili y o
p o ide ex ensi e o e sigh (ibid.). This illus a es
he impac o ade sec e s p o ec ion claims
on public heal h and sa e y, demons a ing
he challenges in balancing co po a e sec ecy
wi h he public’s igh o in o ma ion in
c ucial heal h and en i onmen al ma e s.32
F om chemicals o ciga e es, ade sec e s
ha e equen ly been u ilized by co po a ions
o es ic public access and disclosu e, e en
in a eas c ucial o public heal h and sa e y ha
a e egula ed and subjec o public o e sigh .
This aises signi ican conce ns abou eme ging
echnologies such as AI, whe e public o e sigh
is minimal, and unde sco es he need o e hink
ade sec e s p o ec ion o ensu e i does no
obs uc public access o in o ma ion.
31 “Fo ins ance, in Texas, a e ha s a e adop ed a disclosu e law, be ween
Ap il 2011 and Decembe o 2012, acking companies claimed ade
sec e o p op ie a y p o ec ion 10,120 imes in epo ing ela ed o
12,140 ins ances o acking. An in es iga ion by he Obama-e a DOE
[Depa men o Ene gy] in 2014 came o a simila conclusion: ade
sec e s we e being in oked 84% o he ime” (Fink 2019, 1002).
32 Ibid.
12 CIGI Pape s No. 295 — May 2024 • Bu cu Kilic
T ade Sec e s in he
Au oma ion E a
The esponsibili y o managing and ope a ing
public in as uc u e and se ices, which
adi ionally lay wi h he go e nmen , is
inc easingly being ans e ed o p i a e
companies in he Uni ed S a es. In deli e ing
essen ial se ices such as elecommunica ions,
Medica e, Medicaid and wel a e p og ams,
hese p i a e companies adhe e o comme cial
law s anda ds and p ac ices, including ade
sec ecy as a c ucial ool (Le ine 2011).
Au oma ed decision making, be i ia so wa e o
AI sys ems, su e s om a lack o anspa ency,
enabling co po a e dominance in public sphe es,
educing anspa ency and accoun abili y, and
unde mining public expec a ions o due p ocess.
This issue has been a he cen e o coun less
cases, a ying in ac s, pa ies and yea s, bu he
unde lying na a i e emains consis en . When
indi iduals challenge hese au oma ed decisions,
hey equen ly ecei e he esponse ha he
sys ems o algo i hms a e p o ec ed as ade
sec e s, p e en ing go e nmen o icials om
disclosing he algo i hms o sou ce code. O en,
hose ad e sely a ec ed by hese decisions a e om
poo , ma ginalized and/o mino i y communi ies.
They may ind ways o b ing hei cases o cou ,
ei he h ough class ac ion lawsui s o wi h he
help o p o bono lawye s, bu hen ace esis ance
om companies ha claim he algo i hms a e
ade sec e s, hence esis ing disclosu e.
When cou s e en ually compel disclosu e
and expe s e iew he sys ems, i equen ly
becomes e iden ha he algo i hms o sys ems
a e biased, lack c i ical da a poin s o employ a
one-size- i s-all app oach ha is unsui able o
he in ended se ices. This pa e n unde sco es
he signi ican impac o au oma ed decision-
making sys ems on public wel a e and he
p essing need o g ea e anspa ency and
accoun abili y in hei deploymen and ope a ion.
To p o ide a conc e e example, in Idaho, he
s a e implemen ed a new AI p og am in 2011
o de e mine budge alloca ions o Medicaid’s
homeca e se ices. Indi iduals wi h de elopmen al
and in ellec ual disabili ies who depended on he
Medicaid p og am began no icing educ ions in
hei homeca e hou s, ypically be ween 20 and
30 pe cen (S anley 2017). Unde his p og am,
bene icia ies we e equi ed o isi a medical
assessmen cen e whe e an assessmen p o ide
would comple e a p op ie a y o m. This o m
de ailed each indi idual’s need o assis ance
in daily ac i i ies such as eeding, oile ing and
d essing (B own e al. 2020). The da a om his
o m was hen manually en e ed in o a digi al
budge ool, essen ially an Excel sp eadshee , which
hen calcula ed a dolla amoun o he assessed
needs based on a p op ie a y da abase. This amoun
ep esen ed he annual budge o hei se ices.33
Howe e , when bene icia ies ques ioned how hese
dolla amoun s we e de e mined and he a ionale
behind hese cu s, especially since hei disabili ies
and needs had no changed, he esponse om
he Medicaid p og am was obs uc i e. O icials
s a ed ha he de ails o he calcula ion could no
be disclosed because hey we e p o ec ed as ade
sec e s, he eby lea ing ecipien s in he da k abou
he speci ics o hei se ice budge calcula ions.
The Ame ican Ci il Libe ies Union (ACLU) s epped
in, ep esen ing 4,000 Idaho esiden s in a lawsui
demanding he disclosu e o he o mula ions
and assessmen ools. The cou sided wi h
he ACLU, uling ha i was a iola ion o due
p ocess o educe someone’s heal h-ca e se ices
by US$20,000 annually wi hou a anspa en
explana ion and elying on “black box” sys ems
(S anley 2017). Once he ACLU ob ained he
algo i hms, i was e ealed ha he s a e had
de eloped he o mulas in-house, wi hou p ope
alida ion, s anda diza ion o audi ing. An expe
e iew o hese o mulas e ealed signi ican
issues wi h bo h he da a and he modelling.
Du ing he ial, ade sec e s eme ged as a poin
o con o e sy, especially when a hi d-pa y
endo ha de eloped one o he assessmen ools
sough o es ic access o i s assessmen bookle s,
in oking ade sec e s p o ec ion (ACLU 2023).
The cou concluded ha he depa men ’s
o mulas and assessmen s we e so un eliable ha
hey dep i ed people o hei Medicaid budge s
a bi a ily, iola ing he due p ocess igh s
33 “We asked a ede al cou o o de he Depa men o disclose i s
sys em.Wi hina ewweekso ilingsui ,wego ha o de .Thenwe
go he sys em. I was a se o o mulas in a ai ly basic Mic oso Excel
sp eadshee .TheDepa men ’sassesso sen e annualassessmen esul s
in o a copy o he sp eadshee o each pe son. The sp eadshee , in
hiddencells,compu es hepe son’sbudge amoun ”(ACLU2023).
13In o Uncha ed Wa e s: T ade Sec e s Law in he AI E a
gua an eed by he Cons i u ion. Ul ima ely, he
cou o de ed a comple e o e haul o he sys em.34
Despi e being one o he mos enligh ening legal
challenges agains a black box sys em, i ook
he ACLU ex ensi e e o — mon hs o wo k,
h ee expe s and mo e han US$40,000— o
decons uc and c i ique he sys em and an
addi ional 2,000 hou s o a o ney and pa alegal
wo k o secu e a se lemen ollowing he cou ’s
decision (ibid.). T ade sec e s li iga ion is no only
cos ly bu also ime-consuming, o en s e ching
o e yea s. Fo indi iduals wi hou signi ican
esou ces o suppo om o ganiza ions such as
he ACLU, challenging hese au oma ed decisions
becomes ex emely di icul , highligh ing a
signi ican ba ie o jus ice and accoun abili y.
This pi o al case da es back o 2016, and one
migh ha e expec ed i s lessons o guide he
Idaho Depa men o Heal h and Wel a e, which
adminis e s he Medicaid p og am, in i s u u e
p ac ices. Un o una ely, i seems hose lessons
we e o e looked. Acco ding o he ACLU o
Idaho, he depa men in oduced a new sys em
c ea ed by a hi d-pa y endo and once mo e
used ade sec e s o limi anspa ency and due
p ocess. As a esul , people wi h de elopmen al
disabili ies and hei ad oca es a e blocked om
checking he sys em’s manual o any biases,
mis akes o o he p oblems (ibid.). The Idaho
depa men ’s ac ions e lec a b oade end
among public agencies: he p ocu emen o AI
sys ems sh ouded in ade sec ecy in c ucial public
wel a e sys ems, a p ac ice ha con ibu es o
widesp ead con usion and ha ms bene icia ies.
Simila ly, in A kansas, he Depa men o Heal h
Se ices (DHS) eplaced nu se e alua ions
o homeca e se ices wi h an algo i hmic
sys em. The a ionale was ha compu e s
would be less expensi e and less biased
han nu ses (Leche 2018), who p e iously
conduc ed comp ehensi e assessmen s using
a 286-ques ion o m o de e mine a pe son’s
weekly homeca e needs. Howe e , once
implemen ed, his new sys em p oduced a bi a y
and illogical esul s (Ci on and Calo 2021).
Fo example, he algo i hm classi ied a oo
ampu ee as ha ing “no oo p oblems,” igno ing he
inc eased need o assis ance due o ampu a ion.
34 K. W. A ms ong, 180 F Supp (3d) 703 (D Idaho 2016); see also K. W.
A ms ong, 789 F (3d) 962 (9 h Ci 2015).
Key indi idual de ails and con inence his o y we e
o e looked, and he se e i y o condi ions was no
di e en ia ed despi e egula ions equi ing such
dis inc ions (Leche 2018). “Algo i hmic absu di ies”
in au oma ed decision making become e iden
in decisions such as he one whe e an algo i hm
alloca ed he same le el o ca e o a pe son wi h
quad iplegia, demen ia o schizoph enia as i did
o someone wi h only quad iplegia, bla an ly
igno ing he addi ional ca e needs associa ed wi h
demen ia and schizoph enia (Ci on and Calo 2021).
In 2016, Legal Aid o A kansas iled a lawsui agains
DHS on behal o physically disabled esiden s
in A kansas whose homeca e was educed by an
a e age o 43 pe cen ollowing he implemen a ion
o his algo i hmic sys em. In ex eme cases, aid
was cu by mo e han 56 pe cen . The sys em le
many se e ely disabled indi iduals wi hou access
o essen ial needs such as ood, oile ing and
medicine o ex ended pe iods (De Liban 2017).
The lawsui , which led o an injunc ion p e en ing
DHS om using he au oma ed sys em un il i
could jus i y i s decisions, e en ually esul ed in
a uling ha he s a e had ailed o ollow i s own
ulemaking p ocedu es, including no p o iding
adequa e no ice o hose a ec ed by he new
me hodology.35 This case in A kansas unde sco es
he a - eaching consequences o elying on
au oma ed sys ems wi hou o e sigh , pa icula ly
when c i ical public wel a e se ices a e in ol ed.
In an encou aging de elopmen , a ecen Fede al
Ci cui decision om July 2023 may ha e a -
eaching implica ions o hose aiming o
challenge he use o AI on due p ocess g ounds
(Coglianese 2023). A ecen Fede al Ci cui case,
no di ec ly ela ed o AI bu add essing he
con lic be ween due p ocess and ade sec e s,
uled ha ade sec e s p o ec ion mus yield o
due p ocess.36 The dispu e in ol ed a company
impo ing pencils pu po edly manu ac u ed in
he Philippines. US Cus oms and Bo de P o ec ion
(CBP) con ended ha he impo e iola ed
ade ules by ansshipping pencils om China
h ough he Philippines o a oid an i-dumping
du ies assessed on pencils o Chinese o igin. The
impo e p o es ed ha i s due p ocess igh s
35 A k. Dep’ o Human Se s. Ledge wood, 530 SW (3d) 336, 340
(2017).
36 Royal B ush Manu ac u ing, Inc Uni ed S a es, 75 F (4 h) 1250 (Fed Ci
2023).
14 CIGI Pape s No. 295 — May 2024 • Bu cu Kilic
we e iola ed because CBP did no g an access
o con iden ial pho os and business da a om
he Philippine manu ac u e . This in o ma ion
was c i ical as i demons a ed he Philippine
manu ac u e ’s inabili y o p oduce he olume
o pencils impo ed o he Uni ed S a es. CBP
main ained i could no disclose his in o ma ion
due o con iden iali y obliga ions (ibid.).
The Ci cui Cou ejec ed he go e nmen ’s
a gumen , s a ing ha he due p ocess clause o
he Cons i u ion manda es ha pa ies a ec ed by
go e nmen decisions ha e he igh o iew he
e idence agains hem. This cons i u ional manda e
akes p ecedence o e s a u o y p ohibi ions
on disclosing ade sec e s. The cou no ed,
“Because he Cons i u ion au ho izes, and indeed
equi es, he elease o con iden ial business
in o ma ion in his case, he T ade Sec e s Ac
does no s and in he way o such elease” (ibid.).
I held ha CBP could ha e sha ed he con iden ial
business in o ma ion unde a p o ec i e
o de , p e en ing u he disclosu e (ibid.).
Ca y Coglianese (2023) sugges s ha his uling
opens a new a enue o legal challenges o
agencies’ AI applica ions, acili a ing access
o c ucial in o ma ion abou he algo i hms.
This is pa icula ly ele an when hese
algo i hms a e de eloped and deployed by
p i a e con ac o s claiming ade sec e s
p o ec ion (ibid.). This in e p e a ion indica es
a signi ican (and ideally las ing) shi in
balancing ade sec e s p o ec ions wi h due
p ocess conside a ions, especially ega ding AI
echnologies employed by go e nmen agencies.
AI and T ade Sec e s:
Hidden Ba ie s
In his Sena e es imony, Richa d Eppink, legal
di ec o o he ACLU o Idaho, shed ligh on
why he K. W. . A ms ong case has become a
signi ican e e ence poin in discussions abou
AI sys ems. The case is e e enced in he Whi e
House’s Oc obe 2022 Bluep in o an AI Bill
o Righ s37 and ea u ed p ominen ly in ci il
37 See www.whi ehouse.go /os p/ai-bill-o - igh s/.
and human igh s schola ship a icles. Eppink
highligh ed ha he case is pa icula ly ins uc i e
because i i idly demons a es he a ious ways
au oma ed decision-making sys ems can ail.
The case implica ions a e p o ound, especially
conside ing he simplici y o Idaho’s sys em.
The ac ha simple Excel sp eadshee o mulas
could gi e ise o a mul i ude o cons i u ional
issues unde sco es he u gen need o obus
go e nance o sa egua d agains po en ial p oblems
in oday’s mo e ad anced AI sys ems (ACLU 2023).
This conce n, as a icula ed by Eppink, who has
spen yea s challenging hese sys ems o p o ec
he mos ulne able, is c ucial. The insigh s om
all hese cases demons a e how ade sec e s
can c ea e ba ie s o access and due p ocess,
highligh ing he impo ance o challenging “ ade
sec e hicke s” ha companies ha e wo en
a ound a ious ypes o da a agg ega ion. These
hicke s can include an a ay o da a agg ega ed
on he sou ce and p ocessing o oxic was e;
de ails abou wa e and ene gy consump ion,
which Google equi ed o cons uc ing an
inno a i e da a hub in No h Ca olina; and
in o ma ion held by ide-sha ing companies
such as Ube and Ly ega ding he zip codes
o hei pick-ups and d op-o s (Fia 2022).
None heless, hey also shed ligh on he
o e whelming challenges in ol ed — he ex ensi e
ime, e o and inancial esou ces equi ed o
b ing hese sys ems o cou and challenge ade
sec e s p o ec ion. These ac o s u he complica e
he pu sui o anspa ency and due p ocess,
making his a leng hy and cos ly endea ou .
This eali y should undamen ally in o m and
shape ou app oach o AI go e nance and
egula ion. The shi om human o AI sys ems
becomes pa icula ly c i ical when AI sys ems
ake o e asks and make decisions once handled
by humans, which a e inhe en ly accompanied
by accoun abili y mechanisms ailo ed o
human o e sigh . This ansi ion has led o a
po en ial e osion o gua an ees o anspa ency,
accoun abili y and due p ocess. Un o una ely,
accoun abili y mechanisms and legal s anda ds
go e ning decision making ha e no e ol ed a
he same pace as echnological ad ancemen s
(K oll e al. 2017, 636). To add ess his, he e is
a p essing need o laws o adap , aiming o
eins a e he igh s and alues ha we e p o ec ed
unde he p e ious human-d i en sys em. The e
ha e been p oposals o legal and echnical
15In o Uncha ed Wa e s: T ade Sec e s Law in he AI E a
mechanisms o es o e he s a us quo ha
exis ed be o e his shi (Ci on and Calo 2021).
Since hese sugges ions we e made in 2017, AI
echnologies ha e become mo e in eg a ed in o
ou li es, ye he undamen al p oblem emains
un esol ed. The inc easing eliance o many
go e nmen agencies on p i a e companies o
expe ise and skills in AI sys ems has in oduced
a c i ical legal dilemma. Ou legal amewo ks
and accoun abili y s anda ds con inue o lag
behind hese apidly ad ancing echnologies.
When hese companies asse ade sec e s
p o ec ion o e hei algo i hms, aining da a,
inpu pa ame e s o any agg ega ed da a, hey
e ec i ely c ea e a legal black box. This aises a
c i ical ques ion: Does he ade sec e s p o ec ion
claimed by hese companies ine i ably lead o
he denial o due p ocess igh s o indi iduals
o co po a ions (Coglianese 2023)? When he
b oadened and s eng hened scope o ade
sec e s is ac o ed in o his equa ion, he p oblem
becomes e en mo e complex and opaque. This
highligh s he ension be ween p op ie a y
p o ec ion in AI sys ems and he p inciples o
anspa ency, accoun abili y and he undamen al
igh o due p ocess. A comp ehensi e and
mul i ace ed esponse is needed ha no only
add esses he ad ancemen s in AI bu also
add esses he in icacies o ade sec e s law.
In a landma k case om Sea le, Ly and Ube
(Ly , Inc. . Ci y o Sea le) in oked he ade sec e
a gumen in an a emp o a oid submi ing
s anda dized qua e ly epo s o he ci y.38 These
epo s included a ious da a ca ego ies, such as
he o al numbe o ides and pick-up and d op-o
zip codes. Acco ding o an ag eemen be ween he
ci y, Ly and Ube , he companies we e obliga ed
o p o ide hese epo s qua e ly. Howe e , Ly ’s
lawye s a gued ha he zip code epo s cons i u ed
ade sec e s unde he UTSA and exp essed
conce ns abou con iden iali y in ans e ing
da a o municipal au ho i ies, despi e he ci y’s
implemen a ion o measu es o sa egua d he da a.
The si ua ion escala ed in 2016 when an Aus in-
based ide-sha e analys , unde he Public
Reco ds Ac (PRA), eques ed access o epo s
con aining da a om la e 2015 o analyze
e idence o edlining — o see i he companies
38 Ly , Inc Ci y o Sea le 94026-6 (Wash Sup C 2018).
we e ai ly se ing communi ies o colou .
The Ci y o Sea le in o med him ha Ly had
claimed hese epo s we e con iden ial, leading
o legal ac ion unde he PRA o access o he
epo s (Gu man 2018). The King Coun y Supe io
Cou ini ially issued a pe manen injunc ion,
p e en ing he disclosu e o hese epo s and
ag eeing wi h Ly ha he zip code epo s we e
ade sec e s unde he UTSA (Monsees 2018).
Howe e , he injunc ion decision was e en ually
o e u ned by he Washing on Sup eme Cou ,
which g an ed access o he epo s. The cou
uled ha he epo s in ques ion quali ied as
“public eco ds” despi e con aining ade sec e s.
Acco ding o he cou ’s decision, he disclosu e
o hese eco ds could be law ully wi hheld
only i i was de e mined ha such disclosu e
“would clea ly no be in he public in e es and
would subs an ially and i epa ably damage
a pe son o a i al go e nmen in e es .”39
The Ly case p o ides c ucial insigh s in o he
ex en o ade sec e s p o ec ion claims, o mo e
accu a ely, he ex en o which companies can
asse ade sec e s p o ec ion o e da a (Fia 2022).
Despi e he cou ’s e en ual uling in a ou o
Sea le, he jou ney o ha decision was leng hy,
in ol ing mul iple cou s, legal p oceedings
and signi ican legal cos s, ul ima ely bo ne by
axpaye s. Fo he Ci y o Sea le, gaining access o
da a se s o e which legal and con ac ual igh s
we e es ablished in a 2014 media ion ag eemen
p o ed o be a esou ce-in ensi e endea ou .
Despi e hei ag eemen o sha e da a, bo h
Ly and Ube did no hesi a e o asse ade
sec e claims o e i . This case unde sco es he
challenges posed by inc easingly b oad ade
sec e s p o ec ion, o claims he eo , and hei
a - eaching implica ions o da a go e nance and
public policy ac oss a ious sec o s, including
anspo a ion, labou and compe i ion.
Since Cha GPT’s launch in No embe 2022, la ge
language models (LLMs) and gene a i e AI ha e
domina ed AI discussions, ca alyzing a b oad
indus y-wide ush o adop hese ad anced
echnologies. LLMs a e e olu ionizing how we li e,
wo k and conduc business wi h unp eceden ed
speed. Ye hey p esen se e al challenges, no ably
he isk o gene a ing inaccu a e, un eliable and,
a imes, hallucina ed ou pu s. This issue s ems
39 Ibid.
16 CIGI Pape s No. 295 — May 2024 • Bu cu Kilic
om he “ga bage in, ga bage ou ” p inciple, which
is exace ba ed by poo ly labelled, inaccu a e,
biased o incomple e da a se s (Awa i, n.d.).
Mos leading LLMs a e de eloped by majo ech
companies such as Google, Me a, Mic oso
and OpenAI. These companies ypically p e e
ade sec e s p o ec ion o e o he IP igh s o
hei LLMs, co e ing algo i hms, aining da a,
da a se s and in as uc u e as p op ie a y. This
app oach helps hem p ese e hei compe i i e
ad an age wi hou disclosing he speci ics o
hei models o he public o o compe i o s.
When equi ed, hey only disclose minimal
de ails abou he model a chi ec u e, aining
da a and decision-making p ocesses.
The sec ecy su ounding he de elopmen o LLMs
leads o opaci y in hei ope a ion, signi ican ly
obs uc ing e o s o sc u inize hese sys ems
o biases, e o s o e hical issues. I becomes
challenging o ensu e he sa e y o he da a used
in aining o o iden i y inhe en un ai biases
wi hin he models. As a esul , he public is le
wi h no choice bu o us companies’ assu ances,
despi e he ac ha e en he de elope s
hemsel es may lack comple e insigh s in o how
hei models unc ion. While hey may unde s and
he models’ basic a chi ec u e, he complex
beha iou s ha eme ge om hese models a e
o en beyond clea explana ion (Ramlochan 2023).
This is no a new challenge; i has deep oo s
wi hin he ech indus y. Fo ins ance, a 2021
in e nal memo om Facebook al eady highligh ed
enginee s’ conce ns abou hei limi ed
unde s anding and con ol o e hei sys ems
(Zubo 2022): “We do no ha e an adequa e le el
o con ol and explainabili y o e how ou sys ems
use da a, and hus we can’ con iden ly make
con olled policy changes o ex e nal commi men s
such as ‘we will no use X da a o Y pu pose.’
And ye , his is exac ly wha egula o s expec
us o do, inc easing ou isk o mis akes and
mis ep esen a ion” (Facebook Ad and Business
P oduc Team 2021, 1; quo ed in Zubo 2022).
The eme gence o LLMs such as GPT-4,40 which a e
buil on massi e da a se s, has only in ensi ied
his p oblem. Addi ionally, companies de eloping
LLMs o en e use o disclose he sou ces o hei
aining da a, adding ano he laye o complexi y.
40 GPT-4 inco po a es billions o ex en ies and ope a es wi h millions o
pa ame e s(G i i h2023).
Gi en he high inancial s akes, hey a ou ade
sec e s-p o ec ed, closed-sou ce sys ems. Howe e ,
he anspa ency o e ed by open-sou ce p ojec s
no only enables he iden i ica ion and esolu ion
o ulne abili ies bu also enhances he sys ems’
quali y h ough collabo a i e e o s wi hin he
communi y (K eps 2024). A leaked in e nal Google
documen om May 2023 unde sco es his s a egy,
cau ioning, “Keeping ou echnology sec e was
always a enuous p oposi ion” (Dickson 2023).
This scale and complexi y o he models complica e
no only he ask o managing and o e seeing bu
also unde s anding hese ad anced AI sys ems.
Shielding AI sys ems — whe he i is an algo i hm
o aining da a — as ade sec e s ends o o e ly
p io i ize comme cial in e es s, he eby c ea ing
ba ie s o due p ocess. When algo i hms o da a
se s a e p o ec ed as ade sec e s, he e is an
inc eased isk ha hey migh ein o ce exis ing
biases and inequali ies, leading o he eme gence
o a “ echno-social di ide.” This di ide essen ially
c ea es a ba ie o accessing in o ma ion, wi h
p o ound implica ions o p i acy, democ acy,
human igh s, compe i ion and social jus ice. I
calls o con inued e o s, comp ehensi e s a egies
and mo e igo ous legal amewo ks o ensu e ha
he deploymen o AI sys ems does no comp omise
anspa ency, accoun abili y o due p ocess.
Fo be e da a go e nance, i is c ucial o
acknowledge and add ess he con lic be ween
anspa ency, due p ocess and ade sec e s.
Regula o s and lawmake s mus be awa e o
his inhe en ension and incompa ibili y om
he beginning. As hey seek o balance he
p o ec ion o ade sec e s wi h he igh o
in o ma ion access, he ocus should be on he
public’s igh o know. This pe spec i e is key o
ensu ing anspa ency and accoun abili y, hus
keeping public in e es a he co e o discussions
abou he go e nance o AI echnologies.
17In o Uncha ed Wa e s: T ade Sec e s Law in he AI E a
Public In e es Excep ions
o T ade Sec e s
Finding he Righ Fo um
IP p o ec ion has always been conside ed a o m
o public policy, wi h a balancing ac be ween
igh s holde s and he public in e es a i s
co e. Howe e , he powe dynamic inhe en
in he abili y o own and con ol echnological
inno a ions has o en led o IP se ing as a
ool o powe and, when cap u ed, a means o
u he consolida ing i (Sell 2004). Today’s IP
s anda ds, including ade sec e s p o ec ions,
ha e been la gely shaped by he ela i ely small
g oup o IP-in ensi e indus ies. These indus ies
we e able o ecognize he alue o IPRs ea ly,
shaping he laws in hei bes in e es (Fia 2022).
S a ing in he 1980s, US laws began o iew IP
p o ec ion mo e as a sys em o p o ec ion and
exclusion a he han as a public policy ins umen
o encou age compe i ion and di usion. Global
capi alism led by he Uni ed S a es exe ed
new p essu e on he domes ic landscape o
IP p o ec ion (Sell 2004). The Sup eme Cou ’s
ecogni ion o ade sec e s as p ope y igh s in
1984 and he pos -Monsan o mo emen owa d
s eng hening and b oadening ade sec e s
should be iewed in his b oade con ex .
T ade sec e s p o ec ion has his o ically been
closely in e wined wi h compe i i e and
inno a i e p og ess, whe e he go e nmen
has played a ela i ely modes ole. Howe e ,
he eme gence o new echnologies has
ampli ied he need o obus sa egua ds in
a eas such as educa ion, public heal h, ci il
igh s, p i acy, en i onmen al p o ec ion
and wo ke igh s. The e ol ing echnology
landscape calls o g ea e go e nmen
in ol emen and enhanced public o e sigh .
The cu en landscape is ma ked by ex ensi e
p ope y igh s and economic concen a ion
in key indus ies, including echnology. T ade
sec e p o ec ions ha we e once conside ed
p i ileges ha e inc easingly o e shadowed he
public policy obliga ions o he companies. As
a esul , he legal amewo k o ade sec e s
o en alls sho o deli e ing bene i s o he
public and p o ec ing he public in e es . This
shi in pe spec i e e lec s a b oade end in
IP law, highligh ing he need o e-e alua ing
and po en ially ecalib a ing he balance
be ween p i a e in e es s and he public good.
The concep o a public in e es excep ion wi hin
ade sec e s p o ec ion emains unde de eloped
and inadequa ely explo ed. While b ie ly
men ioned in he commen a y o he UTSA and
he Res a emen (Thi d) o Un ai Compe i ion,
hese e e ences lack de ailed explana ion
(Sandeen and Mylly 2021). Case law in his a ea
is o en con using, wi h cou s siding wi h
companies and g an ing ex ensi e p o ec ion o
ade sec e s (Le ine 2011). This aises a c ucial
ques ion: How can a clea and e ec i e public
in e es excep ion o access and disclosu e be
in eg a ed in o ade sec e s law and p ac ice?
Looking a in e na ional law, key legal amewo ks
such as he Pa is Con en ion and TRIPS do
no explici ly add ess he excep ions o ade
sec e s. While he in e na ional IP egime may
no di ec ly p o ide he answe s we seek, i does
o e he lexibili y and policy space necessa y o
inco po a ing public policy conside a ions in o
he e ol ing landscape o ade sec e s p o ec ion.
The policy space is c ucial o aligning ade
sec e s p o ec ion wi h b oade socie al needs.
Howe e , he eme gence o ade sec e s
p o ec ion o e sou ce code and algo i hms in
ecen ee ade ag eemen s aises signi ican
conce ns. Since he conclusion o he T ans-Paci ic
Pa ne ship Ag eemen in 2015, he e has been
a no able end in inco po a ing ade sec e s
p o ec ion wi hin he e-comme ce chap e s o
ade ag eemen s. These p o isions ex end beyond
TRIPS, es ablishing exclusi i ies o e sou ce code
and algo i hms wi h only minimal excep ions.
As echnology ad ances, ade nego ia o s ha e
s a ed o ecognize he limi a ions o hese
excep ions. Consequen ly, each subsequen ade
ag eemen a emp s o e ine and make hese
excep ions applicable o he cu en s a e o
echnology. Ye as echnology con inuously e ol es,
hese e o s consis en ly all sho . Fo ins ance,
limi ed excep ions in oduced in he Uni ed S a es-
Mexico-Canada Ag eemen in 2018 a e al eady
ou da ed by he apid ad ancemen s in gene a i e
AI and LLMs. This si ua ion is eminiscen o he
classic ale o he o oise ying o ca ch up o
he ha e, whe e ade nego ia o s ( he o oise)
consis en ly lag behind he echnology ( he ha e).
18 CIGI Pape s No. 295 — May 2024 • Bu cu Kilic
The inclusion o ex ensi e ade sec e s p o ec ion
in ade ag eemen s me i s a de ailed sepa a e
e iew. Fo his discussion, i is impo an o no e
ha ade ag eemen s a e no sui able o ums o
in oducing public in e es excep ions o add ess
he g owing challenges o ex ensi e ade sec e s
p o ec ion. Ins ead, ade nego ia o s should
be guided by domes ic policies, inco po a ing
excep ions es ablished in na ional laws a he
han dic a ing hese s anda ds in e na ionally.
Domes ic Pa hways o
T ade Sec e Excep ions
Gi en he cu en end owa d ecognizing ade
sec e s law as a o m o IP, i logically ollows ha
ade sec e s should also encompass excep ions
and limi a ions simila o hose ound in o he
IP domains. De eloping hese excep ions is
essen ial o ensu ing ha ade sec e s law
balances he p o ec ion o comme cial in e es s
wi h he p o ec ion o b oade public in e es ,
pa icula ly in con ex s in ol ing anspa ency,
accoun abili y and access o in o ma ion.
Tu ning o US law, he challenge appea s no o
be a lack o amilia i y among cou s conside ing
public in e es in ade sec e cases. Ins ead,
he challenge lies in he absence o a s uc u ed
amewo k o de ined pa ame e s wi hin US
law ha explici ly ou line he public in e es
conside a ions ha should be ac o ed in o ade
sec e li iga ion. US law lacks a de ined lis o
speci ic (al hough no necessa ily exclusi e) public
in e es issues ha should be aken in o accoun
du ing ade sec e li iga ion. The lis may include
conce ns such as ee speech and eedom o
he p ess, ee compe i ion, employee mobili y,
egula o y o e sigh , he igh s o collec i e
o ganiza ions such as unions, and pe sonal
p i acy in e es s (Sandeen and Mylly 2021).
Fo ins ance, he Eu opean T ade Sec e s Di ec i e,41
enac ed in 2016 and implemen ed in o he laws o
EU membe s a es by 2018, p esen s a somewha
41 Di ec i e (EU) 2016/943 o he Eu opean Pa liamen and o he Council
o 8 June 2016 on he p o ec ion o undisclosed know-how and business
in o ma ion ( ade sec e s) agains hei unlaw ul acquisi ion, use and
disclosu e, [2016] OJ, L 157/1.
balanced app oach o ade sec e s p o ec ion.
Unlike unde US law, he di ec i e does no
es ablish such an exclusi e p ope y igh o e
ade sec e s. The eci al o he di ec i e explici ly
s a es ha i does no c ea e any exclusi e igh .42
The di ec i e’s s ance on ade sec e s is somewha
ambi alen . I does no de ine ade sec e s as
ei he IP igh s o as pa o un ai compe i ion law,
al hough i ends mo e owa d he la e (Aplin
2021). I is impo an o no e ha when he di ec i e
was in oduced, he main lobbying indus ies
we e pha maceu icals and chemicals (EDRi
2015), sugges ing ha conside a ions o he da a
economy o AI we e no cen al o i s o mula ion.
Howe e , i s echnology-neu al egime, which
p o ec s a wide a ay o know-how and business
in o ma ion, makes i a signi ican legal ool
o oday’s da a and AI economy (Fia 2022).
Ra he han adop ing an app oach o b oad
igh s wi h na ow excep ions, he di ec i e
seeks o es ablish a ai balance be ween igh s
and in e es s. I p o ides o excep ions o
p o ec ion, placing he bu den on he de endan
o success ully es ablish hese excep ions (ibid.).
A icle 5 o he di ec i e lis s hese excep ions,
aiming o balance he igh s and in e es s
o non-owne s, such as small companies,
consume s, esea che s, jou nalis s, public
au ho i ies and non-p o i o ganiza ions. These
excep ions include he igh o eedom o
exp ession and in o ma ion; gene al public
in e es in e ealing misconduc , w ongdoing
and illegal ac i i y; disclosu e by wo ke s and
hei ep esen a i es; and p o ec ion o legi ima e
in e es s ecognized by EU o na ional law.
The in e p e a ion o a icle 5 con inues o be
ambiguous. Howe e , some sugges ha wi hin
he amewo k o he Gene al Da a P o ec ion
Regula ion (GDPR), he da a subjec ’s igh o
be in o med migh all wi hin he scope o his
excep ion o ade sec e s. As a esul , he igh
o explana ion canno be denied on he g ounds
o sa egua ding ade sec e s (Mylly 2023).
Likewise, i a di ec link be ween he pe sonal
da a and he algo i hm can be es ablished,
he GDPR’s anspa ency equi emen s could
po en ially supe sede he ade sec e claims o
he companies (Foss-Solb ekk and Glens e 2022).
42 Ibid, eci al 16 (“In he in e es o inno a ion and o os e compe i ion,
he p o isions o his Di ec i e should no c ea e any exclusi e igh o
know-how o in o ma ion p o ec ed as ade sec e s”).
67 E b S ee Wes
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