United States: Fracking Fluid Dynamics: New Trade Secrets Movements

Last Updated: November 18 2016
Article by   Orrick

It is no secret that America's energy industry depends upon the trade secret status of its products, techniques, and procedures for much of its continued success. As oil prices remain volatile, trade secret and intellectual property protection continues to be a key component of ensuring profitability. But the law in this area may be evolving quicker than industry insiders would like.

In Pennsylvania, thanks to a recently decided case, it now may be more difficult for some energy companies to protect the trade secret status of some of their most valuable information. In Robinson Township v. Commonwealth, ___ A.3d ___, J-34A-B-2016 (Pa. 2016), the Pennsylvania Supreme Court struck down several remaining provisions of the state's controversial P.L. 87 legislation (better known as "Act 13"), holding them to be unconstitutional. Act 13 was the Pennsylvania General Assembly's short-lived and controversial attempt in 2012 to provide uniform laws and regulations governing oil and gas development in the Commonwealth.

The court in Robinson invalidated several provisions of Act 13 that allowed oil and gas companies to use eminent domain laws, exempted the private water supply for 3 million Pennsylvanians from required notification of oil spills, and prevented medical professionals from disclosing the chemical composition of hydraulic fracturing fluids that came in contact with patients. The latter provisions worked as a bulwark to protect the trade secret status of private oil and gas companies' proprietary fracturing fluid formulas.

Before Robinson, section 3222.1 of Act 13 allowed hydraulically fractured well service providers, vendors, or operators to avoid the legally mandatory disclosure of chemicals used in the operation of wells under the justification that the chemical compositions were "trade secret[s] or confidential proprietary information." Act 13 also required that, in order for health care professionals to obtain this information as part of the routine treatment of a patient, they must first execute a confidentiality agreement and a written statement that the information is needed for the purpose of medical diagnosis and treatment.

In Robinson, medical professionals argued that the difficulty and lack of access granted to doctors to fracturing fluid chemical composition information "will have a deleterious effect of hindering the long-term development of health policies and protocols to quickly identify illness, which would protect natural gas industry workers and members of communities in which drilling occurs." In opposition, proponents of the oil and gas industry argued that the protection of fracturing fluid trade secrets was necessary for the economic success and competitive advantages that individual oil and gas companies seek over one another. Ultimately, the court held that this section violated Article II, Section 32 of the Pennsylvania Constitution by granting "special treatment" to the oil and gas industry.

At least one news source has described the developments surrounding this case as "earth shattering."

But the question now stands, as one law school professor writes, "What happens to a physician now who wants trade secret information? He doesn't have to sign a waiver but does he have a right to anything?" At least one expert involved believes this issue is merely "illusory," while doctors elsewhere remain concerned. At present, the law in this area is anything but settled or uniform.

Previous Trade Secrets Watch posts have detailed the rapid advancements that have been made in the field of trade secret protection offered to oil and gas companies. In line with trends, Pennsylvania's offered protection of oil and gas companies' trade secrets appears to be in flux, as evidenced by Act 13's passage and much of its rapid demise with Robinson.

At the national level, the story is consistent with Pennsylvania's—in the sense that the law and its direction remains variable. The rules and regulations concerning trade secret disclosure and fracking in general vary widely from state to state. While Pennsylvania, in Act 13, provided for trade secret disclosure under certain circumstances, the Montana Oil and Gas Conservation Board recently rejected a petition that would require either disclosure of the chemical composition or a justification for withholding the information. On the other hand, Maryland will formally propose the "country's strictest regulations on hydraulic fracturing yet" in mid-November, including mandatory disclosure of the chemicals drillers use. In Virginia, the gas industry is fighting to delay implementation of new regulations to protect information about the chemicals used in hydraulic fracturing.

As states continue to adopt varying regulations, lawmakers, nonprofits, and other organizations continue to push for the passage of uniform hydraulic fracturing fluid composition disclosure statutes.

The effort to enact uniform regulations calls into question which level of government should adopt these regulations. Much of the action involving trade secret disclosure is happening at state and federal levels, but some sub-state entities are creating policies that influence the relevance of trade secret protection in their jurisdictions. Miami-Dade County in Florida, for example, has enacted a ban on fracking, in part due to the lack of disclosure required by the state. Also, in Wrightstown, Pennsylvania, the local Planning Commission considered, but declined to vote on, an ordinance that would allow fracking but set strict limits.

The waters remain murky for trade secret protection of portions of the energy industry. Trade secrets cases are being filed and decided at both state and federal levels, with many different statutory and regulatory schemes created at the federal, state, and local levels and bases of common law driving the area. Recent developments in Pennsylvania and beyond do not seem to offer any hope of a simpler, uniform solution balancing opposing sides' desires for disclosure and confidentiality of proprietary information in the near future.

Twitter: @TS_Watch

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.