Therefore, the Commission respectfully but strongly urges your Subcommittee to maintain the confidentiality of the information submitted in response to your request and in particular, the reserve estimates furnished in response to Question 5 of the Natural Gas Energy Study Order. (Id., Exhibit D).

Ashland was advised of the Commission's decision on November 18, 1975. On November 21, 1975, plaintiff received written notice of the Commission's intention to disclose its reserve data to Congressman Moss's Subcommittee (Id., Exhibit E). On the same day, Ashland was informed by telephone that the Commission intended to turn over the data to Congressman Moss on demand and would not be bound to the November 28th date mentioned in Chairman Engman's letter.

This action was filed on November 24, 1975, and on that date, plaintiff moved for and was granted a temporary restraining order enjoining the Federal Trade Commission from releasing the information in issue, thereby preserving the status quo until the Court considered the merits of Ashland's claims.4

On December 2, 1975, the Subcommittee authorized and the Chairman of the Interstate and Foreign Commerce Committee signed a subpoena duces tecum requiring FTC Chairman Engman to appear before the Subcommittee on December 3, 1975, and to bring with him any and all records within the Federal Trade Commission's control or custody or within the Federal Trade Commission's means to produce appertaining to or involving oil and/or gas lease extensions on Federal lands, including Ashland Oil, Inc. and including all correspondence between the Federal Trade Commission and Ashland Oil, Inc. relating in any manner to agreements or proposed agreements to hold such records confidential or to give advance notice of the release thereof. (See H.R.Rep.No.94-756, 94th Cong., 1st Sess., at 3–4 (1975)).

By letter of December 3, 1975, Chairman Moss informed Mr. Engman that the Subcommittee planned "no enforcement action of this subpoena until after the Court has considered" the questions arising in this case. (Id., at 5).

On December 18, 1975, the House of Representatives assented to House Resolution No. 899. (121 Cong.Rec. 12, 918-919 (daily ed. December 18, 1975)). Section 1 of the Resolution provides:

Resolved That the chairman of the Subcommittee on Oversight and Investigations of the Committee on Interstate and Foreign Commerce is authorized to intervene and appear in the pending action entitled "Ashland Oil Incorporated, plaintiff against Federal Trade Commission, et al., defendant," Civil Action 75-1956, United States District Court for the District of Columbia on behalf of the Committee on Interstate and Foreign Commerce in order to secure information relating to natural gas reserves now in the possession of the

• By stipulation among the parties, the Temporary Restraining Order remained in effect until February 3, 1976.

Federal Trade Commission for the use of the committee and the House. (Emphasis supplied.)

On January 16, 1976, after a hearing held in open court, we granted Congressman Moss's motion to intervene pursuant to Fed.R.Civ.P. 24(a).

Plaintiff has moved for preliminary and permanent injunction. Defendants Moss and FTC have filed motions for [302] summary judgment or, alternatively, to dismiss. The Court, sua sponte, advanced and consolidated the hearing on the merits of Ashland's complaint with that on its motion for preliminary injunction. See Fed.R.Civ.P. 65(a)(2).

C. Section 6(f) of the Federal Trade Commission Act

The principal arguments on the merits of this case focus on Section 6(f) of the FTC Act, 15 U.S.C. § 46(f), which empowers the Commission To make public from time to time such portions of the information obtained by it hereunder, except trade secrets and names of customers, as it shall deem expedient in the public interest; and to make annual and special reports to the Congress and to submit therewith the recommendations for additional legislation; and to provide for the publication of its reports and decisions in such form and manner as may be best adapted for public information and use. (Emphasis supplied.)

Ashland maintains that the language employed is unequivocal in prohibiting disclosure of trade secrets by the FTC to any third party, including the Congress; that this construction is buttressed by the legislative history of the Act, by the wording and judicial interpretation of similar statutory provisions, and finally by the "historical position" of the Attorney's General's Office from 1909 to the present that such language ordinarily indicates an absolute prohibition against executive disclosures of proprietary data to the legislative branch, absent adequate assurances that confidentiality will be maintained. In addition to specifically invoking confidentiality protection in submission of its reserve estimates to the FTC, Ashland states that it relied upon the belief that the Commission would abide by the mandate of Section 6(f), as well as the FTC's own rules, and refrain from divulging the materials in issue to Congress. Even if the FTC's disclosure to Congress is held pursuant to a lawful subpoena, plaintiff believes that the ultimate result will be a serious infringement of its common law and statutory rights, and a violation of its constitutional guarantees of equal protection, due process and freedom to petition the government.

Congressman Moss and the FTC respond that Section 6(f) clearly does not restrict Congressional access to trade secrets or other types of information collected by the FTC, since such a limitation upon the inherent investigatory power of Congress may not be imposed by

implication. The pertinent language of the Section-"to make public"-does not explicitly refer to Congress, and, thus, according to defendants' argument, cannot be read as an inhibition of Congress' statutory right to "annual and special reports" or its Article I subpoena power. Also relying on legislative history, defendants Moss and FTC conclude that the Commission was intended to be no more than an extension of the Congressional "visitorial power," at least in its information gathering function, and, therefore, a convenient storehouse of information readily accessible to the Congress.

In addition, defendants contend that the Subcommittee's subpoena and the underlying investigation of the natural gas industry are legitimate exercises of the powers conferred upon the Congress under Article I; and that once such constitutional powers have been legitimately invoked by a coordinate branch, the courts are bound to accord great deference and refrain from unwarranted interferences with on-going Congressional investigations. Defendants attempt to dispose of Ashland's remaining arguments in short order, contending that once a legitimate legislative purpose has been established, "Ashland's constitutional, statutory, and equitable arguments must fall before the legitimate assertion of the constitutional power of the Congress." (Intervenor's Memorandum in Support of Motion to Dismiss, p. 14).

II. ASHLAND'S NATURAL GAS RESERVE ESTIMATES

Since plaintiff endeavors to invoke common law and statutory protection for its reserve estimates, the Court must make a threshold determination whether such materials fall within the "widely reliedupon definition of a trade secret, found at 4 Restatement of Torts § 757, comment b (1939),"5 viz.:

A trade secret may consist of any formula, pattern, device or compilation of information which is used in one's business, and which give him an opportunity to obtain an advantage over competitors, who do not know or use it. . . . 4 Restatement of Torts § 757, p. 5 (1939).

According to the Restatement, a more precise definition of what constitutes a trade secret is not possible. However, Comment b does enumerate a number of factors which may assist a court in determining whether particular data rises to the level of a trade secret: (1) the extent to which the information is known outside of his business; (2) the extent to which it is known by employees and others involved in his business; (3) the extent of measures taken by him to guard the secrecy of the information; (4) the value of the information to him and to his competitors; (5) the amount of effort or money expended

See Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 474-75, 94 S.Ct. 1879, 1883, 40 L.Ed.2d 315 (1974).

by him in developing the information; (6) the ease or difficulty with which the information could be properly acquired or duplicated by others. 4 Restatement of Torts & 757, Comment b, p. 6 (1939).6

On the record before the Court, it is evident that Ashland's natural gas reserve estimates satisfy each of these criteria. The data in issue has been compiled at the considerable expense of "hundreds of thousands of man-hours and millions of dollars" and enables plaintiff to successfully bid on federal natural gas leases, in competition with "dozens of other companies." Consequently, such information is "highly valued and closely guarded," not only by Ashland, but throughout the natural gas industry. (See Affidavit of George C. Hardin, Jr., Plaintiff's Memorandum in Support of Motion for Preliminary Injunction).

Moreover, the agency with particular expertise in the regulation of natural gas, the Federal Power Commission ("FPC"), has explicitly recognized natural gas reserve estimates to be valuable, proprietary assets. For example, in Amerada Hess Corporation, 50 F.P.C. 1049, 1050 (1973), the agency observed:

To begin with, it must be recognized that a natural gas company's reserve data, much like a patent or trade secret, constitutes a valuable and closely guarded asset. Making this asset available to competitors, without due compensation, would most certainly be inimical to competition, especially in highly competitive areas, as the comments of Ashland Oil, Inc. illustrate:

*Ashland Oil, Inc. has obtained leases in Federal off-shore areas by payments to the United States Government of large bonuses. Unleased acreage adjoins and offsets certain of these leases. If significant reserves are discovered and if the reserves extend into unleased areas, Ashland would not disclose the results of such exploration until an opportunity is available to bid in a drainage sale of the offsetting acreage. The information developed on such leases is highly confidential and proprietary in nature and disclosure of such information prior to the drainage sale would destroy Ashland's competitive advantage in bidding at such sale by making available to other companies the results of Ashland's exploration efforts made at great expense of it.

[304] Similarly determining such reserve data to constitute "valuable property" in Reliability of Electric and Gas Service, 49 F.P.C. 1428, 1429 (1973), the FPC discussed the underpinnings of its holding as follows:

The policy reasons underlying our assurance of confidentiality are obvious. In a period when the gas supply shortage is most acute, disclosure of detailed reserve data would undoubtedly inhibit future exploration for new gas reserves since speculators and competitors could equally benefit from the geological and geophysical expenditures of other companies. A competitor would particularly benefit from knowledge of another producer's uncommitted reserves for particular locations, expecially in highly competi

• This statement of the applicable test has received judicial approval. See, e. g., Speedry Chemical Products, Inc. v. Carter's Ink Co., 306 F.2d 328, 331 (2d Cir. 1962).

tive areas. In addition, it would be extremely unfair to sellers of gas to disclose such data to potential buyers with whom they negotiate for the sale of gas. Furthermore, we believe that certain reserve data constitutes a valuable property right which should not be taken without due process and just compensation. (Emphasis added).

The federal courts have also acknowledged that detailed competitive information of the type here in issue constitutes trade secrets entitled to protection from public disclosure.

In Abbott v. United States, 239 F.2d 310, 314 (5th Cir. 1956), the Court found the geophysical surveys underlying a company's reserve estimates to be of "almost inestimable practical value in the essential program of continuous exploration and development of mineral resources which is the life blood of an oil producing company." Moreover, once disclosed, such data possesses "a ‘negative' value" in the hands of a competitor who can use it to "undertake development, procure leases, and impede or thwart the company's plans." Accord Hunter v. Shell Oil Co., 198 F.2d 485 (5th Cir. 1952); Ohio Oil Co. v. Sharp, 135 F.2d 303 (10th Cir. 1943); Pratt v. Shell Petroleum Corp., 100 F.2d 833 (10th Cir. 1938). See also John T. Lloyd Laboratories, Inc. v. Lloyd Brothers Pharmacists, Inc., 131 F.2d 703, 707 (6th Cir. 1942); Dollac Corp. v. Margon Corp., 164 F.Supp. 41, 59 (D.N.J.1958), aff'd, 275 F.2d 202 (3d Cir. 1960); Jerrold-Stephens Co. v. Gustaveson, Inc., 138 F.Supp, 11, 15-16 (W.D.Mo.1956); Newell v. O. A. Newton & Son, 104 F.Supp. 162, 165 (D.Del.1952). And in Continental Oil Co. v. FPC, 519 F.2d 31, 32, 35 (5th Cir. 1975), the Fifth Circuit voided an FPC order permitting public access to materials submitted by interstate natural gas companies which contained "detailed intrastate sales information, including the names of purchasers, date and location of the sale, pressure base, annual sales volume and price terms," and data with reference to "extent of supply." The Court held that such information fell squarely within the Freedom of Information Act's "trade secret" exemption from public disclosure, reasoning that disclosure "would alter industry custom and existing relationships to the disadvantage of petitioner's competitive positions." 519 F.2d at 35.

[1] After careful evaluation of the Hardin Affidavit, supra, with due deference to the findings of the National Geological Survey, and in consideration of the cases discussed supra, the Court is of the opinion that at least that portion of the data in issue detailing Ashland's natural gas reserve estimates constitutes "trade secret" information within the purview of Section 6(f) of the FTC Act.

III. THE SUBCOMMITTEE SUBPOENA

[2] While the investigatory power of Congress is not explicitly mentioned in the Constitution, the courts have long held the power to