United States: Keeping Trade Secrets Out Of Patents

Trade secret and patent laws both provide intellectual property protection but have conflicting requirements that can impose challenges for a company seeking to maximize its protection under each right.

Consider this typical scenario:

An inventor has developed a reduced footprint circuit design and a method of operating the circuit that reduces power consumption compared to similar products in the market. The inventor's company would like to file a patent application on the invention so the inventor provides diagrams and documentation detailing the invention.

As part of the supporting documentation, the inventor also provides confidential detailed assembly diagrams and flow charts for the current process of manufacturing the circuit design. The company's current manufacturing process has proven over the years to not only eliminate quality issues, but also to be much less costly and time consuming than the previous manufacturing process. There are significant advantages provided by the current manufacturing process, but it is not immediately clear whether it contributes to the reduced footprint circuit design or the method of operation to be patented.

Can the company write a comprehensive patent application that complies with the patent law while keeping the manufacturing process a trade secret?

Trade secret and patent laws both provide intellectual property protection but have conflicting requirements that can impose challenges for a company seeking to maximize its protection under each right. Trade secret law requires a company to keep information secret and out of the public domain to maintain trade secret protection of that information. On the other hand, patent law requires publication of information to obtain patent protection. Losing trade secret protection by disclosing confidential information in a patent application can be a fatal pitfall of patent drafting. However, a company can maintain confidential information as a trade secret when it is not required for the desired scope of patent protection by a company. In-house counsel and outside counsel preparing patent applications should work closely together to evaluate an invention and related product information to determine what information to disclose.

During the patent drafting stage, outside counsel typically extracts invention implementation details from inventors for inclusion in patent applications. There are many reasons that make it desirable to include as much invention and related product details in a patent application as possible.

First, patent law requires that an application include sufficient information to enable one of ordinary skill in the art to make and use a claimed invention without undue experimentation, referred to as the enablement requirement. Failure to comply with the enablement requirement can invalidate a patent. In addition, the application must demonstrate that the applicant had possession of the claimed subject matter at the time of filing.

Patent law also requires disclosure of the best mode of carrying out the invention contemplated by the inventor. Best mode is a separate and distinct requirement from enablement. The America Invents Act (AIA) of September 16, 2011 changed the best mode requirement. While the AIA formally retained the best mode requirement, it removed unenforceability or invalidation of patent claims as a recourse for failure to disclose the best mode. The removal of the enforcement provisions, however, does not necessarily mean that applicants should include fewer details about practicing an invention in a patent application. Notably, even if a patent cannot be invalidated for failure to comply with the best mode requirement per se, the AIA does not prevent an accused infringer from arguing the equitable doctrine of unclean hands as a defense to patent infringement. In particular, the unclean hands doctrine has historically been used to bar issuance of an injunction. Describing a variety of embodiments in an application can be beneficial not only to satisfy the disclosure requirements but also because an applicant may desire to change certain claims substantially over the course of prosecution with the Patent Office. Occasionally, these changes are to the point where certain invention features that were not initially considered to be important, have become important to claim in a patent application. The ability to make such changes is hampered if those details were not originally described in the patent application. In addition, an applicant may later wish to draft claims directed to its or a competitor's subsequently developed products. With the benefit of hindsight, the applicant may have desired to describe features of such subsequently developed products so that they could be later claimed.

Given the above hypothetical as an example, if the details of the manufacturing process are not pertinent to what will be claimed in the patent application, those details can be left out of the patent application to be maintained as a trade secret. As a guideline (subject to exceptions), details related to the product that may appear in a datasheet or are readily discernable through inspection, testing, and reverse engineering may not be well suited for trade secret protection. Therefore, those details may be considered for inclusion in the patent application to comply with the enablement, written description, or best mode requirements. Such details may also serve as a basis for claims in the prosecution of the patent application or continuation applications.

Indeed, inventors that are focused on their company's product implementation often provide detailed product or manufacturing documentation. Outside counsel, seeking to obtain a strong patent, may be motivated to include such details as a basis to claim such subject matter, but may be unaware of a company's desire to maintain such information as a trade secret. Keeping the above in mind, it is important to think through whether material should be disclosed in a patent application or maintained as a trade secret. Often times, inventors may not have the knowledge or experience to help make such a determination. It is important to tap in to in-house counsel's access to the company's product development and intellectual property strategies to ensure that trade secrets are not inadvertently disclosed in patent applications. In-house and outside counsel should endeavor to work together to ensure that certain information is not disclosed when not necessary for desired patent coverage—in order to continue to maintain trade secret protection for such information.

By Christopher Jordan and Daniel Ovanezian

Christopher Jordan is an Assistant General Counsel, IP at Cypress Semiconductor Corporation.

Reprinted with permission from the October 20, 2017 edition of Corporate Counsel. © 2017 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited.

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.

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