Home -> Law Blog Directory -> Academic Blogs -> Jorda on Trade Secrets

Academic

: Jorda on Trade Secrets

Patent/Trade Secret Complementariness ? No. 19

In prior blogs I railed aplenty about the many misconceptions about the patent/trade secret interface and the deep-seated belief that patents and trade secrets are incompatible.

A typical, illustrative and specific sample of such misperceptions comes from “The Trade Secret Handbook — Protecting Your Franchise System’s Competitive Advantage” by Michael Lockerby, American Bar Association, 2000.  In it the following relevant passages appear:

    How Do Trade Secrets Differ from Other Forms of Intellectual Property? (p.11)

    The issuance of a patent obviously destroys trade-secret protection.  However, the franchisor should maintain the confidentiality of any patentable trade secrets while the patent prosecution process is pending.  One reason that this is important is that a patent may never be issued.
    Can Trade-Secret Protection Coexist with Other Forms of Intellectual Property Protection? (p.12)

    There is considerable overlap between the scope of copyright protection and the scope of trade-secret protection.

    In contrast, patent protection is fundamentally inconsistent with trade-secret protection.  The quid pro quo for what is essentially a government-granted monopoly (sic) with respect to the patented invention is full disclosure so that it will be in the public domain upon expiration of the patent.  However, the patent prosecution process does allow for protection of trade secrets until such time as the patent actually issues.

These passages reveal misunderstandings and half-truths at best.  Let me parse these passages to see what is wrong with them.

“Issuance of a patent obviously destroys trade-secret protection.”

This is clearly too broad a statement and a half-truth.  Trade secret protection ceases to exist only for precisely that which is disclosed in the patent specification.  But patent applications are normally filed very early in the research stage, after a first reduction to practice, in order to obtain the earliest possible filing or priority date.  The specification of such an early application typically describes in relatively few pages only rudimentary lab or shop experiments done and samples or prototypes obtained.  Hence, patents rarely disclose the ultimate scaled-up commercial embodiments.  Tons of associated or collateral know-how not found in the specification are needed for commercial production and use of patented technology.

Full post as published by Jorda on Trade Secrets on April 23, 2008 (boomark / email).