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Observations On Licensing: Does ?Design Around? Have a Place in Trade-Secret Licensing?

By Neil Wilkof, Herzog, Fox & Neeman, Tel-Aviv, Israel (hfn@hfn.co.il). Mr. Wilkof writes regularly on licensing issues. See the quality value added content you get with BNA International World Intellectual Property Report Daily

We all know that while patents and trade secrets may both potentially cover similar subject matters, the rights and obligations afforded by each are fundamentally different. From my experience, however, the differences between the two sets of rights are not always fully appreciated in practice. A particularly interesting example is the differing function of ?design around? in patents and trade secrets, respectively. Patent law and practice has carved out a central place for the ability of persons to design around existing patents, based on disclosure and publication of patented inventions. On the one hand, the publication of patents serves to prevent the duplication of inventions by setting a rough boundary within which competing inventions tread at their own legal peril. On the other hand, the publication of patents enables competitors to design around the protected invention, adding to the reservoir of disclosed inventions that will ultimately become part of the public domain. Ideally, therefore, the ability to design around contributes to both the quality and quantity of patents. Licensing may have a role in this process. A licensee might not only make direct use of the licensed patent, but might also take advantage of the knowledge and experience gained through the license to design around the patent. If this occurs, however, there is nothing in principle that prevents the licensee from seeking to design around the licensed patent, just as third parties may do so, assuming that in doing so the licensee is not in breach of some contractual or other obligation.

Full post as published by The Trade Secrets Vault on January 07, 2008 (boomark / email).