Trade Secret and Patent Protection are Mutually Exclusive

by Mike Mintz on December 6, 2011 · 1 comment

in martindale.com

It is common knowledge that when companies are involved in the invention of new technology, they often risk losing their trade secrets when an essential employee leaves the company.  However, they also risk losing trade secrets whenever they provide such details in a patent application.

In Atlantic Research Marketing Systems Inc. v. Troy, plaintiff employed defendant as a member of the team, which was making and marketing a rifle handguard.  The handguard was unique due to its attachment to the gun barrel at a single location – that is, the barrel nut.  Having learned all of Atlantic’s trade secrets regarding the handguard, defendant left the company to manufacture a similar and competing product.  As a result, Atlantic sued Troy for patent infringement and for using its trade secrets.

Atlantic alleged that the written specification section of its patent application indicated that the handguard would attach only to the barrel nut.   However, the patent specification read “additional support may be provided” by a yoke around the barrel nut of the weapon.  The court found that the specification did not disclose that the handguard would only be attached to the barrel nut, and therefore found that the patent claim was invalid for lack of a written description.

More notably, the court found that Atlantic’s claim that the barrel nut-only design was a trade secret further proved the fact that the design was not disclosed in its patent application.  If Atlantic had indicated the design in the written specification section of its patent application, the design information would be available to the public and therefore no longer a trade secret.  Accordingly, the court held that Atlantic could  “not ‘have it both ways’ by reaching back and relying on the disclosure in [his] patent to claim an invention he was purposely shielding from the public.”

“Therefore, trade secret and patent protection are mutually exclusive.  Full public disclosure is the basis of the patent system, while scrupulous secrecy is, by definition, essential to asserting a trade secret. If you’ve taken the trouble to protect a product or method as a trade secret, don’t expect a court to view it as patent-protected. “  — Sunstein, Kann, Murphy, & Timbers: Sure as Shootin’, If It’s Claimed in Your Patent, You Can’t Assert It as a Trade Secret

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