Intro to IP
Tuesday, March 03, 2009
2. Trade Secret Protect
· Elements to a Trade Secret Claim
1. Subject matter involved must qualify for ‘trade secret protection’
a. As long as the information is capable of adding economic value to the plaintiff it can be protected as a trade secret
b. It must not be generally known
2. Holder of trade secret took ‘reasonable precautions’ to prevent its disclosure
3. Plaintiff must prove defendant acquired the information wrongfully
a. D’s use is often ‘wrongful’ due to a duty not to disclose
i. Implicit Duty; all employees are under an implied duty to their employers
ii. Explicit Duty; Form of a contract
· Theories on Trade Secrets
· Protecting against the theft of information encourages the investment into the information
· Punish and prevent illicit behavior
Metallurgical Ind. v. Fourtek, Inc.
· (P developed improvements to make furnace thing more efficient)
· The fact that the scientific principles involved are known doesn’t refute the claim of a trade secret.
· P keeping information secret is often evidence that it’s a TS
· Subjective belief of a secret’s existence suggests a secret exists
· The law doesn’t require absolute secrecy
· Disclosures to further your own economic interests is permissible
· Though defending discussions with business associates would be stronger with a non-disclosure agreement
· A trade secret can be no more than a mechanical improvement that a good mechanic can make. All equitable considerations factor in granting trade secret protection.
Rohn & Haas Co. v. Adco Chemical Co.
· Even if a trade secret is legally available, a D who misappropriates a trade secret is still liable
· It’s not enough to show that the info is available if you did not in fact get the information through those means
· Plaintiff is allowed to protect information that, though it could have been discovered legally, wasn’t.
· Uniform Trade Secrets Act: Info is not a trade secret if it is generally known or readily ascertainable by proper means.
· And once that info is ascertainable by such, D is free to acquire the info through the proper channels or the plaintiff, doesn’t matter
Rockwell Graphic Systems v. DEV
· Reasonable Efforts Requirement has:
· Evidentiary Purposes
· Plaintiff must show that D obtained the trade secrets through a wrongful act, which it can do by showing that acquiring them otherwise is unlikely.
· Remedial Purposes
· If P’s negligence allowed his secret to fall into the hands of the general public, they don’t deserve a windfall through the suit.
· P who fails to police his secret shows
·He doesn’t value it and he created a situation where an infringer might be unaware it’s actually a secret.
· Only in extreme cases can what is “reasonable” be determinative for summary judgment.
· The more restriction, the more cost and inconvenience. The perfect balancing act for a fact-finder.
· If Trade Secrets are only protected through extravagant means, the incentive to invest in them would be reduced and, along with it, innovation.
· Misappropriation of Trade Secrets
Smith v. Draco Corp.
· Partners in a fiduciary relationship have an obligation not to reveal their trade secrets to other people.
Kadant, Inc. v. Seeley Machine, Inc
· The mere fact that a competitor employed a former-employee during the time they made the ‘independent discovery’ isn’t enough to show that it was misappropriated.
· You have to sow that the former employee had knowledge of a specialized secret or technique that
· If it’s been on sale for over a year prior to filing, it’s unpatentable.
· Unless it’s one sale for experimentation
· If you wanted to experiment, why would you sell it.
· Market-testing doesn’t count
· Requires an immediate, known use. Regardless of commercial viability.
· Small exception to things those usefulness is purely hypothetical or which there is no known use yet.
·Think prescription drugs.
· If all you can show is that the invention belongs to a class of which some members have a use, that’s not enough. (Brenner)
· Patenting something too early, before it’s useful, cuts off resources
· Immoral and deceptive products used to be unpatentable, but not anymore.
· Added to the Patent Act in 1952
· “Merely codified a constitutional requirement”
· Must be sufficiently distinguishable from priot art
· GRAHAM TEST: Would a reasonable person have been able to foresee this thing based on pertinent prior art?
· Putting springs on a plow blade failed this test because springs have already been put in vehicles. John Deer
·But if it was so obvious, why didn’t anyone else think of it!
· Hindsight bias
· TEST: TSM Test
· There must be a suggestion or teaching in the prior art to combine elements shown in the prior art in order to find a patent obvious. (KSR)