Home -> Law Blog Directory -> Intellectual Property Law Blogs -> The Trade Secrets Vault

Intellectual Property Law

: The Trade Secrets Vault

THE IP CONUNDRUM: PROTECT YOUR ASSETS WITH THE PATENT ACT OR THE TRADE SECRETS ACT?

The Recorder, Vol. 132, No. 147, July 30, 2008 Chris Scott Graham and Jill Kopeikin Many companies operate under the assumption that a robust patent portfolio is the sine qua non to the best protection of intellectual property. Consistent with this philosophy, employees are instructed to compile the information necessary to apply for patent protection, and significant company resources are expended in that pursuit. By applying early and often to patent both key developments as well as incremental attributes, companies implement a de facto IP strategy heavily weighted toward patent protection. Recent developments in patent law, however, suggest that this kind of IP strategy may not be in the best interests of all companies. And even companies with established patent programs would be well-served by re-evaluating how they're managing their most valuable assets. DOWNSIDE RISK An aggressive patent holder can use his or her portfolio to exclude competitors from a market through proceedings before the International Trade Commission or to obtain damages in district court. A well-publicized patent portfolio can also be an effective deterrent, announcing barriers to market entry a competitor must consider. However, seeking patent protection as an IP strategy comes with downside risk. A company implementing a patent strategy to protect its IP is disclosing its cutting-edge technology to the public. And obtaining a patent, by the nature of the proceedings before the U.S. Patent and Trademark Office, is fundamentally inconsistent with the protections under the Uniform Trade Secrets Act. To obtain a patent, the applicant must place in the public domain information that may constitute valuable trade secrets, including a written description of the invention that is specific enough to enable a person of ordinary skill in the art to practice the invention without undue experimentation. The description must also disclose the best mode contemplated by the inventor for practicing the invention. Through this process, information that might otherwise constitute a trade secret under the UTSA will be made public under most circumstances within 18 months of the application being filed -- whether or not a patent ever issues on the application. Should the USPTO reject the application, all of this information becomes freely available to the public, and cannot thereafter constitute a trade secret. Even when the application successfully matures into an issued patent, a company must consider obtaining foreign counterpart patents in those countries where the company expects to compete. Attacks on the process of obtaining and enforcing patents have recently increased. The USPTO, under pressure to step up its productivity, has attempted to promulgate rules to place more hurdles and limits on the application process. The courts also have been more active recently in limiting the rights of patent holders. From making the issuance of permanent injunctive relief less certain, especially for plaintiffs who do not manufacture or use the patented invention, to increasing the rights of licensors to challenge the validity of patents, the U.S. Supreme Court has been increasingly willing to weigh in on patent issues.

Full post as published by The Trade Secrets Vault on August 06, 2008 (boomark / email).