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Privilege-Wise and Patent (and Trade Secret)-Foolish?: How the Courts' Misapplication of the Military and State Secrets Privilege Violates the Constitution and Endangers National Security

Davida H. Isaacs Northern Kentucky University - Salmon P. Chase College of Law Robert Michael Farley Patterson School of Diplomacy and International Commerce Berkeley Technology Law Journal, Forthcoming Abstract: It is every inventor's nightmare: a valuable idea, stolen, with no legal recourse. Yet that is precisely what happened in Lucent v. Crater, where the Federal Circuit permitted the Federal Government to defeat the inventors' claims using the military and state secrets privilege. In light of the recent upsurge in the Government's invocation of this privilege, it is time to scrutinize more carefully courts' highly deferential response to its use. There is little question that the executive branch must be able to invoke the privilege in order to ensure that national security is not imperiled by public disclosure of information. But courts too often acquiesce in the complete suppression of that information. Unfortunately, in the context of claims regarding unauthorized military use of inventions, this extreme reaction has the potential to engender several serious problems. First, as demonstrated in Crater, under some circumstances the suppression may disregard inventors' constitutional rights. Where the Government has misappropriated a trade secret, the owner has the constitutional right to compensation for that "taking." But suppression of the evidence needed to prove the owner's claim removes that constitutionally mandated remedy. Second, and equally problematic, the destruction of inventors' claims (whether patent or trade secret) may have a significant deterrent effect on companies' willingness to pursue inventions sought by the military. This effect is particularly troubling because it will fall disproportionately on smaller businesses, which directly conflicts with the Department of Defense's stated goal of increasing the proportion of defense technology that comes from smaller businesses. Such businesses must rely primarily on legal protection, rather than political or economic clout, to vindicate their intellectual property rights. If application of the privilege strips these inventors of that protection, they may be disinclined to focus on inventions of interest to the military. In essence, the nation's long-term defense strategy is being taken hostage by the Government's short-term litigation strategy. Given these concerns, as well as courts' essential obligation to hear valid claims, it is incumbent upon courts to consider more carefully whether the circumstances of a particular case require the severe response seen in Crater. In many situations, courts could employ procedural mechanisms that would safeguard sensitive information yet still permit innovators to pursue their claims. Using these approaches, courts could protect sensitive information without forcing inventors to have to pay the price - literally and figuratively - for the Government's use of its privilege and without risking our nation's future security.

Full post as published by The Trade Secrets Vault on December 26, 2008 (boomark / email).