Secrets, Secrets are No Fun! Balancing Patent Law & Trade Secret Law under the America Invents Act

22 Fed. Cir. B.J. 431 (2013)

41 Pages Posted: 25 Nov 2012 Last revised: 15 May 2014

See all articles by Stephen Elkind

Stephen Elkind

New York University School of Law

Date Written: March 1, 2013

Abstract

This note seeks to understand the tension between trade secrecy law and patent law pointed out by Judge Hand. Further, this Note argues that the recently enacted America Invents Act (“AIA”) overrules the holding from Metallizing Engineering that secret prior commercial use by an inventor before the critical date renders an invention unpatentable.

Part I discusses the different incentive structures behind patents and trade secrets. Patent law requires that an invention achieve certain higher standards than trade secret law; and in doing so provides incentivizes for a different sort of invention than trade secret law. For commercial uses that are capable of truly secret exploitation, the protections of trade secret law are often adequate so long as the inventor believes the invention will remain secret in spite of the commercialization.

Part II discusses how the pre-AIA Patent Act conceives of secret prior art and the requirements of novelty and nonobviousness. Courts have generally upheld the holding in Metallizing Engineering by interpreting the prior art provisions in the pre-AIA Patent Act to make ineligible for patenting any invention that is commercially exploited in secret before the critical date. However, while the courts are entrusted with the interpretation of the statute, the decision as to what constitutes prior art is a policy matter determined by the legislature.

Part III discusses two scenarios: (a) an inventor keeps an invention secret for a period of time and then seeks a patent, and (b) two people invent the same thing but one keeps it secret and the other applies for a patent. These scenarios are analyzed under the patent law both before and after the passage of AIA.

Part IV examines the text and legislative history of the America Invents Act. Both tools of statutory interpretation show that the new Act is intended to change our approach to treating prior secret uses as prior art. Although the textual reading is inherently ambiguous, statements in the legislative history indicate that the change in statutory language is intended to affect a change in the treatment of secret prior commercial uses in the determination of patent eligibility.

Part V discusses the public policy arguments for and against treating prior secret uses as prior art. Patent law strives to (1) incentivize invention, (2) incentivize disclosure, (3) facilitate dissemination and commercialization, and (4) distribute rewards to those deserving of the legal monopoly thereby granted. Each of these considerations further complicates how the law ought to be applied by the judiciary in the two scenarios presented in Part III.

Keywords: Patent, Trade Secret, America Invents Act, AIA, Metallizing Engineering, Secret Prior Art, Prior Art

Suggested Citation

Elkind, Stephen, Secrets, Secrets are No Fun! Balancing Patent Law & Trade Secret Law under the America Invents Act (March 1, 2013). 22 Fed. Cir. B.J. 431 (2013). Available at SSRN: https://ssrn.com/abstract=2180544 or http://dx.doi.org/10.2139/ssrn.2180544

Stephen Elkind (Contact Author)

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States

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