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2013.10

The Inventor's Mentor

October 2013

Defensive Publications and Trade Secrets

 
You believe that you have a potentially groundbreaking idea that could benefit the whole world. Ideally everyone should have access to your idea at no cost. How do you prevent someone else from patenting it thereby restricting its use?

 

Fortunately there is a low cost solution. An inventor is not entitled to a patent if the invention has been published by someone else before the inventor files his application with the patent office.

 

Therefore, to prevent someone else from getting a patent all you need to do is publish your idea. Should you change your mind and decide that, after all, you really want to get a patent, you have one year from the date of your publication to file your invention with the patent office. Your patent will be granted unless someone else also publishes the same idea before you file, thereby locking you out. In this case both you and he will be unable to get a patent. Be aware of the consequences before making your invention public.

 

Defensive Publications

A defensive publication is an effective way for an inventor to preempt anyone else from patenting his invention. However it must be done with the firm understanding that the inventor loses all exclusive rights to the invention, and so does everyone else. The invention enters the public domain and can be used freely by anyone. There are many reasons why someone may use this approach. For example, the owner of an idea may have no business incentive to market a cure for disease afflicting an underdeveloped country because the profits would be too small. Instead, he may decide to make the cure public for the purpose of generating goodwill for his company or his country.               

Yet another reason for publishing an idea without a patent is if the marketing time window is very small. For example, the idea may involve a fad, such as a line of fashion with an estimated lifetime of a few months. This is insufficient time for a patent to be awarded and to generate revenues.         

There may also be competitive reasons to publish an idea. For example if a competitor suspects a company of employing a trade secret in which the competitor has no interest, the competitor may decide to publish this trade secret as a means for opening the floodgate of competition against the company and reduce its resources and ability to compete on the marketplace. 

 

Trade Secrets

Alternatively, an inventor can protect an invention as a trade secret. To qualify as a trade secret the invention must not be generally known to the public, must provide an economic advantage to the owner over competitors or customers, and must be subject to reasonable efforts to maintain its secrecy. He can protect its confidential information through non-compete and non-disclosure contracts with its employees or consultants. In addition, the owner must be actively using it, otherwise the invention is considered to be abandoned and the inventor automatically loses all rights to it. An example of a trade secret is the Coca Cola formulation.

 

Trade secrets arise out of state laws and not out of federal laws. Most states have adopted the Uniform Trade Secrets Act (UTSA). Only Massachusetts, New York, New Jersey, North Carolina, and Texas have not adopted the UTSA. So, the law may vary slightly from jurisdiction to jurisdiction.

 

The law of protection of confidential information effectively allows a perpetual monopoly in secret information. Therefore trade secrets do not expire as do patents. However, the lack of formal protection also means that a third party may independently duplicate, use and even patent this information.

 

What if the third party now armed with a patent sues the original holder of the trade secret for infringement? Under the new patent law, the original holder can defeat the lawsuit by presenting clear and convincing evidence that he had engaged in commercial use of the patented subject matter at least one year prior to the patent’s effective filing date. In the presence of such evidence the holder of the trade secret would be allowed use of the invention.               

 

For archived newsletters and a lot of information for the small inventor go to: www.patentsandventures.com.

If you have any question you can contact me at (858)259-2226 or email me at glevy@patentsandventures.com.            

This newsletter should not be construed as being legal advice.                  ©2013 by George Levy

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