patent or trade secret?...trade secret due to an unsuccessful attempt at obtaining a patent....

Disclaimer: This presentation does not constitute legal advice or a legal opinion on any matter discussed. This presentation is for

educational purposes only. If you have a specific legal question, please consult with an attorney of your own choice.

Dan Chojnowski ([email protected])

Paul Engel ([email protected])

Patent or Trade Secret?

© 2019 Howard & Howard Attorneys PLLC

Agenda

Patent Basics

Trade Secret Basics

Compare and Contrast

Procedural Mechanisms at the USPTO for

Information Gathering

Conclusion

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Patent Basics

Patents

Are active for a limited time (e.g. 20 years) to exclude

others from making, using, selling, offering to sell, or

importing the patented invention

Require public disclosure, at least at some point

Are not guaranteed; only about 60% of patent

applications are allowed by the USPTO and grant as a

patent, and the vast majority of issued patents have

claims which were narrowed during prosecution

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Typical Timeline for Obtaining a Patent4

Provisional

Application Filed

Publication

Active Examination

12 Mo.

18 Mo.

~ 29 Mo.

U.S. Non-Provisional &

PCT Applications Filed

~ 36 Mo. ~ 60 Mo.


Trade Secret Basics

Trade Secrets

Derive economic value from not being readily known orascertainable

Almost any confidential business information that gives acompetitive advantage by virtue of its secrecy

Customer/contact lists, marketing plans, purchasingdetails, distribution systems, pricing sheets, etc.

Formulas, process parameters, QC test methods,application techniques, etc.

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Trade Secret Basics

Trade Secrets

Must be maintained as a secret through “reasonable efforts”

Document them!

Consider using a standard Invention Disclosure Form

Mark “Confidential”

Add Copyright notice (e.g., © 2005 Acme Products)

Restrict access

Secure location, need-to-know

Place all who know on notice

Use a confidentiality agreement with outsiders

Protect your trade secrets – or you lose them

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Trade Secret Basics

Trade Secrets

Susceptible to independent discovery and potentially

capable of being reverse engineered

Can be maintained forever

Trade secrets such as the formulas for WD-40® and Coca

Cola® have been maintained for years, as have countless

of other trade secrets that we will never know about!

But are difficult to maintain – especially with pervasive

challenges that have come with the advent of electronic data

and increased job hopping

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Very few restraints on subject

matter

No publication required

Protection can last

indefinitely

Typically lower cost

Difficult to maintain

Susceptible to independent

discovery and potentially

reverse engineering

Limited eligibility of subject

matter

Publication required

20 year term

Typically higher cost

Not guaranteed

Prohibit others from making,

using, selling, offering to sell,

or importing the patented

invention

Trade Secrets Patents

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Can be licensed forever

Damages for trade secret

misappropriation can include

both the actual loss caused by

the misappropriation and the

unjust enrichment.

Injunctions are a primary

remedy since once lost, a

trade secret is lost forever.

Can be licensed up to

expiration of the patent

The plaintiff in a patent case

must show actual damages,

and there is no recovery for

unjust enrichment (35 U.S.C.

§ 284).

Injunctions are difficult to

obtain.

Trade Secrets Patents

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Deciding Between a Patent and Trade Secret

Generally, patents are considered more economically valuable

than a trade secret.

However, decision makers are often cautious to avoid the

worst case scenario – foreclosing on the ability to maintain a

trade secret due to an unsuccessful attempt at obtaining a

patent.

Decision makers should consider evaluating the likelihood of

obtaining a patent through a patentability search/investigation,

which identifies the most relevant prior art and provides an

indication as to what claim scope can reasonably be achieved.

10


Have Your Cake & Eat It Too (in the U.S.)

Procedural options are available at the USPTO to eliminate the

publication of your patent application before it grants as a

patent.

A Non-Publication Request can be made at the time of filing

the application if the Applicant certifies that the invention

disclosed in the application has not and will not be the

subject of an application filed in another country or under a

multilateral international agreement.

Request can be rescinded at a later time

This procedure will prevent the publication of an application

before a patent is granted.

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Have Your Cake & Eat It Too (globally)

With rare exceptions, an application for a patent will publish

before the USPTO even examines the application.

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However, if we can increase the speed of examination to

reach a determination on patentability from the USPTO

before the application publishes, the Applicant can then

decide:

Whether to abandon the application before grant if a

favorable claim scope is not obtained; or

Accept the allowed claim scope and move forward with

foreign patent applications if desired (and within 12

months from earliest filing date).

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The USPTO provides 2 procedural mechanisms to expedite the

examination of a patent application, which are available to any

Applicant:

Track 1 Prioritized Examination – For a $4,000 additional fee, the

USPTO will accelerate the examination of an application with the

stated goal of reaching a decision on patentability within 1 year.

File a petition with the USPTO requesting prioritized examination

Petition typically grants within 6 weeks

First Office Action typically received within 1.8 months from the grant of the

Petition

Decision on patentability typically rendered within 5 months from the grant

of the petition or about 6.5 months after filing the application - well before

the application publishes

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Accelerated Examination – For a $140 additional fee,

the USPTO will accelerate the examination of an

application with the stated goal of reaching a decision

on patentability within 1 year.

File a petition with the USPTO requesting

accelerated examination.

Provide the USPTO with a preexamination report,

which includes a detailed search methodology, a list

of the most relevant references, and a detailed

explanation of how each claim is patentable over the

references.

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Summary

When deciding between a patent and a trade secret ask

yourself whether you have all of the information necessary to

make an informed decision. Consider:

Conducting a patentability investigation to understand what

claim scopes may be available;

If your organization is only interested in the U.S. market,

filing a non-publication request; and

If your organization is interested in the global market,

expediting examination to obtain a decision on patentability

from the USPTO prior to the publication of your

application.

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Thank you!

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