John C. Laurence Law, PLLC 917-612-1059 john@jclaurencelaw.com
The Intersection of Trade Secrets and Patents

The Intersection of Trade Secrets and Patents

A federal court in New Orleans has allowed a trade secret claim to proceed to trial, even though the alleged trade secrets were disclosed in a patent application. Cajun Servs. Unlimited, LLC v. Benton Energy Serv. Co., No. 17-0491 (R. Doc. 241).

The lawsuit concerns Cajun’s patented elevator roller insert system (ERIS), which is a technology used in drilling for oil. Before filing its patent application, Cajun agreed to rent ERIS to Benton Energy. While renting ERIS, Benton Energy hired a third party to reverse engineer ERIS, using drawings and prototypes supplied with the rented system. Cajun eventually filed its patent application for ERIS while still renting the system to Denton Energy.

Cajun initially brought claims for trade secret theft and unfair trade practices. Once a patent was granted for ERIS, Cajun added a patent infringement claim against Benton Energy.

In response, Benton Energy filed a summary judgment motion on Cajun’s trade secret claims. Benton Energy attempted to argue that trade secret claims failed as a matter of law because Cajun publicly disclosed the ERIS technology in its patent application. That is, the information could not be a trade secret because it was no longer a “secret” since it was disclosed in the patent application.

The court disagreed. It noted that “publication of the ‘862 Patent application does not deprive Plaintiffs of a cause of action for misappropriation of trade secrets before the patent application was published.” In other words, the subsequent patent application did not absolve Benton Energy from liability for any misappropriation that occurred before the patent publication.

A non-provisional patent application in the U.S. is normally published eighteen months after its earliest priority date. A non-publication request may be made to prevent publication of the non-provisional application. This holding confirms that before publication, the information disclosed in a patent application may still be afforded trade secret protection.

Predictability and Criticality as Factors in the Evaluation of a Patent Specification

Predictability and Criticality as Factors in the Evaluation of a Patent Specification

The Court of Appeals vacated the decision of the Patent Trial and Appeal Board in In Re Global IP Holdings (Fed. Cir. 2019), instructing the Board to include predictability and criticality as factors to consider in determining whether Global IP’s written description satisfies the proper legal standard.

Global IP filed a reissue application in U.S. Patent No. 8,690,233 to replace the term “thermoplastic” with “plastic” in three independent claims. In the reissue application, the inventor filed a declaration that, at the time of the invention, he was aware of the use of plastics other than thermoplastics for the formation of a sandwich-type composite panel with a cellular core.

The Examiner rejected Global’s reissue claims finding that “the specification only supports thermoplastics“ and that Global “cannot claim the full range of plastics, which would include thermosetting as well as thermoplastics” thereby introducing new matter. The Board affirmed the Examiner’s rejection explaining that “regardless of the predictability of results of substituting alternatives, or the actual criticality of thermoplastics in the overall invention, [Globla’s] Specification, as a whole, indicates to one skilled in the art that the inventors have possession only of the skins and core comprising specifically thermoplastics.”

The Court held that the Board was mistaken in its legal analysis of whether Global’s specification complies with the written description requirement. The Court stated that “the level of detail required to satisfy the written description requirement varies depending on the nature and scope of the claims and on the complexity and predictability of the relevant technology.” The Court further stated that, in addition to predictability, the criticality or importance of an unclaimed limitation to the invention can be relevant to the written description inquiry.

Accordingly, a variation that is predictable to a person of ordinary skill in the art is more likely to be covered by a specification. Moreover, variations of a non-critical component of the invention are more likely to be covered by the specification.

U.S. Licensed Attorney Requirement for Foreign Trademark Applicants and Registrants

U.S. Licensed Attorney Requirement for Foreign Trademark Applicants and Registrants

The USPTO has amended the Rules of Practice in Trademark Cases to require applicants, registrants, or parties to a trademark proceeding whose domicile is not located in the United States or its territories to be represented by an attorney who is in an active member in good standing of the bar of a state in the United States.

A stated purpose of the rule change is to instill greater confidence in the public that U.S. trademark registrations that issue to foreign applicants are not subject to invalidation for reasons such as improper signatures and use claims. Another stated purpose is to enable the USPTO to more effectively use available mechanisms to enforce foreign applicant compliance with statutory and regulatory requirements in trademark matters.

The rule change is effective on August 3, 2019.

John C. Laurence
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