Issue No. 04 - Apr. (2014 vol. 47)
DOI Bookmark: http://doi.ieeecomputersociety.org/10.1109/MC.2014.96
Brian M. Gaff , McDermott Will & Emery, LLP
From time to time, readers send questions about scenarios and ask how the law might resolve them; here’s one group of questions relating to intellectual property. The Web extra at http://youtu.be/YyG-G0x8_VE is an audio recording from the Computing and the Law column, in which author Brian M. Gaff addresses questions from readers relating to intellectual property.
The analysis of hypothetical scenarios—the basis of law school examinations—rarely produces simple, straightforward conclusions, and even minor changes to or a different assessment of the facts can change those conclusions significantly. With that dynamic in mind, let's look at a few questions that some readers have posed.
For an expanded discussion on these questions, listen to the podcast that accompanies this column at www.computer.org/portal/web/computingnow/computing-and-the-law.
Question 1: The Test Market
The first question is, given the change in US patent law from “first to invent” to “first to file,” what happens when an inventor wants to test market his invention by putting it on sale but hasn't yet filed a patent application? This might happen when an inventor is trying to determine whether there's enough interest in his invention to justify filing a patent application. Could this prevent the inventor from getting a patent?
The answer to this question depends on the country where the inventor would like to get a patent. Unlike the US, many countries require an invention to have “absolute novelty” for it to be patentable. In other words, there can be no disclosure of the invention before the filing of the corresponding patent application. An offer for sale before filing is a disclosure that could prevent the inventor from getting a patent in certain foreign countries. So, if you're planning to apply for a patent outside of the US, check whether the foreign country requires absolute novelty before you conduct your test marketing.
US patent law traditionally gave inventors a one-year grace period between disclosing the invention and filing the corresponding patent application. Even though US patent law changed such that most applications filed on or after 16 March 2013 are subject to a first-to-file system, the grace period remains. This grace period allows an inventor to make a public disclosure about the invention and delay filing an application for up to one year from the date of the disclosure. Before the change in the law, putting the invention on sale in the US triggered the grace period. Under the new law, putting the invention on sale anywhere will trigger the grace period.
If the invention is disclosed by putting it on sale and then someone else files a patent application on the same invention before the inventor has filed an application, the inventor might be able to rely on the date of his earlier disclosure, that is, the date he placed the invention on sale. This could allow the second filer—the inventor—to be eligible for a patent over the first person who filed. The scope of the disclosure, however, is important to the scope of the patent. If the inventor includes material in his patent application that wasn't previously disclosed, he might not get the benefit of the earlier date and could lose to the first filer.
Question 2: The Trade Secret
The second question is, what happens if someone reverse engineers a trade secret? Assuming that the subject matter of the trade secret is eligible for a patent, could that person patent it and potentially block the original inventor from using it?
The answer to this question might depend on jurisdiction, because trade secret law differs between US states. First, however, it's important to understand what a trade secret is and the extent to which a trade secret can be protected.
Trade secrets protect information that produces or provides a competitive advantage so long as that information remains secret. Consequently, the protection might last indefinitely if the public hasn't learned the trade secret. This sometimes makes trade secrets more attractive than other forms of protection like patents and copyrights that have limited duration.
A risk is that once the public learns the trade secret through any means—including employee theft or careless disclosure—the protection could be immediately and irrevocably lost. Reverse engineering can lead to the loss of the protection as well. Although a party might have agreed by contract to not reverse engineer, trade secret laws per se don't protect against that.
In the US under the prior first-to-invent system that pertains to applications filed before 16 March 2013, the person who reverse engineered the trade secret probably wouldn't be able to get a patent if there was evidence, such as witnessed laboratory notebooks, that the original inventor knew of the invention first. Putting this evidence in front of the patent examiner during the examination of a later-filed patent application might prevent the US Patent and Trademark Office from allowing that earlier-filed application. Also, under the prior system, the Section 102(f) of the patent laws prevented issuing patents to a person who isn't the true inventor, such as the person who did the reverse engineering. But Section 102(f) is more likely to be a factor when someone is accused of infringing an issued patent, not during the pendency of a patent application. In other words, it's unlikely that a patent examiner would reject an application based on Section 102(f).
The original inventor might be out of luck if he wants to apply for a patent after the disclosure of the trade secret. By the time the trade secret becomes public, it's possible that the corresponding invention was in use or on sale in the US for more than one year. For example, the product embodying the invention might have been reverse engineered years after the product was introduced publicly. In this situation the grace period operates against the inventor—if more than one year has elapsed, he will be prevented from getting a patent.
Under the current first-to-file system, it would seem that the person who reverse engineered the trade secret wouldn't be able to get a patent because—before he could apply for a patent—others, such as the original inventor, had the corresponding product in public use or on sale. (Remember, the one-year grace period applies to the inventor and his earlier disclosures, not to one person's disclosures and another's filing of an application.)
If the original inventor were still eligible to apply for a patent after the reverse engineering took place because, for example, the invention was on sale for less than one year, he could challenge an application filed by the person who did the reverse engineering in a so-called “derivation proceeding.” This is an administrative procedure within the Patent Office that resolves competing claims to an invention. At its core, the derivation proceeding asserts that one party derived the application from the true inventor and therefore isn't entitled to a patent.
Another aspect of the current first-to-file system is the “prior commercial use defense.” Simply put, this is a defense to a patent-infringement allegation in which the accused infringer is allowed to rely on prior commercial use of the invention for at least one year before someone else applied for the corresponding patent or disclosed the invention to the public. So, if someone reverse engineered a product to uncover a trade secret and was somehow able to get a patent on it, the original inventor—the one who established the trade secret—might be able to avoid liability for infringement if he had been using the invention commercially for at least one year beforehand.
Question 3: The Defensive Publication
The third question is, if someone discloses his invention without patenting it, does this prevent others from getting a patent on the invention as well?
Disclosing inventions with the goal of preventing others patenting the technology is nothing new. Some companies might believe that certain discoveries don't warrant patent protection under their internal guidelines. However, those companies might be concerned about competitors patenting the same or similar subject matter and blocking access to technology.
Under the prior first-to-invent system, publishing an enabling disclosure; that is, one with sufficient detail—can sometimes preclude others from patenting the invention, particularly in countries outside of the US that require absolute novelty. If the publication is over one year old, then even the inventor won't be eligible for a US patent because he will be outside of the grace period.
Under the first-to-file system there's another wrinkle. An inventor is generally entitled to rely on the date of his patent application or his publication to defeat another's later-filed patent application. So, if a party invents first and publishes a defensive paper on his invention first, he will likely prevent a patent from being awarded to a later-arriving second party. However, if the second party also published a defensive paper and did so before the first party's publication, and then the second party filed a patent application, the result might be different. Indeed, the second party might be able to rely on his earlier defensive publication date and obtain a patent over the first party's defensive publication. In other words, the author of the earlier defensive publication wins. However, it's important to remember that there needs to be a close correlation between what's in the defensive publication and what's claimed in the patent application.
Questions from readers are encouraged. These questions were drawn from some of those received, but they don't necessarily reflect actual events. The answers provided above are based on specific facts and might not apply in other situations, including those that appear similar. As with many questions in the law, the best answer is usually, “that depends.” Consequently, get advice from your lawyer before deciding on a course of action.
Brian M. Gaff is a senior member of IEEE and a partner at the McDermott Will & Emery, LLP, law firm. Contact him at email@example.com.