Tuesday, April 21, 2015
Christopher Funk, Kellogg, Huber, Hansen, Todd, Evans & Figel, P. L. L. C., is publishing The Bar Against Patenting Others' Secrets in 19 Stan. Tech. L. Rev. (2015). Here is the abstract.
In patent litigation, courts frequently allow patent holders to access an accused infringer’s trade secrets and other confidential technology. The secrets may be relevant to claims of patent infringement. But the confidential access creates a risk that patent holders will misuse those secrets when their attorneys or experts wear two hats — litigating the patent suit in court and working on patent applications in the same field as the accused infringer’s confidential technology. These two hats allow certain attorneys and experts the opportunity to target the accused infringer’s secret technology — either inadvertently or deliberately — by patenting it as their client’s own intellectual property (IP).
Several courts attempt to prevent this potential misuse of IP by imposing a patent prosecution bar, which typically forbids those with access to another party’s confidential technology from working at all on patent applications in the same field. But the U.S. Court of Appeals for the Federal Circuit has created a flawed test for determining when a district court may impose prosecution bars. As implemented by most district courts, prosecution bars apply to only those attorneys and experts who are “competitive decisionmakers” and who have a history of working on patent applications. The test is based on a vague and underinclusive term and leaves those without a similar history free of a prosecution bar and positions them to target the other side’s trade secrets with new patent claims. This targeted patenting undermines the IP system’s channeling between patents and trade secrets. Channeling theory posits that inventors whose inventions are inherently transparent or at risk of being reverse engineered will choose patents and public disclosure over trade secrecy; but inventors whose inventions are inherently opaque may well choose trade secrecy. Both forms of IP promote innovation and deserve protection. Patent prosecution bars protect the integrity and incentives of both forms of IP by ensuring one party does not inadvertently or deliberately misappropriate the other’s trade secret and grab a monopoly over technology it did not create.
Despite courts and parties routinely struggling to apply the Federal Circuit’s test, unfavorable standards of review have deterred appeals and made prosecution bars less visible to scholars. This Article fills a gap in the literature and proposes a new approach to patent prosecution bars that applies to everyone with confidential access. Instead of the current wholesale bars that prohibit any work on patent applications, the proposed model bar would prohibit only specific prosecution activities, such as drafting patent applications and claims, where attorneys or experts risk misusing their access to the other side’s secrets.
Download the article from SSRN at the link.