Trade Secrets and Prior Continuous Use

The decision to patent an invention or keep it a trade secret can be very difficult. Historically, if you choose to keep an invention secret you could theoretically maintain the secret indefinitely. Unfortunately, industrial espionage, employee turnover, or a competitor’s inventiveness might disclose your secret and leave you with no protectable advantage. Even worse, a competitor who independently discovers your trade secret can patent their “invention” and sue you for infringement.

 

Now and within the narrow confines of the “Defense to infringement based on earlier inventor” (35 USC §273), the competitor who obtains a patent on a process that you held as a trade secret might not be able to keep you from practicing that process. The America Invents Act of 2011 provides a defense to infringement if, for example, your trade secret predates the effective filing date of the competitors patent by at least one year; and you have not abandoned commercial use during the “infringing” period.

While this new defense is a benefit for companies that are thinking to hold a process as a trade secret, it does come with new risks. You may be prevented from improving your process and if you unsuccessfully assert and cannot demonstrate a reasonable basis for the defense, you might have to pay the suing party’s attorney fees.