A number of commentators (including the Trade Secret Litigator) have opined about the potential impact that the new America Invents Act (AIA) may have on the increased use of trade secrets, primarily focusing on the newly-expanded “prior commercial use” defense under the AIA. However, my colleague Robert T. S. Latta recently brought another potential benefit that may arise under the AIA for trade secret owners to my attention, and he was kind enough to commit his thoughts to this post. According to Rob, the legislative history of another recent amendment of the AIA suggests that a trade secret owner may essentially be provided with a potential mulligan in the form of a subsequent patent should he or she lose his or her trade secret protection. 

Under current patent law, if an inventor maintains his invention as a trade secret and commercially profits from that invention for more than one year, the inventor forfeits the right to patent that invention. As Justice Learned Hand wrote long ago, “it is a condition upon an inventor’s right to a patent that he shall not exploit his discovery competitively after it is ready for patenting; he must content himself with either secrecy, or legal monopoly.” Metallizing Engineering Co. v. Kenyon Bearing and Auto Parts Co., 153 F.2d 516 (2d Cir. 1946).

However, new language in the AIA may change that settled precedent. The revised § 102(a)(1), which comes into effect on March 16, 2013, permits a patent unless “the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.” (Emphasis added). If it was not available to the public (as any trade secret would not be), it would be patentable under the new §102(a)(1).

The legislative history supports this view. Senator Jon Kyl, on the day the AIA was enacted, explained “public uses and sales are prior art only if they make the invention available to the public.” Congressional Record, Senate, Sept. 8, 2011 at S5431. Furthermore, the day after the enactment of the AIA, Senator Patrick Leahy advised that §102(a)(1) “was drafted in part to do away with precedent under current law that private offers for sale or private uses or secret processes practiced in the United States that result in a product or service that is then made public may be deemed patent-defeating prior art.” He stated that prior art must meet the “the public accessibility standard that is well-settled in current law, especially case law of the Federal Circuit.” Congressional Record Volume 157, Number 35 (Wednesday, March 9, 2011), Senate, S1496-S1497.

If §102(a)(1) is indeed interpreted, as suggested by this legislative history, to overturn current precedent, then an inventor will no longer forfeit his or her U.S. patent rights for maintaining his or her invention as trade secrets for a period longer than one year. The inventor will be free to practice that invention for commercial gain as a trade secret until such time as the inventor finds it necessary to patent it (providing another has not already patented the invention). Further, if someone has patented the invention, the prior secret user would still have the prior commercial use defense to patent infringement under §273.

Is the new language in §102(a)(1) simply a “catch-all” phrase?  Some (most notably, Sughrue Mion LLP, in an article  attached as a PDF below) interpret “or otherwise available to the public” as nothing more than a catch-all language, capturing unspecified types of disclosure. Under this interpretation, the current case law regarding secret uses and/or sales would remain unaltered. These commentators have argued that this interpretation of §102(a)(1) maintains harmony of this section of U.S. patent law with that of the patent laws of other countries, a stated purpose of the AIA. (See comments of Senator Hatch, Congressional Record (January 25, 2011), Senate, S142 (“If enacted the Patent Reform Act of 2011 would move the United States to a first-inventor-to-file system, which will bring greater harmony and improve our competitiveness.”)). 

This “catch-all” interpretation of § 102(a)(1) might also fall in line with the statutory rule of construction that when Congress intends such a dramatic shift in the law, it does so explicitly. Bd. of Trustees of Leland Stanford Jr. Univ. v. Roche Molecular Sys., Inc., __ U.S. __, 09-1159 (June 6, 2011) (“Congress has in the past divested inventors of their rights in inventions by providing unambiguously that inventions created pursuant to specified federal contracts become the property of the United States … Such language is notably absent from the Bayh-Dole Act”).

That being said, however, as Robert Maier of Baker & Botts argues in his article “The Big Secret of the America Invents Act” for IP Today, the legislative history of the AIA suggests that a “catch-all” in §102(a)(1) was not the intent of at least some lawmakers. In the humble view of the Trade Secret Litigator, this certainly does not look like “catch all” language, and on its face, this relatively straightforward language would seem to include trade secrets which are by definition not publicly available.

Until a court considers this issue under §102(a)(1) of the AIA, this will remain a subject of debate. However, it may be worthwhile for a trade secret owner whose trade secret has lost one or more of its trade secret elements to test this proposition before a court.

Sughrue AIA Article.pdf (175.08 kb)