Kewanee Oil Co. v. Bicron Corp.
416 U.S. 470, 94 S.Ct. 1879, 40 L.Ed.2d 315, 181 U.S.P.Q. (BNA) 673 (1974), reversing and remanding 478 F.2d 1074 (6th Cir. 1973).
[*472] Mr. Chief Justice Burger delivered the opinion of the Court.
We granted certiorari to resolve a question on which there is a conflict
in the courts of appeals: whether state trade secret protection is pre-empted
by operation of the federal patent law. In the instant case the Court
of Appeals for the Sixth Circuit held that there was preemption. The
Courts of Appeals for the Second, Fourth, Fifth, and Ninth Circuits have
reached the opposite conclusion. [*473]
Harshaw Chemical Co., an unincorporated division of petitioner, is a leading
manufacturer of a type of synthetic crystal which is useful in the detection
of ionizing radiation. In 1949 Harshaw commenced research into the
growth of this type crystal and was able to produce one less than two inches
in diameter. By 1966, as the result of expenditures in excess of $
1 million, Harshaw was able to grow a 17-inch crystal, something no one
else had done previously. Harshaw had developed many processes, procedures,
and manufacturing techniques in the purification of raw materials and the
growth and encapsulation of the crystals which enabled it to accomplish
this feat. Some of these processes Harshaw considers to be trade secrets.
The individual respondents are former employees of Harshaw who formed or
later joined respondent Bicron. While at Harshaw the individual respondents
executed, as a condition of employment, at least one agreement each, requiring
them not to disclose confidential information or trade secrets obtained
as employees of Harshaw. Bicron was formed in August 1969 to compete
with Harshaw in the production of the crystals, and by April 1970, had grown
a 17-inch crystal.
Petitioner brought this diversity action in United States District Court
for the Northern District of Ohio seeking injunctive relief and damages
for the misappropriation of trade secrets. The District Court, applying
Ohio trade secret law, granted a permanent injunction against the disclosure
or use by respondents of 20 of the 40 claimed trade secrets until such time
as the trade secrets had [*474] been released to the public, had
otherwise generally become available to the public, or had been obtained
by respondents from sources having the legal right to convey the information.
* * * [T]he Court of Appeals reversed the District Court, finding Ohio's
trade secret law to be in conflict with the patent laws of the United States.
The Court of Appeals reasoned that Ohio could not grant monopoly protection
to processes and manufacturing techniques that were appropriate subjects
for consideration under 35 U.S.C. § 101 for a federal patent but which had
been in commercial use for over one year and so were no longer eligible
for patent protection under 35 U.S.C. § 102 (b).
We hold that Ohio's law of trade secrets is not preempted by the patent
laws of the United States, and, accordingly, we reverse.
Ohio has adopted the widely relied-upon definition of a trade secret found
at Restatement of Torts § 757, comment b (1939). According to the
"[a] trade secret may consist of any formula, pattern, device or compilation
of information which is used in one's business, and which gives him an
opportunity to obtain an advantage over competitors who do not [*475]
know or use it. It may be a formula for a chemical compound, a process
of manufacturing, treating or preserving materials, a pattern for a machine
or other device, or a list of customers."
The subject of a trade secret must be secret, and must not be of public
knowledge or of a general knowledge in the trade or business. This
necessary element of secrecy is not lost, however, if the holder of the
trade secret reveals the trade secret to another in confidence, and under
an implied obligation not to use or disclose it. These others may
include those of the holder's employees to whom it is necessary to confide
it, in order to apply it to the uses for which it is intended. Often
the recipient of confidential knowledge of the subject of a trade secret
is a licensee of its holder.
The protection accorded the trade secret holder is against the disclosure
or unauthorized use of the trade secret by those to whom the secret has
been confided under the express or implied restriction of nondisclosure
or nonuse. The law also protects the holder of a trade [*476]
secret against disclosure or use when the knowledge is gained, not by the
owner's volition, but by some "improper means," Restatement of Torts § 757
(a), which may include theft, wiretapping, or even aerial reconnaissance.
A trade secret law, however, does not offer protection against discovery
by fair and honest means, such as by independent invention, accidental disclosure,
or by so-called reverse engineering, that is by starting with the known
product and working backward to divine the process which
aided in its development or manufacture.
* * *
The subject matter of a patent is limited to a "process,
machine, manufacture, or composition of matter, or . . . improvement thereof,"
35 U.S.C. § 101, which fulfills the three conditions of novelty and utility
as articulated and defined in 35 U.S.C. §§ 101 and 102, and nonobviousness,
[*477] as set out in 35 U.S.C. § 103.(1) If
an invention meets the rigorous statutory tests for the issuance of a patent,
the patent is granted, for a period of 17 [*478] years, giving what
has been described as the "right of exclusion[.]"(2)
This protection goes not only to copying the subject matter, which
is forbidden under the Copyright Act, 17 U.S.C. § 1 et seq., but also to
The first issue we deal with is whether the States are forbidden to act
at all in the area of protection of the kinds of intellectual property which
may make up the subject matter of trade secrets.
Article I, § 8, cl. 8, of the Constitution grants to the Congress the power
"to promote the Progress of Science and useful Arts, by securing for limited
Times to Authors and Inventors the exclusive Right to their respective
Writings and Discoveries . . . ."
In the 1972 Term, in Goldstein v. California, 412 U.S. 546 (1973),
we held that the cl. 8 grant of power to Congress was not exclusive and
that, at least in the case of writings, the States were not prohibited from
encouraging and protecting the efforts of those within their borders by
[*479] appropriate legislation. The States could, therefore, protect
against the unauthorized rerecording for sale of performances fixed on records
or tapes, even though those performances qualified as "writings" in the
constitutional sense and Congress was empowered to legislate regarding such
performances and could pre-empt the area if it chose to do so. This
determination was premised on the great diversity of interests in our Nationthe
essentially nonuniform character of the appreciation of intellectual achievements
in the various States. Evidence for this came from patents granted
by the States in the 18th century.
Just as the States may exercise regulatory power over writings so may the
States regulate with respect to discoveries. States may hold diverse
viewpoints in protecting intellectual property relating to invention as
they do in protecting the intellectual property relating to the subject
matter of copyright. The only limitation on the States is that in
regulating the area of patents and copyrights they do not conflict with
the operation of the laws in this area passed by Congress, and it is to
that more difficult question we now turn.
The question of whether the trade secret law of Ohio is void under the
Supremacy Clause involves a consideration of whether that law "stands
as an obstacle to the accomplishment and execution of the full purposes
and objectives of Congress." Hines v. Davidowitz, 312 U.S.
52, 67 (1941). * * * [*480] * * *
The laws which the Court of Appeals in this case held to be in conflict
with the Ohio law of trade secrets were the patent laws passed by the
Congress in the unchallenged exercise of its clear power under Art. I,
§ 8, cl. 8, of the Constitution. The patent law does not explicitly
endorse or forbid the operation of trade secret law. However, .
. . if the scheme of protection developed by Ohio respecting trade secrets
"clashes with the objectives of the federal patent laws," Sears, Roebuck
& Co. v. Stiffel Co., 376 U.S. , 231 [(1964)], then the state
law must fall. To determine whether the Ohio law "clashes" with
the federal law it is helpful to examine the objectives of both the patent
and trade secret laws.
The stated objective of the Constitution in granting the power to Congress
to legislate in the area of intellectual property is to "promote the Progress
of Science and useful Arts." The patent laws promote this progress
by offering a right of exclusion for a limited period as an incentive
to inventors to risk the often enormous costs in terms of time, research,
and development. The productive effort thereby fostered will have
a positive effect on society through the introduction of new products
and processes of manufacture into the economy, and the emanations by way
of increased employment and better lives for our citizens. In return
for the right of exclusionthis "reward for inventions"the
patent laws impose upon the inventor a requirement of disclosure. To
insure adequate and full disclosure so that upon the [*481] expiration
of the 17-year period "the knowledge of the invention enures to the people,
who are thus enabled without restriction to practice it and profit by
its use," United States v. Dubilier Condenser Corp., 289 U.S. 178,
187 (1933), the patent laws require that the patent application shall
include a full and clear description of the invention and "of the manner
and process of making and using it" so that any person skilled in the
art may make and use the invention. 35 U.S.C. § 112. When
a patent is granted and the information contained in it is circulated
to the general public and those especially skilled in the trade, such
additions to the general store of knowledge are of such importance to
the public weal that the Federal Government is willing to pay the high
price of 17 years of exclusive use for its disclosure, which disclosure,
it is assumed, will stimulate ideas and the eventual development of further
significant advances in the art. The Court has also articulated
another policy of the patent law: that which is in the public domain cannot
be removed therefrom by action of the States. "Federal law requires
that all ideas in general circulation be dedicated to the common good
unless they are protected by a valid patent." Lear, Inc. v. Adkins,
395 U.S. , 668 [(1969)]. See also Goldstein v. California,
412 U.S., at 570-571; Sears, Roebuck & Co. v. Stiffel Co., supra;
Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234, 237-238
(1964); International News Service v. Associated Press, 248 U.S.
215, 250 (1918) (Brandeis, J., dissenting).
The maintenance of standards of commercial ethics and the encouragement
of invention are the broadly stated policies behind trade secret law.
"The necessity of good faith and honest, fair dealing, is the very
life [*482] and spirit of the commercial world." National
Tube Co. v. Eastern Tube Co., 3 Ohio C. C. R. (n. s.) , 462 [(1902),
aff'd, 69 Ohio St. 560, 70 N. E. 1127 (1903)]. * * * In
Wexler v. Greenberg, 399 Pa. 569, 578-579, 160 A.2d 430, 434-435
(1960), the Pennsylvania Supreme Court noted the importance of trade secret
protection to the subsidization of research and development and to increased
economic efficiency within large companies through the dispersion of responsibilities
for creative developments.
Having now in mind the objectives of both the patent and trade secret
law, we turn to an examination of the interaction of these systems of
protection of intellectual propertyone established by the Congress
and the other by a Stateto determine whether and under what circumstances
the latter might constitute too great an encroachment on the federal patent
system to be tolerated. * * *
* * * [T]rade secret law protects items which would not be proper
subjects for consideration for patent protection under 35 U. S. C. §
101. As in the [*483] case of the recordings in Goldstein
v. California, Congress, with respect to nonpatentable subject matter,
"has drawn no balance; rather, it has left the area unattended, and
no reason exists why the State should not be free to act." Goldstein
v. California, supra, at 570 (footnote omitted).
Since no patent is available for a discovery, however useful, novel, and
nonobvious, unless it falls within one of the express categories of patentable
subject matter of 35 U.S.C. § 101, the holder of such a discovery would
have no reason to apply for a patent whether trade secret protection existed
or not. Abolition of trade secret protection would, therefore, not
result in increased disclosure to the public of discoveries in the area
of nonpatentable subject matter. Also, it is hard to see how the
public would be benefited by disclosure of customer lists or advertising
campaigns; in fact, keeping such items secret encourages businesses to
initiate new and individualized plans of operation, and constructive competition
results. This, in turn, leads to a greater variety
of business methods than would otherwise be the case if privately developed
marketing and other data were passed illicitly among firms involved in
the same enterprise.
* * * The question remains whether those items which are proper subjects
for consideration for a patent may also have available the alternative
protection accorded by trade secret law.
[*484] Certainly the patent policy of encouraging invention is
not disturbed by the existence of another form of incentive to invention.
In this respect the two systems are not and never would be in conflict.
Similarly, the policy that matter once in the public domain must
remain in the public domain is not incompatible with the existence of
trade secret protection. By definition a trade secret has not been
placed in the public domain.(3)
The more difficult objective of the patent law to reconcile with trade
secret law is that of disclosure, the quid pro quo of the right to exclude.
We are helped in this stage of the analysis by Judge Henry Friendly's
opinion in Painton & Co. v. Bourns, Inc., 442 F.2d 216 [,224] (2d
Cir. 1971). There the Court of Appeals thought it useful,
in determining whether inventors will refrain because of the existence
of trade secret law from applying for patents, thereby depriving the public
from learning of the invention, to distinguish between three categories
of trade secrets:
"(1) the trade secret believed by its owner to constitute a validly patentable
invention; (2) the trade secret known to its owner not to be so patentable;
and (3) the trade secret whose valid patentability is considered dubious."
Trade secret protection in each of these categories would run against
breaches of confidencethe employee and licensee situationsand
theft and other forms of industrial espionage. As to the trade secret
known not to meet the standards [*485] of patentability, very little
in the way of disclosure would be accomplished by abolishing trade secret
protection. With trade secrets of nonpatentable subject matter,
the patent alternative would not reasonably be available to the inventor.
"There can be no public interest in stimulating developers of such
[unpatentable] knowhow to flood an overburdened Patent Office with applications
[for] what they do not consider patentable." Ibid. The
mere filing of applications doomed to be turned down by the Patent Office
will bring forth no new public knowledge or enlightenment, since under
federal statute and regulation patent applications and abandoned patent
applications are held by the Patent Office in confidence and are not open
to public inspection. 35 U.S.C. § 122; 37 C.F.R. § 1.14 (b).
Even as the extension of trade secret protection to patentable subject
matter that the owner knows will not meet the standards of patentability
will not conflict with the patent policy of disclosure, it will have a
decidedly beneficial effect on society. Trade secret law will encourage
invention in areas where patent law does not reach, and will prompt the
independent innovator to proceed with the discovery and exploitation of
his invention. Competition is fostered and the public is not deprived
of the use of valuable, if not quite patentable, invention.
Even if trade secret protection against the faithless employee were abolished,
inventive and exploitive effort in the area of patentable subject matter
that did not meet the standards of patentability would continue, although
at a reduced level. Alternatively with the effort that remained,
however, would come an increase in the amount of self-help that innovative
companies [*486] would employ. Knowledge would be widely
dispersed among the employees of those still active in research. Security
precautions necessarily would be increased, and salaries and fringe benefits
of those few officers or employees who had to know the whole of the secret
invention would be fixed in an amount thought sufficient to assure their
loyalty. Smaller companies would be placed at a distinct economic
disadvantage, since the costs of this kind of self-help could be great,
and the cost to the public of the use of this invention would be increased.
The innovative entrepreneur with limited resources would tend to
confine his research efforts to himself and those few he felt he could
trust without the ultimate assurance of legal protection against breaches
of confidence. As a result, organized scientific and technological
research could become fragmented, and society, as a whole, would suffer.
Another problem that would arise if state trade secret protection were
precluded is in the area of licensing others to exploit secret processes.
The holder of a trade secret would not likely share his secret with
a manufacturer who cannot be placed under binding legal obligation to
pay a license fee or to protect the secret. The result would be
to hoard rather than disseminate knowledge. Instead, then, of licensing
others to use his invention and making the most efficient use of existing
manufacturing and marketing structures within the industry, the trade
secret holder would tend either to limit his utilization of the invention,
thereby depriving the public of the maximum benefit of its use, or engage
in the time-consuming and economically wasteful enterprise of [*487]
constructing duplicative manufacturing and marketing mechanisms for the
exploitation of the invention. The detrimental misallocation of
resources and economic waste that would thus take place if trade secret
protection were abolished with respect to employees or licensees cannot
be justified by reference to any policy that the federal patent law seeks
Nothing in the patent law requires that States refrain from action to
prevent industrial espionage. In addition to the increased costs
for protection from burglary, wiretapping, bribery, and the other means
used to misappropriate trade secrets, there is the inevitable cost to
the basic decency of society when one firm steals from another. A
most fundamental human right, that of privacy, is threatened when industrial
espionage is condoned or is made profitable; the state interest in denying
profit to such illegal ventures is unchallengeable.
The next category of patentable subject matter to deal with is the invention
whose holder has a legitimate doubt as to its patentability. The
risk of eventual patent invalidity by the courts and the costs associated
with that risk may well impel some with a good-faith doubt as to patentability
not to take the trouble to seek to obtain and defend patent protection
for their discoveries, regardless of the existence of trade secret protection.
Trade secret protection would assist those inventors in the more
efficient exploitation of their discoveries and not conflict with the
patent law. In most cases of genuine doubt as to patent validity
the potential rewards of patent protection are so far superior to those
accruing to holders of trade secrets, that the holders of [*488]
such inventions will seek patent protection, ignoring the trade secret
route. For those inventors "on the line" as to whether to seek patent
protection, the abolition of trade secret protection might encourage some
to apply for a patent who otherwise would not have done so. For
some of those so encouraged, no patent will be granted and the result
"will have been an unnecessary postponement in the divulging of the trade
secret to persons willing to pay for it. If [the patent does issue],
it may well be invalid, yet many will prefer to pay a modest royalty than
to contest it, even though Lear allows them to accept a license
and pursue the contest without paying royalties while the fight goes on.
The result in such a case would be unjustified royalty payments
from many who would prefer not to pay them rather than agreed fees from
one or a few who are entirely willing to do so."
Painton & Co. v. Bourns, Inc., 442 F.2d, at 225. The point
is that those who might be encouraged to file for patents by the absence
of trade secret law will include inventors possessing the chaff as well
as the wheat. Some of the chaffthe nonpatentable discoverieswill
be thrown out by the Patent Office, but in the meantime society will have
been deprived of use of those discoveries through trade secret-protected
licensing. Some of the chaff may not be thrown out.
This Court has noted the difference between the standards used by the
Patent Office and the courts to determine patentability. In Lear,
Inc. v. Adkins, 395 U.S. 653 (1969), the Court thought that an invalid
patent was so serious a threat to the free use of [*489] ideas
already in the public domain that the Court permitted licensees of the
patent holder to challenge the validity of the patent. Better had
the invalid patent never been issued. More of those patents would
likely issue if trade secret law were abolished. Eliminating trade
secret law for the doubtfully patentable invention is thus likely to have
deleterious effects on society and patent policy which we cannot say are
balanced out by the speculative gain which might result from the encouragement
of some inventors with doubtfully patentable inventions which deserve
patent protection to come forward and apply for patents. There is no conflict,
then, between trade secret law and the patent law policy of disclosure,
at least insofar as the first two categories of patentable subject matter
The final category of patentable subject matter to deal with is the clearly
patentable invention, i. e., that invention which the owner believes to
meet the standards of patentability. It is here that the federal
interest in disclosure is at its peak; these inventions, novel, useful
and nonobvious, are "‘the things which are worth to the public the embarrassment
of an exclusive patent.'" Graham v. John Deere Co., [383
U.S. 1,] 9 [(1966)] (quoting Thomas Jefferson). The interest of
the public is that the bargain of 17 years of exclusive use in return
for disclosure be accepted. If a State, through a system of protection,
were to cause a substantial risk that holders of patentable inventions
would not seek patents, but rather would rely on the state protection,
we would be compelled to hold that such a system could not constitutionally
continue to exist. In the case of trade secret law no reasonable
risk of deterrence from patent application by those who can reasonably
expect to be granted patents exists.
Trade secret law provides far weaker protection in [*490] many
respects than the patent law. While trade secret law does not forbid
the discovery of the trade secret by fair and honest means, e. g., independent
creation or reverse engineering, patent law operates "against the world,"
forbidding any use of the invention for whatever purpose for a significant
length of time. The holder of a trade secret also takes a substantial
risk that the secret will be passed on to his competitors, by theft or
by breach of a confidential relationship, in a manner not easily susceptible
of discovery or proof. Where patent law acts as a barrier, trade
secret law functions relatively as a sieve. The possibility that
an inventor who believes his invention meets the standards of patentability
will sit back, rely on trade secret law, and after one year of use forfeit
any right to patent protection, 35 U.S.C. § 102 (b), is remote indeed.
Nor does society face much risk that scientific or technological progress
will be impeded by the rare inventor with a patentable invention who chooses
trade secret protection over patent protection. The ripeness-of-time
concept of invention, developed from the study of the many independent
multiple discoveries in history, predicts that if a particular individual
had not made a particular discovery others would have, and in probably
a relatively short period of time. If something is to be discovered
at all very likely it will be discovered by more than one person. Singletons
and Multiples in Science (1961), in R. Merton, The Sociology of Science
343 (1973); J. Cole & S. Cole, Social Stratification in Science
12-13, 229-230 (1973); Ogburn & Thomas, Are Inventions Inevitable?, 37
Pol. Sci. Q. 83 (1922). Even [*491] were an inventor to keep
his discovery completely to himself, something that neither the patent
nor trade secret laws forbid, there is a high probability that it will
be soon independently developed. If the invention, though still
a trade secret, is put into public use, the competition is alerted to
the existence of the inventor's solution to the problem and may be encouraged
to make an extra effort to independently find the solution thus known
to be possible. The inventor faces pressures not only from private
industry, but from the skilled scientists who work in our universities
and our other great publicly supported centers of learning and research.
We conclude that the extension of trade secret protection to clearly patentable
inventions does not conflict with the patent policy of disclosure. Perhaps
because trade secret law does not produce any positive effects in the
area of clearly patentable inventions, as opposed to the beneficial effects
resulting from trade secret protection in the areas of the doubtfully
patentable and the clearly unpatentable inventions, it has been suggested
that partial pre-emption may be appropriate, and that courts should refuse
to apply trade secret protection to inventions which the holder should
have patented, and which would have been, thereby, disclosed. However,
since there is no real possibility that trade secret law will conflict
with the federal policy favoring disclosure of clearly patentable inventions
partial pre-emption is inappropriate. [*492]
Partial pre-emption, furthermore, could well create serious problems for
state courts in the administration of trade secret law. As a preliminary
matter in trade secret actions, state courts would be obliged to distinguish
between what a reasonable inventor would and would not correctly consider
to be clearly patentable, with the holder of the trade secret arguing
that the invention was not patentable and the misappropriator of the trade
secret arguing its undoubted novelty, utility, and nonobviousness. Federal
courts have a difficult enough time trying to determine whether an invention,
narrowed by the patent application procedure and fixed in the specifications
which describe the invention for which the patent has been granted, is
patentable. Although state courts in some circumstances must join
federal courts in judging whether an issued patent is valid, it would
be undesirable to impose the almost impossible burden on state courts
to determine the patentabilityin fact and in the mind of a reasonable
inventorof a discovery which has not been patented and remains entirely
uncircumscribed by expert analysis in the administrative process. Neither
complete nor partial pre-emption of state trade secret law is justified.
* * * [*493] * * * Trade secret law and patent law have co-existed
in this country for over one hundred years. Each has its particular
role to play, and the operation of one does not take away from the need
for the other. Trade secret law encourages the development and exploitation
of those items of lesser or different invention than might be accorded
protection under the patent laws, but which items still have an important
part to play in the technological and scientific advancement of the Nation.
Trade secret law promotes the sharing of knowledge, and the efficient
operation of industry; it permits the individual inventor to reap the
rewards of his labor by contracting with a company large enough to develop
and exploit it. Congress, by its silence over these many years,
has seen the wisdom of allowing the States to enforce trade secret protection.
Until Congress takes affirmative action to the contrary, States
should be free to grant protection to trade secrets.
Since we hold that Ohio trade secret law is not preempted by the federal
patent law, the judgment of the Court of Appeals for the Sixth Circuit
is reversed, and the case is remanded to the Court of Appeals with directions
to reinstate the judgment of the District Court.
It is so ordered.
Mr. Justice Powell took no part in the decision of this case.
Mr. Justice Marshall, concurring:
Unlike the Court, I do not believe that the possibility that an inventor
with a patentable invention will rely [*494] on state trade secret
law rather than apply for a patent is "remote indeed." State trade
secret law provides substantial protection to the inventor who intends
to use or sell the invention himself rather than license it to others,
protection which in its unlimited duration is clearly superior to the
17-year monopoly afforded by the patent laws. I have no doubt that
the existence of trade secret protection provides in some instances a
substantial disincentive to entrance into the patent system, and thus
deprives society of the benefits of public disclosure of the invention
which it is the policy of the patent laws to encourage. This case
may well be such an instance. But my view of sound policy in this
area does not dispose of this case. Rather, the question presented
in this case is whether Congress, in enacting the patent laws, intended
merely to offer inventors a limited monopoly in exchange for disclosure
of their invention, or instead to exert pressure on inventors to enter
into this exchange by withdrawing any alternative possibility of legal
protection for their inventions. I am persuaded that the former is the
case. * * *
Mr. Justice Douglas, dissenting:
Today's decision is at war with the philosophy of Sears, Roebuck &
Co. v. Stiffel Co., 376 U.S. 225, and Compco Corp. v. Day-Brite
Lighting, Inc., 376 U.S. 234.
* * *
The District Court issued a permanent injunction against respondents, ex-employees,
restraining them from using the processes used by Harshaw. By a patent
which would require full disclosure Harshaw could have obtained a 17-year
monopoly against the world. By the District Court's injunction, which
the Court approves and reinstates, Harshaw gets a permanent injunction running
into perpetuity against respondents. * * *
The conflict with the patent laws is obvious. The decision of Congress
to adopt a patent system was based on the idea that there will be much more
innovation if discoveries are disclosed and patented than there will be
when everyone works in secret. Society thus fosters a free exchange
of technological information at the cost of a limited 17-year monopoly.
* * *
A suit to redress theft of a trade secret is grounded in tort damages for
breach of a contracta historic remedy. Damages for breach of
a confidential relation are not pre-empted by this patent law, but an injunction
[*499] against use is pre-empted because the patent law states the
only monopoly over trade secrets that is enforceable by specific performance;
and that monopoly exacts as a price full disclosure. A trade secret
can be protected only by being kept secret. Damages for breach of
a contract are one thing; an injunction barring disclosure does service
for the protection accorded valid patents and is therefore pre-empted.
From the findings of fact of the lower courts, the process involved in this
litigation was unique, such a great discovery as to make its patentability
a virtual certainty. Yet the Court's opinion reflects a vigorous activist
antipatent philosophy. My objection is not because it is activist.
This is a problem that involves no neutral principle. The Constitution
in Art. I, § 8, cl. 8, expresses the activist policy which Congress has
enforced by statutes. It is that constitutional policy which we should
enforce, not our individual notions of the public good. I would affirm
the judgment below.
Back to Top
1. [Court's footnote 8]
"§ 101. Inventions patentable
"Whoever invents or discovers any new and useful process, machine, manufacture,
or composition of matter, or any new and useful improvement thereof, may
obtain a patent therefor, subject to the conditions and requirements of
"§ 102. Conditions for patentability; novelty and loss of right to patent
" A person shall be entitled to a patent unless
§ 103. Conditions for patentability; non-obvious subject matter
"(a) the invention was known or used by others in this country, or
patented or described in a printed publication in this or a foreign
country, before the invention thereof by the applicant for patent,
"(b) the invention was patented or described in a printed publication
in this or a foreign country or in public use or on sale in this country,
more than one year prior to the date of the application for patent
in the United States, or
"(c) he has abandoned the invention, or
* * *
"(f) he did not himself invent the subject matter sought to be patented,
"(g) before the applicant's invention thereof the invention was made
in this country by another who had not abandoned, suppressed, or concealed
it. In determining priority of invention there shall be considered
not only the respective dates of conception and reduction to practice
of the invention, but also the reasonable diligence of one who was
first to conceive and last to reduce to practice, from a time prior
to conception by the other.
"A patent may not be obtained though the invention is not identically
disclosed or described as set forth in section 102 of this title, if the
differences between the subject matter sought to be patented and the prior
art are such that the subject matter as a whole would have been obvious
at the time the invention was made to a person having ordinary skill in
the art to which said subject matter pertains. Patentability shall
not be negatived by the manner in which the invention was made."
[Professor's Note: Sections 102 and 103 have been amended since this decision,
but the parts quoted here are still substantially the same, insofar as is
relevant to this opinion.]
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2. [Court's footnote 9] Title 35 U.S.C. §
"Every patent shall contain a short title of the invention and a grant
to the patentee, his heirs or assigns, for the term of seventeen years,
subject to the payment of issue fees as provided for in this title, of
the right to exclude others from making, using, or selling the invention
throughout the United States, referring to the specification for the particulars
thereof. A copy of the specification and drawings shall be annexed
to the patent and be a part thereof."
[Note: Section154 has since been amended, inter alia, to change the
patent term to 20 years from the application priority date and to add other
rights to exclude.]
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3. [Court's footnote 13] An invention may
be placed "in public use or on sale" within the meaning of 35 U.S.C. §
102 (b) without losing its secret character. Painton & Co. v.
Bourns, Inc., 442 F.2d, at 224 n. 6; Metallizing Engineering Co.
v. Kenyon Bearing & Auto Parts Co., 153 F.2d 516, 520 (2d Cir.), cert.
denied, 328 U.S. 840 (1946).
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