FALL 2008

Trade Secrets


Course No. 9200-704 (and 804)-801

ID No. 16545

MW 3:00 - 4:30 p.m.
Room L-134
Professor Jay Dratler, Jr.
Room 231D (IP Alcove)
(330) 972-7972
Copyright © 2000, 2002, 2003, 2006, 2008   Jay Dratler, Jr.   For permission, see CMI.

Questions and Notes on Mason

1.  Is Mason a contract case or a tort case?  What difference does that make?  Would breach of express or implied contract be easier or harder to prove than misappropriation of a trade secret?  What difference does the cause of action make with regard to applicable remedies?

2.  Were Mason's efforts to protect the recipe for Lynchburg Lemonade reasonable?  What else could he have done?  Suppose Jack Daniel had argued that Mason's efforts were not reasonable simply because his secret got out?  Is that a good argument?  Why or why not?  What should determine whether efforts to protect a secret are reasonable under the circumstances?  What purposes or policies does the "reasonable effort" requirement serve?

3.  Can you describe in simple layperson's terms why Randle and Jack Daniel were liable in this case?  What is the gist of the wrong?  What specific acts of the defendants were wrongful, besides Randle's breach of promise?

4.  Mason might have applied for a patent on his drink recipe.  Under Section 102 of the Patent Act of 1952, "[w]hoever invents or discovers any new and useful . . . manufacture or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor. . ."  35 U.S.C. § 101.  Food and drink may qualify for patent protection if they are new and useful and meet the other requirements for a patent.

Besides being new and useful, a patentable invention cannot be "obvious" in light of all the "prior art."  See 35 U.S.C. § 103(a).  To get a patent, Mason would have to show that his drink's formulation was not obvious, at the time he "invented" it, in light of all the "hundreds" of similar drinks in the Collins family that the expert noted in this case.  Then he would have to describe his formulation, in his patent application, "in such clear, concise, and exact terms as to enable any person skilled in the art [of bartending] to make and use" it.  35 U.S.C. § 112 (first ¶).  If other drinks used the same ingredients, Mason would have to describe the precise proportions that made his drink new and nonobvious, and his description would become part of the publicly available records of the Patent and Trademark Office when the patent issued.  If someone copied his patented drink, Mason would have to show that the alleged "copy" met all the particulars of the description in his patent, including the precise ingredients and proportions.

Patent protection generally lasts 20 years from the date on which the patent application is filed.  See 35 U.S.C. § 154(a)(2).  Trade secret protection can last forever, as long as the subject matter is kept secret. (The formula for Coca-Cola is supposed to be a trade secret that has lasted well over 100 years.)  If you had represented Mason before he met Randle, would you have advised him to apply for a patent on his drink?

5.  A mixed drink is hardly a "high-technology" item.  Although sophisticated technology also can be a trade secret, so can many ordinary things, such as reciptes and customer lists. See Ohio Uniform Trade Secrets Act, infra, § 1333.61(D) (definition of "trade secret").  What social policies support protecting a wide range of things under the rubric of "trade secrets"?  What economic policies?  Is society as a whole better off because Mason and those similarly situated can win suits like this?  Why or why not?
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