This is the
fifth issue of Directions, a newsletter from TechRoadmap Inc. discussing intellectual property issues and
ideas. With everyone enjoying summer vacations we have made this a
double month issue - July and August. Monthly issues resume in
September. As always, we hope to stimulate you to examine and improve your own IP
In this month's issue
we look at the dark side... that is, what may happen when we decide to
keep the world in the dark concerning our invention. Most everyone knows
that the patent system is set up as a kind of Faustian bargain; you can
operate as a very limited monopoly, preventing others from practicing
your invention IF you are willing to teach everyone, including your
competitors about your invention. But what if you don't like that deal?
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Mass High Tech:
The main article in May's Directions was picked
up by Mass High Tech for inclusion in their July 9th issue, as
part of the IP law feature section. If you did not receive May's Directions,
you may read the original on our web site at
it's a trade secret!
issue that many clients face is whether they will be better off applying
for a patent on their invention or trying to maintain it as a trade
secret. There are many facets to this issue ranging from who your
competitors are (and what technology approaches are they pursuing) to
how confident are you that your application will succeed.
rough rule of thumb that some people apply is that you should patent
inventions that can be easily reverse engineered and hold as
trade secrets inventions for which infringement would be hard to
identify. The logic here is pretty clear; patent things you can't
keep secret and keep secret things whose patent you can't enforce. In
this month's patent case it appears that Merck effectively followed this
rule. Reading the court decision we see that Merck patented the actual
compound that was medically effective (since a tablet can be chemically
analyzed) but elected to hold as a trade secret (at least initially) the
manufacturing process for producing "a stable solid
formulation" of the compound (since it's hard to know what process
is used inside someone else's factory).
this month's case also points out a lesser know aspect of the decision
to hold an invention as a trade secret; that you might find yourself
sued for infringement for using your own invention! Most people know
that a patent is a bargain with society; if you are willing to teach
society about your invention, society will allow you a monopoly to
practice your invention. But like Dr. Faustus we learn there is a little
more to this deal; something just a bit darker. The Appeals Court says
that when it comes to keeping a trade secret "...though there is no
explicit disclosure requirement...the spirit and policy of the patent
laws encourage an inventor to take steps to ensure that 'the public has
gained knowledge of the invention which will insure its preservation in
the public domain' or else run the risk of being dominated by the
patent of another. [emphasis added] ... Thus, prior, but
non-public inventors yield to later inventors who utilize the patent
this month's case Merck dodged that bullet when, after 5 years of
court-defined concealment, it disclosed just enough information, at
just the right time, to turn back the infringement case by having
the Apotex patents invalidated. As Apotex was entering the market (for
the same drug) Merck, either knowingly or not, released enough
additional information about their hitherto secret process to
permit reverse engineering of that process. Merck's timing was superb,
if coincidental, since Apotex's inventor admitted that the process in
question "...'immediately occurred' to him" after he learned
the just disclosed Merck information. Thus, ruled the court, the Apotex
patent was invalid because of the (now public) prior art.
were does this leave you in your dealings with the patent system? If you
want to avoid Dr. Faustus's fate (it wasn't pretty), here are some tips
to keep in mind. As always, TechRoadmap recommends consulting with your
document all inventions. Prepare a disclosure that covers all
the important aspects of the invention; who invented it, when, how
is it distinguished from the prior art, etc. These documents prepare
you to act intelligently.
trade secret candidates. Review your disclosure(s) to get a feel
for how easily a competitor could design around an issued patent.
How difficult would it be to infringe invisibly? What does the
public prior art look like (that is, how likely is anyone to get a
patent on this material)? Are other companies fishing in the same
pond? Will they be anytime soon?
a disclosure plan. If the major economic benefit of your
trade secret is achieved by being first to market, think about
disclosing your secret once you've pocketed that benefit. Or maybe
your field changes so quickly that you can plan to disclose in a
couple years. Can you find venues in which you can publicly disclose
key aspects of the trade secret without opening a floodgate of
competition? Discuss the implications of filing a patent with your
attorney, knowing it will be disclosed in 18 months. Track your
competitors - might they be patenting the same invention sometime
in the preceding article should be construed as legal advice. TechRoadmap
Inc serves as an interface between companies and their legal counsel.
When is enough, enough (disclosure, that
In Apotex v. Merck (No.
00-1272), Apotex appeals a District Court ruling in favor of Merck in
which the claims of Apotex's patents (US 5,573,780 and US 5,690,962)
were held invalid based on prior invention - in this case, prior
invention by Merck. The patents in question deal with a process for
making "a stable solid formulation" of a blood pressure
medication. Merck owns both U.S. and Canadian patents covering the
compound itself but does not own a patent covering the manufacturing
process for making it into phamaceutical tablets. Apotex's '780 and '962
patents, on the other hand, are for the manufacturing process (one for
the production for tablets and one for any "solid pharmaceutical
dosage form") and not for the compound itself.
sued Merck for infringement of its patents, but Merck won the invalidity
judgement based on the obvious and acknowledged fact that it had prior
(but unpatented) inventorship of the process - after all, Merck had been
producing the medication in tablet form since 1983, a full 8 years prior
to Apotex's claimed invention date.
argued that Merck prior invention did not apply because under the law an
inventor is "entitled to a patent unless...before such person's
invention thereof, the invention was made in this country by
another, prior inventor who had not abandoned, suppressed, or
concealed it" (emphasis added). Apotex contended that Merck had
indeed suppressed or concealed the process for making the tablets,
making it (Apotex) the legitimate patent owner.
court first addressed the question of who has what burden of proof in
cases considering suppression or concealment negating prior invention.
The court found that when a patent has already issued the presumption of
validity places a higher burden of proof on the challenger (Merck in
this case) than would be applied in, say, an interference case in which
the patent office must award the patent to the
first-to-invent-without-suppression. For cases like this one, the patent
holder need only produce evidence of suppression or concealment
"sufficient to create a genuine issue of material fact [that
suppression/concealment took place]". The prior inventor, the court
said, must rebut [the produced evidence] "by clear and convincing
evidence to the contrary."
court agreed with Apotex that they had evidence to create a genuine
issue of concealment. Merck never filed for a patent on the production
process, had produced their drug for five years before publishing the
ingredients, and could not claim that the commercially available tablets
were capable of being reverse engineered.
the court disagreed with Apotex's contention that Merck failed to rebut
this evidence. First, Apotex had claimed that Merck's disclosures of
information in an earlier Canadian case (where Merck sued Apotex for
infringement of its compound patents) were not applicable because of the
"in this country" restriction highlighted above. The court
used both the legislative history and the plain language of the law to
determine that it was only the act of invention that had to take place
in this country and that foreign disclosures of the invention were
adequate to rebut suppression or concealment.
the court found that, even though the combined failure to file for a
patent and 5 years of secrecy was indeed suppression or concealment,
nevertheless, "as long as it [Merck] 'resumed activity' (i.e.,
made the benefits of its invention known to the public) before Apotex's
entry into the field, it cannot be deemed to have suppressed or
concealed the invention within the meaning of" the law.
the court determined that, Apotex's argument to the contrary, Merck's
disclosures before Apotex's invention date were proof that Merck made
the knowledge available to the public, thereby satisfying its burden to
rebut Apotex's evidence of concealment.
US Patent office
Searchable database of all US Patents and, now, published patent
The Patent Cafe - an on-line source of interesting insights into
current IP issues.
EKMS Inc. - a company with whom
we've worked that provides a range of IP management services including
portfolio analysis, deal-making, and process improvement.