Troy & Schwartz Attorneys-At-Law

On Feb. 24, 2022 in a 6 to 3 decision, the U.S. Supreme Court held that mistakes of law – and not only mistakes of fact – could protect copyright infringement lawsuit plaintiffs from losing their copyrights on grounds of inaccurate registrations.  The decision is a win for creators who own registered copyrights.  Remember, since 2019, copyright registration is an absolute requirement for commencing a copyright infringement lawsuit as the result of the Supreme Court’s decision in Fourth Estate Public Benefit Corp. v Wall-Street.com, LLC.

Background of the Lawsuit

In 2020 Unicolor, a fabric design company, sued fashion giant Hennes & Mauritz, LP (H&M) for copyright infringement of Unicolor’ copyrighted 2-dimensional fabric designs.  Unicolor’ registered copyright stemmed from its copyright registration for 31 separate designs allegedly included in the same unit of publication.  The Copyright Office’s regulations governing the submission of applications provides that a single application may cover multiple works only if they were “included in the same unit of publication.” The opportunity to submit multiple works in one application can save the applicant considerable filing fees.  H&M argued that Unicolor had failed this requirement by making some of the designs exclusively available to certain customers while offering the rest to the general public.  That is, the designs were not included in the same unit of publication.

The Relevant Statute

The Copyright Act includes the following statements under section § 411(b):

(1)  A certificate of registration satisfies the requirements of this section and section 412, regardless of whether the certificate contains any inaccurate information, unless—

(A) the inaccurate information was included on the application for copyright registration with knowledge that it was inaccurate; and

(B) the inaccuracy of the information, if known, would have caused the Register of Copyrights to refuse registration.

(2) In any case in which inaccurate information described under paragraph (1) is alleged, the court shall request the Register of Copyrights to advise the court whether the inaccurate information, if known, would have caused the Register of Copyrights to refuse registration.

The Decision

The Unicolor case involves interpretation of § 411(b)(1)(A), commonly referred to as a safe harbor provision.  The District Court determined that because Unicolor did not know when it filed its application that it had failed to satisfy the “single unit of publication” requirement, Unicolor copyright registration remained valid by operation of the safe harbor provision.  The Ninth Circuit disagreed and instead opined that the safe harbor provision only applied to good-faith mistakes of fact, not law.  Unicolor had known the relevant facts surrounding publication of the designs; its knowledge of the law (or lack   thereof) was irrelevant

The U.S. Supreme Court sided with the District Court by holding that 411(b)(1)(A) is applicable to both mistake of law and mistake of fact.  As such, lack of either factual or legal knowledge can be the basis for the application of the statute’s safe harbor provision.

In finding for Unicolor, the Court found that cases decided before § 411(b) was enacted “overwhelmingly” found that inadvertent mistakes in copyright registration did not invalidate copyrights.  The court also referred to the legislative history which suggested that § 411(b) was enacted to make it easier, not more difficult, for nonlawyers to obtain valid copyright registrations.  One of the goals behind the new section was to “improve intellectual property enforcement in the United States and abroad.” H. R. Rep. No. 110–617, p. 20 (2008).  Section 411(b) did so in part by “eliminating loopholes” that could be exploited to block otherwise valid copyrights.

H&R had argued that copyright owners would be allowed to avoid the consequences of an inaccurate application by claiming lack of knowledge.   The Court emphasized that courts need not accept the copyright owner’s claim that it was unaware of the relevant legal requirements.  For example, willful blindness may support a finding of actual knowledge on either the issue of law or fact, triggering the application of 411(b)(1)(B).

The Court’s opinion did not address section 411(b)(1)(B) which states: “the inaccuracy of the information, if known, would have caused the Register of Copyrights to refuse registration.  Section 411(b)(2) makes it clear that any decision concerning the validity of a registered copyright is not made by the court but by the Register of Copyrights.  This step is generally commenced upon the court’s grant of a defendant’s motion to Submit the Matter to the Register of Copyright and then submitting the matter to the Register of Copyrights. Based on Unicolor, the Register of Copyrights should only be involved if the court finds that the copyright registrant had knowledge of the facts and/or law associated with registration’s error(s).    In contrast to registered trademarks and patents, a federal court has no right to invalidate a registered copyright.  It’s up to the Register of Copyrights to determine what impact, if any, the misinformation had on the Copyright Office’s decision to register the copyright to the designated owner in the first place.

Take-Home Points

The decision helps bolster the validity of copyright registrations involving errors made by the applicant.  In the commentator’s opinion, applicants should not automatically assume that all errors are “excusable.”  Nevertheless, it’s still a good idea to ensure that all information presented in copyright registration applications is accurate to start with to prevent a situation where the defendant draws out the case by asserting the registration is invalid.  Also, where an attorney files the application on behalf of the applicant, will the attorney’s error be “excused” for errors of law?

On the other hand, defendants who think they can get away with infringement by trying to invalidate the plaintiff’s registered copyright in a future infringement lawsuit should think twice.  This approach is akin to a shoplifter blaming the retailer for not having shoplifting preventive measures in place.

THANK YOU FOR YOUR INTEREST IN THIS BLOG.  WE HOPE IT WAS INFORMATIVE.  HOWEVER, IT IS PRESENTED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL ADVICE!

Intellectual property law is a complex area of the law.  Contact us at 305-279-4740 for a complimentary strategy session on protecting your inventions, creative works, brands, and proprietary information through patents, copyrights, trademarks and trade secrets or our litigation services involving intellectual property disputes.   We represent both individuals and business entities.  Our mission is to serve innovators and creators in protecting the fruits of their hard work and ingenuity through our Client Services Creed:  Conscientious, Rigorous, Energic, Empathetic, and Diligent legal services. 

© 2022 by Troy & Schwartz, LLC

Several states including Delaware, Wyoming, and Nevada are popular states for incorporation and limited liability company formation for privacy and taxation reasons.  But what if the corporation or LLC will actually be transacting business in Florida and not in its state of incorporation/formation?

Under Florida law, such LLCs or corporations (known as foreign LLCs or corporations, collectively foreign entities) may not transact business in Florida until they obtain a certificate of authority from Florida’s Department of State.  Over the years, I have encountered several foreign entities that have not obtained this certificate even though they were clearly a business operating in Florida.  In one case, the entity could not file an breach of contract lawsuit until it had received its certificate of authority and paid a fine.

Both incorporation and limited liability formation in all states is relatively simple and typically carried out by a non-attorney.   As for Florida, the failure of the foreign corporation to early-on obtain a Florida certificate of authority is generally the result of unfamiliarity with the law by non-lawyers.

According to Florida law, both foreign corporations and limited liability companies must not transact business in Florida until it obtains a certificate of authority from the Department of State.   See §607.1501 of the Florida Corporations Statute and §605.0905 of the Florida Revised LLC Act.   Neither statute provides guidance as to what constitutes “transacting business.” Both statutes do, however, provide a non-exhaustive list of activities which do not constitute “transacting business” such as:

• holding managers’ meetings or members’ meetings (LLC) or board of directors/shareholders meetings (corporation);
• maintaining bank accounts;
• collecting on debts or enforcing mortgages;
• transacting business in interstate commerce;
• conducting an isolated transaction that is completed within 30 days and that is not one in the course of repeated transactions of a like nature;
• owning or controlling a subsidiary corporation or LLC incorporated in or transacting business in Florida;
• owning real estate or personal property located in Florida that produces no income (the statutes make a specific exception for income-producing property).

As for “transacting business,” the following activities are examples of transactions that likely require registration:

• Having a physical presence in the state such as a business office, warehouse, or store;
• Having employees or payroll in Florida;
• Applying for and obtaining a business license in Florida.

Are there any ramifications if a foreign entity needs a certificate of authority to transact business, but does not get one?  Legally, the entity may not file a lawsuit in a Florida court, and if a lawsuit is filed, the court may stay the proceeding until the unregistered foreign entity obtains a certificate of authority. The unregistered entity may, however, defend the lawsuit. In addition, any contracts executed by the unregistered entity are still valid, notwithstanding the lack of a certificate of authority. By transacting business in Florida without a certificate, the entity is deemed as a matter of law to have appointed the Secretary of State as the company’s agent for service of process.  Finally, the entity is liable to the Secretary of State for civil penalties for each year (or part thereof) that it operates without a certificate of authority.

Practically speaking, an entity that is conducting its business operations within Florida, entering into contracts executed in Florida with other Florida entities or Florida residents, and/or is earning money in Florida from Florida businesses/residents should register the foreign entity in Florida.  Florida banks and financial institutions may also prefer, even require, that the foreign entity be registered as a Florida foreign entity.

The forms for registering a foreign corporation or LLC are relatively straight forward.  Note that you must provide a Certificate of Existence, no more than 90 days old, from the original state of entity formation.  A Florida registered agent is required.  You are also required to list the date that your entity first started transacting business in Florida.  If you have been conducting business as a foreign corporation before obtaining a certificate authority, you may be responsible for any back Florida Corporate Income Tax and a penalty.

If you are registered corporation, you will be subject to Florida Corporate Income Tax based on Florida-specific adjustments for corporations doing business outside of Florida.  LLCs themselves do not pay income taxes, only their members do.  Florida is one of the few states which does not have a state income tax for individuals.  Accordingly, Florida LLC members will not owe state income tax on their LLC earnings.  Some states, but not Florida, impose a separate fee on LLCs for the privilege of doing business in the state.

Finally, note that the foreign corporation or LLC must have a name distinguishable from other companies already registered in Florida.  Otherwise, the registrant will be required to register an alternative name to use within the state for a foreign corporation/LLC Florida qualification action.

              THANK YOU FOR YOUR INTEREST IN THIS BLOG.  AS USUAL, THE CONTENT IS NOT LEGAL ADVICE & IS PROVIDED SOLELY FOR INFORMATIONAL PURPOSES. 

© 2022 by Troy & Schwartz, LLC

This September 2021 decision addresses complex aspects of Copyright Law involving both copyright ownership issues and termination rights wherein the Creator of a work can reclaim rights in an originally assigned copyright 35-40 years after the work’s assignment.  The commentator has previously posted blogs discussing the importance of properly categorizing the work’s Creator as a work-for-hire under the Copyright Act.   Failure to do so may result in a situation wherein the plaintiff in a copyright infringement case may actually not be the owner of the registered copyright. Under such circumstances, a copyright infringement case may be dismissed because the plaintiff, as a non-owner, may not have standing to sue for copyright infringement.

The public policy underlying the Copyright Act’s termination right under 17 U.S.C. § 203 is to give Creators a second chance when the work they licensed or sold (assigned) becomes more valuable than anticipated. Improper classification of the Creator also impacts a Creator’s termination rights because the Creator of a work-for-hire cannot invoke a termination right. Disputes over termination rights often turn on an analysis of the nature of the Creator’s relationship to the work.

The defendant in Horror (Victor Miller) was the screenplay writer of the 1980 horror movie “Friday the 13th”.   The screenplay was created for Manny, Inc. which later transferred its copyright in Miller’s screenplay to Georgetown Productions, Inc.  It was Georgetown Productions that registered the screenplay as a work-for-hire.  The rights were later acquired by Horror, Inc.  In 2016, Miller notified both the “first” company which had retained his screenplay writing services decades before and Horror, Inc. that he planned to exercise his termination rights.

Horror filed an action in the U.S. District Court of Connecticut, seeking a declaration that the screenplay was a work-for-hire by an employee and not subject to termination. The district court disagreed with Horror’s position, finding that Miller had instead been an independent contractor and the screenplay did not qualify as a work-for-hire.  Horror appealed. The Second Circuit affirmed the lower court’s decision.

Employment Status Analysis

In arriving at its “independent contractor” conclusion, the Second Circuit discounted the plaintiffs’ position that Miller had been an employee at the time he wrote the screenplay.  The plaintiffs’ argument focused on Miller’s membership in the Writers Guild of America (WGA) at the time he was hired to create the screenplay as grounds for his designation as an employee and the registered work’s classification as a work-for-hire.   Miller’s original agreement with Manny was conducted under a collective bargaining agreement governing WHA’s writers and signatory employers like Manny.

The Second Circuit concluded that Horror wrongly relied on labor law’s framework defining “employee.” Instead, Copyright law controls the analysis; its concept of employment is grounded in the “common law of agency” and serves different purposes from labor law.

The Second Circuit relied on the Supreme Court’s 1989 seminal case of Community for Creative Non-Violence v. Reid where the High Court laid out the scope of employment framework for establishing copyright ownership under 17 U.S.C. § 102.   In discussing CCNV, the Second Circuit noted that “the Copyright Act uses a more restrictive definition of employment” in order to protect authors whereas labor law construes employment broadly “to serve workers and their collective bargaining interests and establishing rights” including safety and pay rights.  Thus, Miller’s membership in the WGA and Manny’s status as a signatory employer to their collective bargaining agreement did not create an employment relationship that converted the screenplay into a work-for-hire.

In determining that Miller was an independent contractor who had the right to terminate Horror’s copyright, the Second Circuit considered CCNV’s enumerated factors for establishing whether the Creator of the work was indeed an employee:

• Miller’s previous screenwriting employment and graduate degree in theater established his expertise and skill in screenwriting requiring little oversight/direction;
• Manny, Inc. never provided Miller with typical employment benefits such as health insurance of paid vacation time;
• Manny, Inc. never withheld or deducted any taxes or social security payments from the two lump sums he received for his screen-writing services.
• Nothing in Miller’s employment agreement with Manny, Inc. could be construed as granting Manny the right to assign additional projects.
• Miller was the only person credited as the screenplay writer.

Certain types of commissioned works may also qualify as a work-for-hire under the Copyright Act when the Creator is an independent contractor and not an employee but only if the Creator and the commissioning party have both signed an agreement stating that the work is a work-for-hire. Additionally, the work must fall into one of the Copyright Act’s nine enumerated classifications for this type of work-for-hire.  Screenplays are not one of the enumerated classifications. Here, the agreement between Manny and Miller never specified that the screenplay would be a work-for-hire.  Even if the screenplay would have qualified as one of the enumerated classifications, the absence of the required agreement eliminated any chance of establishing the screenplay as a work-for-hire under the “independent contractor” scenario.

As a result of the Second Circuit’s decision, Miller now has the right to terminate his copyright.  He will presumably try to negotiate a licensing agreement seeking royalties commensurate with the movie franchise’s success.

Comments

Copyrights enjoy a long lifetime but  nobody has a crystal ball.  Parties who are contemplating obtaining the rights to a copyrighted work(s) should consider the money-making potential with the knowledge that the work’s Creator (including his/her estate) could seek to terminate the copyright 35-40 years into the future. Parties who are acquiring the rights as a successor-in-interest should consider the possibility of termination and determine if the work was a bona fide work-for-hire: 1) by an employee; or 2) via a “work for hire” agreement signed by both the Creator/independent contractor and the hiring party for certain classifications of works.   Why?  Because a “true” work-for-hire is not eligible for termination.  On the other hand, independent contractors may not wish to have their work designated as a work-for-hire and instead assign the rights in return for monetary compensation to preserve their termination rights.

As the Horror decision shows, a registration which specifies a work as a work-for-hire does not necessarily make it so. Had this been a copyright infringement lawsuit brought by Horror against another party, chances are that an astute copyright infringement attorney would have challenged Horror’s ownership and standing as the owner of the registered copyright.  Why?  Because the Creator was never an employee.  Nor would the work  have likely qualified as a work-for-hire under the “independent contractor” alternative provided for under the Copyright Act.

Copyright law is complex even though at first blush it appears relatively simple due to the ease of completing a copyright registration application.  However, numerous pitfalls abound for the unwary and even the issuance of a registration does not mean that the registration is absolutely immune from problems as the Horror decision demonstrates.

Copyrights can be extremely valuable intellectual property assets.  Make sure you understand the pitfalls to avoid problems down the road where your ownership may be questioned or the Creator may have the right to exercise termination rights.   Contact us for a complimentary consultation on your copyright matters.

WE THANK YOU READING THIS BLOG AND HOPE YOU FOUND IT INFORMATIVE.  HOWEVER, THE CONTENT IS PROVIDED FOR INFORMATION ONLY AND DOES NOT CONSTITUTE LEGAL ADVICE OR AN ATTORNEY-CLIENT RELATIONSHIP.  

©2021

Troy & Schwartz, LLC

Where Legal Meets Entrepreneurship™

(305) 279-4740

The Eleventh Circuit’s reasoning in the case this blog summarizes is encouraging for any tech company that licenses access to its proprietary information or makes some part of it publicly available.  The decision holds that under Florida’s Uniform Trade Secret Law, these partial exposures of trade secrets to the public may not be fatal to a claim for trade secret misappropriation. 

There is no question that the law continues to evolve in response to new technological developments.   For example, corporate espionage has become easier in these days of computer hacking, thereby increasing the possibility of the theft of valuable proprietary information such as trade secrets.  Does Florida’s Uniform Trade Secrets Act (FUTSA) adequately protect the trade secret owner from “high tech” misappropriation of trade secrets?  The Eleventh Circuit Court of Appeals said yes in its 2020 decision in Compulife Software, Inc. v. Newman, et al., 959 F.3d 1288 (11th Cir. 2020).   The court held that the statute’s verbiage was indeed applicable to this “industrial espionage” case.  The court also solidified the FUTSA by clarifying the definition of misappropriation.

Plaintiff Compulife Software, Inc. sells access to its online databased of insurance premium information, which synthesizes publicly available insurers’ rate tables using its proprietary method and formula.  It also provides life insurance quotes sourced from its online database.  The data base is not static but consistently updates with current information about life insurer’s rate tables and allows for direct comparison across dozens of providers.  Compulife licenses access to the data to its customers who are primarily life insurance agents who in turn seek to provide reliable insurance rate estimate to policyholders.

Interestingly, the lawsuit originating in the Southern District of Florida, did not include alleged violations of the Computer Fraud and Abuse Act (“CFAA”), the most commonly applied federal law to web scraping. Indeed, plaintiff refrained from pursuing many of the common claims that often appear in web scraping litigation, such as trespass to chattels, conversion, tortious interference with a contract, and unjust enrichment.

The defendants and Compulife are in direct competition.  The lawsuit resulted from Compulife’s allegations that the defendants gained access to its database by falsely purporting to work for Compulife’s licensed customers, hiring a hacker to scrape data from Compulife’s database, and then using the scraped data to generate life insurance quotes on their own websites.  Not surprisingly, the court described the case as one involving high-tech corporate espionage.

Website scraping using software programs known has “bots” has been quite common and is often considered legitimate.  “Bad bots,” however, fetch content from a website with the intent of using it for purposes outside the site owner’s control.  “Bad bots make up 20 percent of all web traffic and are used to conduct a variety of harmful activities, such as denial of service attacks, competitive data mining, online fraud, account hijacking, data theft, stealing of intellectual property, unauthorized vulnerability scans, spam and digital ad fraud.”  See https://www.imperva.com/blog/is-web-scraping-illegal/.

The FUTSA requires the plaintiff to demonstrate that it: 1) possessed a trade secret; and 2) the secret was misappropriated.  The magistrate in the district court did find that Compulife’s database contributed a trade secret but that the trade secret had not been misappropriated. The magistrate’s reasoning?  Compulife had not identified what legal duty the defendants had violated.

The Eleventh Circuit found the magistrate’s reasoning erroneous.  Under the FUTSA, a trade secret can be misappropriated by either acquisition, disclosure, or use.  Compulife had alleged misappropriation by acquisition and use.   Relying on the FUTSA’s own wording, the court noted that there are several varieties of misappropriation by use that do not depend on the existence of any external legal duty.  Citing Fla. Stat. § 688.002(2)(b)1, 2a, and 3, the court explained that “[w]hen for instance, a defendant knows that his knowledge of a trade secret was acquired using ‘improper means,’ or that he has acquired knowledge of a trade secret ‘by accident or mistake’ and still uses it, such use is actionable misappropriation.”  “Improper” is defined by the statute as means including theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means.  The court concluded that there was enough evidence that the database had been used by either improper means or accident or mistake and that these misappropriation theories must be determined before the court can dismiss a trade secret misappropriation claim.

The district court’s magistrate had also erred by finding that because the individual insurance quotes on Compulife’s website that the hacker scraped were publicly available, the database from which those quotes were sourced could not have been misappropriate by acquisition.  The Eleventh Circuit disagreed and reasoned that even if the publicly available individual quotes did not merit trade secret protection, “taking enough of them must amount to misappropriation of the underlying secret at some point.  Otherwise, there would be no substance to trade-secret protection for ‘compilations’ [of data] which the statute clearly provides.  See Fla. Stat. § 688.002(4).

The court also concluded that the method of acquisition could determine whether the taking of the publicly available quotes constituted misappropriation.  Here, the defendants did not merely manually access quotes from Compulife’s database wherein such manual copying would likely never constitute improper means.  Instead, the defendant’s usage of a bot to collect an otherwise infeasible amount of data may well constitute misappropriation – in the same way that using aerial photography may be improper when a secret is exposed to view from above.  Citing E.I. Dupont de Neumours & Co. v. Christopher, 431, F.2d 1012, 1014 (5th Cir. 1970), a case that had nothing to do with the difficult technical issues courts are asked to address today.  The court vacated the magistrate’s dismissal of the misappropriation by acquisition claim and remanded the case.

CONCLUSION

The case is expected to have ramifications in the area of trade secret law by allowing plaintiffs to claim that usage of their “website” publicly presented trade secret information comprises trade secret misappropriation.  Generally, publicly available information has not been deemed a trade secret.  This commentator opines that the decision will not defeat the need for a case-by-case factual analysis.  Relying on a 50-year-old non-tech case in support of their decision, the Compulife court clearly felt that that the defendants had “done the plaintiff wrong” and should be held accountable.  The reach of the decision remains to be seen.    It is therefore strongly recommended that any lawsuit involving trade secret misappropriation also includes counts such as those listed above in the event the claim for trade secret misappropriation fails.

THANK YOU FOR YOUR INTEREST IN THIS BLOG.  AS USUAL THE CONTENT IS FOR   INFORMATIONAL PURPOSES ONLY AND IS NOT LEGAL ADVICE. 

Intellectual property law is a complex area of the law.  Contact us for a complimentary consultation on patents, trademarks, trade secrets, and copyrights.  Our mission is to serve innovators and creators in protecting the fruits of their hard work and ingenuity through our Client Creed:  Conscientious, Rigorous, Energic, Empathetic, and Diligent legal services which cover both transactional and litigation services.

Have a question specific to trade secrets?  Contact us for a complimentary trade secret checklist.

© 2021 by Troy & Schwartz, LLC

In Dec. 2020 the U.S. Court of Appeals for the Ninth Circuit held that the publication of a trade secret in a patent application extinguishes trade secret status.  Attia Architect PC, et al.  v. Google LLC, et al.   Architect Attia developed a system and method for automated design, fabrication, and construction called Engineered Architecture (EA).    In 2010 Attia entered into a partnership with Google wherein he disclosed his trade secrets related to the technology to Google.  A year later, Google filed patent applications related to the technology’s trade secrets.  Attia executed patent assignment agreements effectively transferring any rights in the patents to Google.  The patent applications were published 18 months from the filing date pursuant to 35 U.S.C. § 122(b)(1)(A) making the alleged trade secrets publicly available.  Google then allegedly excluded Attia from the project and used EA to create a platform for use by building professionals to streamline the design process by relying on artificial intelligence.

Attia sued Google for trade secret misappropriation under California’s trade secrets statute and the federal Defend Trade Secrets Act (DTSA). The district court dismissed his federal claims with prejudice and declined to exercise supplemental jurisdiction over state law claims.  Under both California state trade secrets law and the DTSA, the disclosure of the alleged trade secrets in the published patent application publication extinguished their status as protectable trade secrets.  (Click here for a previous blog concerning the same decision which  addressed another issue involving the DTSA). Nor was this a situation where Google had filed the patent applications without Attia’s permission.

Is it possible for trade secrets and inventions to co-exist?  Maybe.  Inventors may try to maintain what they as deem as trade secrets by failing to disclose key elements of the invention in the patent application and specification.  This approach can be difficult to navigate because inventors may risk invalidating a patent by withholding critical information from the patent examiner during prosecution of the patent.   But see Pike v. Texas EMC Management, LLC (Texas state appellate court finding that EMC had “purposely excluded certain information” from its patent application in order to maintain it as a trade secret and was thus entitled to maintain its claim against Pike for trade secret misappropriation.

Any information disclosed in a patent application publication or issued patent, is by definition, published and not subject to trade secret protection.   If the invention disclosed in a patent application is or will not be the subject of a foreign application, the patent applicant can file a non-publication request under 37 CFR 1.213(a) to prevent its publication 18 months later after the filing date.  For utility applications relying on the filing date of a provisional patent application (PPA), the clock starts ticking from the PPA’s filing date.  The non-publication request will allow the application to be maintained as a trade secret over the invention during the patent application prosecution process which can take many years.

If a patent does not issue, trade secret protection will continue until when and if the trade secret(s) become publicly available, through e.g., the inventor’s failure to maintain the trade secret in confidence.  If, on the other hand, the examining attorney concludes that claims are patentable, the inventor can make the determination as to whether issuance is “worth” giving up trade secret rights in the published patent document by deciding to withdraw the patent from issuance under 37 C.F.R. § 1.313.

Take Aways

• Dlsclose any trade secrets related to your invention to your patent attorney.  Ask the attorney whether inclusion of the trade secrets in the patent application is essential to meet the USPTO’s invention disclosure requirements.
• Consider filing a non-publication request providing you have no intention of filing a foreign application. If you do end up filing a foreign patent application, remember that that your U.S. patent application may also become subject to publication.
• Be sure to continue safely guarding your trade secrets quite apart from any confidential patent application.  Trade secret protection is an on-going endeavor
• Contact us for a complimentary trade secret checklist to get you started in understanding trade secret protection.

THANK YOU FOR YOUR INTEREST IN THIS BLOG.  AS USUAL THE CONTENT IS FOR   INFORMATIONAL PURPOSES ONLY AND IS NOT LEGAL ADVICE.

Intellectual property law is a complex area of the law.  Contact us for a complimentary consultation on patents, trademarks, trade secrets, and copyrights.  Our mission is to serve innovators and creators in protecting the fruits of their hard work and ingenuity through our Client Creed:  Conscientious, Rigorous, Energic, Empathetic, and Diligent representation.

May you and your loved ones stay safe & be well during these challenging times.

© 2021 by Troy & Schwartz, LLC

Where Legal Meets Entrepreneurship™