Trade Secrets Pre Patenting

by Dennis Crouch

Although trade secrets are independently important, they are play a key temporal role in the patenting process.  The touchstone of invention is when the inventors have a full mental conception of the invention, including how to make and use the invention. But, there is typically a months-long process of moving from conception to a filed patent application.  During that time the invention is typically kept secret in order to avoid losing patent rights due to early disclosure.  And, even after the patent application is filed, applicants often keep the invention secret for as long as possible in order to maintain a competitive advantage in the marketplace.  Thus, the first public knowledge of an invention is quite often at the publication date 18-months after filing.

General rights of privacy allow a person to keep secret information without  intrusion by the government or by wrongful acts by third parties.  Trade secrecy rights are an extension of these general privacy and began as common law. These rights were further developed and codified in the various states, especially with the Uniform Law (UTSA) movement that gained traction in the 1980s and 1990s.  In 2016, the U.S. Government enacted the Defend Trade Secrets Act (DTSA) that created a federal cause of action.   Although there are some differences between the various jurisdiction, all jurisdictions agree that trade secret rights originate in the holder of information, so long as:

  1. the information is not generally known to the public;
  2. the information confers economic benefit to its holder because the information is not publicly known; and
  3. the information is subject to reasonable efforts to maintain its secrecy (by the holder).

Here is my question.  In the patent world, can we simply assume that innovation that that will become part of a patent application satisfies the economic benefit of secrecy requirement?  What is the best guide you have found for maintaining trade secret protections  for pre-patent innovations?


31 thoughts on “Trade Secrets Pre Patenting

  1. 8

    The quid pro quo is supposed to be patent rights in exchange for trade secret rights. Pre-grant publication eviscerates the inventor’s part of that bargain.

    1. 8.1

      hmmm, not quite. The applicant’s quo need NOT arise to a level of meeting all of the Trade Secret elements, and the inchoate right desired to be turned into a set – or bundle – of full property rights is simply different than items that MAY be considered a Trade Secret.

      (but I catch your drift)

  2. 7

    Question: In the patent world, can we simply assume that innovation that that will become part of a patent application satisfies the economic benefit of secrecy requirement?

    No. The focus of the inquiry regarding the independent economic value element is on whether the information is generally known to or readily ascertainable by business competitors or others to whom the information would have some economic value. Cases analyzing the independent economic value requirement typically consider the degree to which the secret information confers a competitive advantage on its owner. “Independent economic value” has been interpreted to mean that the secrecy of the information provides a business with a substantial business advantage.

    In many cases, some subject matter described in a patent application is not new. Known prior art is not secret and does not confer a substantial business advantage. Additionally, in my opinion, if the differences between the invention and the prior art are such that the invention as a whole would have been obvious, then secrecy of the invention does not provide a business with a substantial business advantage.

    1. 7.1

      It is a little more nuanced than merely a blanket statement of, “Known prior art is not secret and does not confer a substantial business advantage.

      Many items of the nature of Trade Secrets are – in bits and pieces – NOT novel and may even be obvious (as those legal terms mean), and thus may in fact (again, in bits and pieces) BE prior art.

      Prior art by its definition is known.

      The Trade Secret may be in particular combinations of what is ‘legally’ known.

      1. 7.1.1

        Definitely true. Those nuance are how people end up in court.

        It is probably fair to say that all of the ingredients in Coke or Pepsi are individually known, but the manner in which they are combined is not. The trade secret is in how the ingredients are combined even though the “bits and pieces” are (most likely) not individually novel. Obviousness in patenting is a completely different legal standard that may or may not apply.

    2. 7.2

      I think you are conflating all the knowledge imputed to the artisan with information that is generally known. Prior art is, by definition, not secret, but is often “not generally known” and we know that because people keep filing patents not knowing of the prior art that invalidates the claims. A masters thesis in a university library is prior art, but very likely unknown until you tell an examiner to go looking for it, using your application as a guide.

      1. 7.2.1

        I think that I see the distinction that you are aiming for, but may suggest that your distinction may be better cast as the difference between ‘real people” and the legal fiction known as PHOSITA.

        The ‘generally known’ that you reference is a bit like a non-legal view of the term ‘obvious,’ that is, it carries a colloquial meaning.

        Even as such though (and this is where some caution could be advanced), Trade Secret discussions are NOT entirely about being colloquial, so some care is necessary as to the terms and meanings of terms.


          I’ll explore an example:
          Your client the baker “discovers” that his cinnamon buns come out light and fluffy if he substitutes dehydrated potato flakes for about 1/4 of the flour he had been using in his cinamon buns, and sales take off. Every other baker in town makes cinnamon buns that come out like cardboard.
          Nobody in town can duplicate the recipe. Your client sells potato latkes just so every other baker in town thinks that is why the Orida potato truck shows up weekly. He mixes the dough himself, so no employees know.
          He asks you to file a patent application. You know enough about baking to confidently handle the application.
          The patent office rejects your claims, citing an 1898 cookbook entitled “Horrible New England Recipes from a Maine Aggie” which anticipates the recipe.
          In this example, the recipe is in the prior art, but nobody knows that except you and the examiner. It is not “generally known”. It is highly unlikely that another baker in town will find that old cookbook, unless you point him to it. So I say, it’s not generally known, so it could be a trade secret, even though it is “obvious” to you and the patent examiner.

          To generalize, As a patent attorney, you probably don’t know what is generally known. In some cases, you won’t know if the genesis of the problem is unknown and its disclosure will spur others to develop solutions, you won’t know if your client’s efforts will spur others to develop competitive solutions, and you won’t know it your client’s solution will spur others to develop better solutions.
          So, I say, you should treat every innovation that will become part of a patent application as though it satisfies the economic benefit of the trade secret law.
          Full disclosure: Substitution of potato flakes for flour is actually pretty well known. But you did not know that, did you?


            Actually, it is anticipated (not ‘obvious’) and it is anticipated to the world (not obvious to you and the examiner).

            Not sure where you want to go with the musings of ‘me as a patent attorney’ – none of that is really germane to the legal issues at hand.

            So, I say, you should treat every innovation that will become part of a patent application as though it satisfies the economic benefit of the trade secret law.

            Um, sure, but you already have an ethical obligation to your client on divulging information. And clearly (under my overarching default towards non-publication), your position is already captured in my views.

            And this without getting all colloquial and losing sight of the legal differences at hand (trade secret law requires MORE THAN merely ‘not generally known’), so — again — the points would be better presented staying away from using terms in a colloquial sense.

            (notwithstanding any of that, I did enjoy your story)

  3. 6

    Is the fact that a patent application is being considered (or in progress) satisfy the “independent economic value” requirement for trade secret protection?

    No. The actual standard under DTSA is:

    the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information

    The UTSA definition is:

    derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use

    The mere fact that the information is the basis for a patent application does not, by itself, create any economic value because of the information’s secrecy. There is no requirement that information in a patent application be kept secret by the inventor. In fact, the Patent Act now provides that the inventor can disclose the information within one year prior to the application. 35 USC 102(b). An invention can be patent-eligible (or so the applicant hopes) without being secret in any way.

    And, conversely, the fact that it is secret gains nothing over other patent applicants. If you are the first-to-file, then you have priority over other filers, secret or no.

    That said, inventions are required to have utility to be patentable. So if one is keeping the information secret, there is a high likelihood that there is some economic advantage in keeping it secret, especially in relation to competitors. But this would be true whether or not the inventor filed a patent application.

    1. 6.1

      Re; “the Patent Act now provides that the inventor can disclose the information within one year prior to the application.” Yes, but that [limited] U.S. grace period still remaining under the AIA is only for U.S. patents. Non-confidential disclosures of the invention prior to filing the patent application destroys all foreign patent rights for an increasingly larger-than-the-U.S. percentage of the worlds potential markets.

      1. 6.1.1

        True, but isn’t that only up to the point of the filing? If you file today and disclose tomorrow, your patent application is still good, but you have blown any trade secret rights you might have had.


          Yes, and see 2.1 below for some reasons to maintain trade secrecy even after filing, i.e., until the first U.S. or foreign application or patent publication or “laying open.”

  4. 5

    Privacy right? Like a penumbra? Something eminating from the Constitution? Err, John Locke would disagree. It’s a property right. In other words, a property right precedes government.

    1. 5.1

      Close, but not complete (there be nuance here).

      Locke’s view only gets you to the inchoate right of the innovator.

      To get to that fully vested property right, one MUST ‘finish the course’ as set out by the Branch of the Government authorized by the Constitution.

      There be a Quid Pro Quo involved in that transformation.

  5. 4

    Scary that Trade Secrets are now being talked about. I can’t imagine how bad the patent world and innovation are going to be once Chien gets her bill in to strengthen Trade Secrets.

    Going to be ugly. The only hope is that the Democrats are floundering because of so many other issues that they put this on the back burner.

    I hope everyone that is for strong patent rights, though, gets that Chien is the enemy of innovation and patents. That she is a shill for Silicon Valley monopolies.

  6. 3

    Seeing as IPWatchdog has a current series of articles dealing with AI, I thought that a (minor) note should be made for a statement in this article:

    The touchstone of invention is when the inventors have a full mental conception of the their invention, including how to make and use the invention

    This is to distinguish a prior — and improper — suggestions that a first ‘real person’ to read the inventions of another and have that ‘mental conception’ somehow “count” for making that person BE the inventor.

    1. 3.1

      It would be interesting if someone could provide an example of something that was invented but the inventors had no idea of how to make or use the invention.

      1. 3.1.1

        That misses the point.

        Most anyone may appreciate later aspects when “opening a box” and reading what someone (or something) else has put together.

        For someone who has chosen a moniker reflecting me (and my postings), this should be quite obvious to you.

      2. 3.1.2


        Different drugs may fit your question. It is not uncommon that a drug, long after FDA (or EMA) approval, is found to be useful in treating other diseases or medical conditions. The original inventors may or may not have been involved (it may even be a different company). In this case, the original inventors knew about the original intended uses, but did not know about later developed uses. This might not be quite what you’re thinking about though.

  7. 2

    Even if an application is published, the applicant can still argue the intent to keep the invention a trade secret until publication, especially if there was no other type of disclosure on the applicant’s website, trade show, etc.

    1. 2.1

      Yes, the 18 month time period between filing and publication date of a patent application for a planned commercial product [if “trade secrecy” is also otherwise maintained] can be provide valuable commercial product introduction “lead time” in some cases, and delay in “improvement” patenting by competitors. [However, some have expressed concern about disclosures via MITI and others from equivalent foreign application filings that must be done only one year later.]

    1. 1.1

      Plus One…

      … Million.

      Seeing as even the such a request may always be withdrawn at a later date without penalty, the filing of an application with non-publication request should be the default.

      I do grant that there be strategic reasons for not doing so, but those generally are exceptions that prove the rule.

      1. 1.1.1

        A non-pub requires a current intent to forego a PCT, at the time of filing the non-provisional application. What happens if you file ten applications for a company, all with non-pubs, then file ten PCT applications and non-pub withdrawals. That would look like all the non-pubs were false.
        You mght file a non-pub with some form of acceleration, thinking that if you get early allowance you will go forward with a PCT, and if you get insurmountable rejections you will abandon and rely on trade secret protection. That still belies the statement that the application “WILL NOT be the subject of an application filed… under a multinational agreement…”



          I hear you – but you appear to be over-thinking it.

          Frankly, ‘what it appears’ simply has no bearing. If one has a regular system (such as making it a default, and only at the actual event that require rescinding of the non-pub), those who may turn their noses can just go take a hike.

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