AIA: Redefining What is "Prior Art"

Posted on October 31, 2011 by Brian Wm. Higgins

          Under the America Invents Act (AIA), any evidence showing that an invention was "in public use, on sale, or otherwise available to the public" can be used as prior art, even if that evidence relates to events that take place outside the U.S. Thus, companies and inventors who publicly use or offer their inventions for sale outside the U.S. could be barred from obtaining patent protection for those inventions in the U.S., depending on the circumstances.  That change in the patent law is intended to harmonizes U.S. law with the patent laws of other countries.  As discussed below, the AIA make many other changes to the definition of "prior art."

          The AIA also abolishes the 1-year statutory bar under 35 U.S.C. 102(b), making any prior disclosure of an invention, with few exeptions, eligible as prior art. The new law excludes the inventor’s own disclosure of his invention and any subsequent disclosures of the inventor's own invention as prior art.  While that may seem to encourage early disclosure by the inventor, any public disclosure of an invention could affect an inventor's ability to obtain protection outside the U.S., since many other countries still require absolute novelty and do not grant a grace period for public disclosure, even by the inventor. 

          Under the AIA, it is not entirely clear whether the on-sale bar is included in the one year grace period. A colloquy on the floor of the U.S. House of Representatives during debate over the AIA indicates that Congress intended that the grace period also include "on sale" activity.

          The AIA expands the prior art common ownership exception under 35 U.S.C. 103(c).  Under the current law, a prior published patent application would not be eligible prior art to show a claimed invention is obvious "where the subject matter [of the published application] and the claimed invention were, at the time the claimed invention was made, owned by the same person or subject to an obligation of assignment to the same person."  The new law, however, would remove any published patent application or patent as prior art if "the subject matter disclosed [in the published application or patent] and the claimed invention, not later than the effective filing date of the claimed invention, were owned by the same person or subject to an obligation of assignment to the same person."  Under those circumstances, the earlier published application, if co-owned, will not be prior art under both an anticipation and obviousness inquiry.

          The AIA also prohibits the patenting of any tax preparation invention by deeming those inventions indistinguishable from the prior art. This provision is already effective and applies to all pending U.S. patent applications. The provision excludes, however, computer programs or systems for preparing tax. As such, it may be possible to formulate a tax preparation invention as a computer program or system to avoid the statutory prohibition.

 
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Theft of Trade Secrets: Causes of Action in Maryland

Posted on October 3, 2007 by Brian Wm. Higgins

     Earlier this week, several sources reported that the Justice Department had announced an indictment of two Silicon Valley engineers who allegedly tried to steal trade secrets for computer chip designs (the indictment also included counts of economic espionage) (see details at the Ethisphere blog or the National Security Crimes Blog by Douglas McNabb). The indictment underscores the need for companies to go beyond just calling something a trade secret: steps must be taken to implement a comprehensive program to identify and adequately protect a company's most sensitive data (90% of which is usually in an electronic form according to published literature). However, even with the best safeguards, employees may try to steal trade secrets for personal gain. Fortunately, those who take trade secrets will usually leave behind a trail that electronic forensic experts can find.

     In Maryland, trade secrets are covered under the Maryland Uniform Trade Secrets Act (MUTSA). For purposes of the MUTSA, a trade secret is something that derives independent economic value 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. A company believing its trade secrets have been stolen by employees or other entities may seek relief in civil court by asserting one or more of the following causes of action in Maryland:

  • Misappropriation of trade secrets
  • Breach of contract (usually referring to a non-disclosure agreement or covenant not to compete that an employee signed)
  • Breach of fiduciary duty
  • Misappropriation of products
  • Intentional misrepresentation
  • Constructive fraud
  • Tortious interference with prospective advantage

     The Maryland State Bar Association (MSBA) Intellectual Property Section recently presented "Theft of Intellectual Property, Trade Secrets and Proprietary Information: Forensic Traces to Make Cases" by Jeff Gross (audio available here), which provides some useful information about tracking thieves' footsteps (you have to skip the long historical introduction to get to the good parts of the audio). Mr. Gross, who is with Computer Forensic Associates, Inc., comments that electronic assests are horrendously easy to steal, easy to transfer, and simple to hide. But with today's computer forensic tools, thieves can usually be identified from their actions involving use of computer systems.

Comments:

  • The Trade Secret Blog provides a good summary of the indictment of the two Silicon Valley engineers (which borrows heavily from the article Two NetLogics Employees Indicted For Economic Espionage)

  • Cite: Maryland Uniform Trade Secrets Act (MUTSA), Md. Code Ann., Com. Law §11-1201(e)

  • Just becasue something qualifies as a trade secret under MUTSA, it is not a protectable trade secret if its holder fails to take reasonable efforts to maintain its secrecy. Factors that Maryland courts have used to determine whether information is a trade secret include the extent to which the information is known outside of one’s business, the extent to which the information is known by employees and others involved in the business, the extent of measures taken by the owner of the secret to guard the secrecy of the information, the value of the information to the owner and to his or her competitors, the amount of effort or money expended in developing the information; and the ease or difficulty in which the information could properly be acquired or duplicated.
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