Can You Claim Trade Secret Protection Over a Patented Product?
Some might think that patents and trade secrets are mutually exclusive types of intellectual property protection, which would be partially correct. After all, a patent gives its inventor a limited right to exclude others from making, using, offering for sale, or selling the invention in exchange for the inventor’s disclosure of their idea to the public. On the other hand, a trade secret is an information not generally known to others, and the owner has to take reasonable measures to keep such information secret.[1] It would appear then that one could not obtain trade secret protection over a product that is also patented. But in Life Spine Inc. v. Aegis Spine Inc., the Seventh Circuit explained that the same product may be protected by both patent and trade secret law.[2]
Plaintiff Life Spine manufactured a spinal implant device called the ProLift, which was patented in October 2017.[3] The defendant, Aegis, contracted with Life Spine to distribute the ProLift to hospitals and surgeons.[4] Under the distribution agreement, Aegis was obligated to act as a fiduciary for Life Spine’s property and refrain from reverse engineering, sharing Life Spine’s confidential information, or using it for any non-contractual purposes.[5] Instead, Aegis gave information about the ProLift to its parent company to help the parent company develop a competing device, violating the agreement.[6] Shortly after learning this, Life Spine sued Aegis for trade secret misappropriation and breach of the distribution agreement.[7] Life Spine also requested a preliminary injunction to prohibit Aegis and its parent company from making, marketing, distributing, selling, or obtaining intellectual property rights in the competing device.[8] The district court ruled in favor of Life Spine, granting the preliminary injunction.[9]
Aegis appealed, arguing Life Spine could not have trade secret protection on a device that it “publicly discloses through patents, displays, and sales.” [10] However, the Seventh Circuit disagreed.
In its opinion, the Seventh Circuit rejected Aegis’s suggestion that trade secret protection is an all-or-nothing proposition for a given product.[11] The court noted that trade secret protection focuses on the specific information that the plaintiff seeks to protect rather than the product itself.[12] Thus, “a company can maintain trade secret protection in the undisclosed aspects of a product, even if it has publicly disclosed other aspects of the same product.” [13] While publicly available information cannot be a trade secret, the fact that a product is patented does not prevent it from being protected under trade secret law.
Following this analysis, the Seventh Circuit affirmed the district court’s finding that Life Spine’s patent did not disclose the specific information that Life Spine claimed as trade secrets. The court pointed out that what Life Spine sought to protect as a trade secret was the dimensions and measurements of the ProLift’s components rather than the product itself. Such information was “not easily derived” from its patent materials.[14] The Seventh Circuit also held that there had been no public disclosure of Life Spine’s trade secrets through its displays at trade shows or sales to hospitals or surgeons. The district court found, and the Seventh Circuit affirmed, that Life Spine had imposed sufficient confidentiality measures to preserve the secrecy of such information.[15]
The Seventh Circuit articulated the relationship between patent protection and trade secret protection in this case. While patent protection requires a disclosure of information to the public and trade secret protection requires a reasonable measure to keep the information confidential, they are not mutually exclusive. Some aspects of a product that are not disclosed in the patent may still be a trade secret. Therefore, a patented product would not be automatically excluded from trade secret protection. Thus, a takeaway from this decision would be that companies who seek intellectual property protection for their products should carefully analyze each aspect of their products. By doing so, they could limit the scope of public disclosure in patents and avoid valuable trade secrets from falling into the public domain.
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