Why should companies considering trade secret litigation consider their patent portfolios? After all, trade secrets, by definition, are secret. They have value in the marketplace by virtue of not being disclosed. And like the formula for Coca-Cola, that value can continue perpetually as long as the secrecy of trade secrets is maintained. Patents, on the other hand, represent a limited monopoly granted to the patent-holder in exchange for an enabling disclosure of the patented invention, a disclosure sufficient to enable those skilled in the art to practice the invention. Of course, this public disclosure requirement for patentability destroys secrecy. This means that once the invention is disclosed in a published patent or application, it cannot be subject to trade secret protection. In the context of a litigation concerning whether a claimed trade secret is covered by a patent, the interface between trade secret protection and patent protection can become existential. The defendant may contend that once the claimed trade secrets found their way into the patent’s enabling disclosure, they lost any trade secret protection. The plaintiff will try to delineate sharply between technology covered by the patent and its disclosures, and technology that remains undisclosed and thus properly subject to trade secret protection. So a proper understanding of the interplay between trade secret protection and patent protection can be critical to the outcome in a trade secret case.
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Ixchel v. Biogen: California B2B Noncompetes Do Not Per Se Violate B&P Section 16600, and Are Instead Subject to Rule of Reason
Business-to-business contracts often concern trade secrets. Contracts such as NDAs, joint development agreements, license agreements, vendor agreements, and other commercial agreements commonly contain restrictive covenants relating to the protection of trade secrets or other protectible interests. But when do these terms constitute an illicit restraint of trade under California law? The California Supreme Court just addressed this very question in Ixchel Pharma v. Biogen , holding that most B2B agreements are governed by the common law rule of reason, instead of the flat prohibition on noncompetes applicable to the employment context.
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Members Of The Fashion and Retail Industry: Trade Secret Claims Are In Vogue These Days
Given the prevalence of trade secret misappropriation litigation among members of the fashion, beauty, and retail industry, those in that industry should (1) take care to protect their trade secrets from misuse by others and (2) consider steps to try to reduce the risk of misappropriation claims against them by others. Both situations – loss of a valuable trade secret and burdensome litigation – can be devastating to a business. We offer here some potential measures that businesses can take to attempt to avoid such undesirable situations.
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