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exactly a trade secret held by another. Indeed, two or more people
can hold the very same information as a trade secret simultane-
ously. Trade secret law, in other words, protects only against theft
(or breaching condence or exceeding authority), not against
reverse engineering or independent development. Due in part to
these limitations, trade secret owners often seek to bolster their
rights by insisting on condentiality agreements as a condition to
sharing their information.
This is in stark contrast to patents. Practicing a patented inven-
tion is a strict liability offense. A patent owner has the right to
exclude others from practicing the disclosed invention, even where
the accused infringer arrived at the invention by reverse engineer-
ing or independent development.
Trade Secret and Patent Cases Are Litigated
Given some of these differences between patents and trade secrets,
it is not surprising that the two are litigated in signicantly differ-
Trade Secret and Patent Litigations Start in Different Ways
Trade secret litigation usually arises with a breach of condential-
ity. Often, the party whose condentiality has been breached does
not yet know what information has been taken and may only know
that some information was transmitted under suspicious circum-
stances, such as les being printed, purged, sent outside the company,
or downloaded. In such circumstances, only the alleged wrongdoer
will know what was taken or used, and only discovery will reveal
what information is really at issue.
The alleged breach of con-
dentiality may also constitute a breach of contract, such that both
a trade secret and a contract claim can be advanced simultaneously.
In contrast, patent litigation begins with a more concrete under-
standing of the alleged intellectual property at issue and alleged
wrongdoing. Patent cases often begin when the patent holder
learns, through the public release of a product, that another entity
is practicing the patented invention. The patent holder can then
meticulously compare the accused product or method with the
patent claims and identify which claims are allegedly infringed.
The asserted patent claims, which were already issued by the
USPTO and are presumed valid, determine the scope of intellectual
property to be enforced. The accused products or methods deter-
mine the nature and scope of the alleged infringement.
Trade Secrets Are Not Presumed to Exist or to Be “Valid”
In court, the plaintiff must show that its information meets the
requirements of a trade secret under applicable statutory or
Mark A. Klapow is a partner in and former cochair of the
Litigation Group at Crowell & Moring LLP and is based in the
firm’s D.C. oce. He litigates complex commercial disputes,
including cases involving trade secrets. He can be reached
at email@example.com. Robert B. Kornweiss is a counsel
in the Patent and ITC Litigation Group and Litigation Group
at Crowell & Moring LLP and is based in the firm’s New
York oce. He litigates patent and trade secret disputes
and provides counseling on best practices for trade secret
protection. He can be reached at firstname.lastname@example.org.
and efcient handling of trade secret disputes. Courts and liti-
gants should be aware of these differences, as well as the dangers
of conating the two areas of law.
Trade Secrets and Patents Are Fundamentally
It has been said more than a few times that only trade secrets and
patents protect ideas. And it is a truism of intellectual property
law that every patent begins its life as a trade secret. While true,
these statements suggest a false identity between trade secrets
and patents that can be misused as a basis for parallel litigation
Trade Secrets Cover a Far Broader Scope of Information
Patents protect inventions, but trade secret law protects infor-
mation.1 While in some circumstances trade secret formulas and
processes can look very much like patented inventions, trade
secrets also cover business plans, customer lists, and pricing and
supply information that has not been traditionally thought of
as intellectual property, and indeed may have more in common
with tangible property in some instances.2 Trade secrets may even
include the concept of “negative know-how”—i.e., information
about what does not work. Trade secrets, therefore, encompass an
incredibly broad body of information extending far beyond the
types of inventions that are patentable.
Trade Secrets and Patents Are Generated Differently
Unlike patents, trade secret law does not purport to serve a public
policy purpose through public disclosures. Rather, the existence
and value of trade secrets fundamentally depends on secrecy. Thus,
there is no public document, and no equivalent of government-
issued patent claims, prescribing the scope of a trade secret. Rather,
a trade secret’s existence is sometimes not realized until it has been
misappropriated, and enforceability is often established for the
rst time in court.
Patents, on the other hand, are fundamentally different because
they serve a public policy goal through public disclosure, and they
are issued ofcially by a governmental body—the U.S. Patent and
Trademark Ofce (USPTO). At the USPTO, an inventor must
publicly disclose the invention in an application and then publicly
prosecute that application to obtain a patent. Along the way, the
applicant must demonstrate that the invention is novel, nonobvi-
ous, useful, and sufciently described in the patent specication.
When the USPTO issues a patent, the inventor obtains the right to
exclude others from practicing the patented invention for a limited
time, and the patent is presumptively valid (while still subject to
court challenge). Then the patent holder has rights against anyone
who practices the invention, regardless of how they developed it
or their intention. None of this holds true for trade secrets.
Trade Secrets Confer Narrower Exclusionary Rights Than
Trade secret misappropriation occurs only through the unlawful
acquisition, disclosure, or use of the trade secret owner’s infor-
mation. Thus, one who independently develops information is
not liable for misappropriation, even if that information matches