According to a recent court decision, the short answer is “no” if all elements of the trade secret are disclosed in the patent application. However, the decision also notes that certain elements of an invention — such as improvements, elements that are not expressly disclosed in the application, and unique combinations of previously-disclosed elements — can be protected by trade secret law.
In Tewari De-Ox Systems Inc. v. Mountain States/Rosen L.L.C., the plaintiff (Tewari) and the defendant were parties to a nondisclosure agreement. Under the agreement, Tewari showed the defendant a packaging process and oxygen evacuation method to extend the shelf life of meat. Tewari also filed a patent application relating to its process. The patent application published, but it never issued as a patent.
Tewari sued the defendant for breach of contract and misappropriation of trade secrets. After the lower court granted summary judgment in favor of the defendant, the U.S. Court of Appeals for the 7th Circuit considered whether the defendant waived trade secret protection by including details about the meat-packing method in a published patent application. As trade secrets are governed by state law, the court applied Texas law and noted that:
“There can be no dispute that a published patent application is readily available [and] information that is generally known or readily available . . . is not secret for the purposes of trade secrecy.”
However, the Court also noted that a trade secret is “one of the most difficult and elusive concepts in the law to define,” and that defining a trade secret requires a full presentation of the facts.
Although the patent application disclosed many details about Tewari’s process, under the nondisclosure agreement Tewari demonstrated to the defendant additional methods that would adapt Tewari’s process to the defendant’s “open nozzle” meat packing system. Nothing that “unique combinations of previously-disclosed elements” can be trade secrets, the 7th Circuit stated that Tewari raised an issue of material fact as to whether the additional methods were trade secrets.
While acknowledging that a “simple and obvious change” to a known process is not a trade secret under Texas law, the Court said that the question of whether Tewari’s additional methods were trade secrets was a question of fact for the jury to decide, and not an appropriate subject for summary judgment.