Then in 1933 we find the Supreme Court again agreeing in U.S. v. Dubilier, 289 U.S. 178, 53 S.Ct. 554 at 557 (1933), that: "He [the inventor] may keep his in vention secret and reap its fruits Such is the inventor's option, if he so elects. "In consideration of its [the in- consequent benefit to the community, The In the famous and oft-followed INS v. AP case, 248 U.S. 215 (1918) the Supreme Court in an unfair competition case where copyright law preemption was strongly urged upon the Court, the Court applied a nonpreemption rule. There the Supreme Court held that the commercial use for profit of even published information was in the circumstance there present a "misappropriation" of "quasi-property" that was not sanctioned by the copyright [or patent] laws. -0-0-0 So we find a consistent line of Supreme Court expressions to the effect that inventors have the right to hold onto their secrets and have them protected, and to convey or license them, so long as they could hold onto the secrets or maintain them under confidential relationships. Hundreds of cases have led to whole text books Literally hundreds of cases, ranging over the various Circuit Courts of Appeal and State Supreme Courts, have sustained know-how licenses and breach of confidence causes with respect to trade secrets up to the present time. This mass of cases has resulted in whole text books on this law, such as Milgrim, Trade Secrets (1968), and Ellis Trade Secrets (1953). But what have the treatises on patent law said on the topic? -16 In 1890 the treatise authority of the day wrote on patents and their relation to trade secrets: "As the right of an inventor to his secret invention and to a remedy for the wrongs by which his property therein is injured, are not dependent upon the provisions of Patent Law, they exist equally whether the invention is or is not in its nature patentable. "Numerous products of inventive skill "If the creator of these unpatentable ་་ The 1965 revision of Deller's Walker on Patents, being the second revision by Deller, recites in Vol. 4 at pages 4-5: "An inventor has a natural right, So spoke one of the earliest (Robinson 1890) and the latest (Deller, 1965, revising Walker), of patent treatise writers, on the patent-trade-secret relationship. -17 Consistent with Lear v. Adkins, 395 US 653 (1969), Dellar in 1965 went on to write: "After the issuance of a patent for an invention which had been a trade secret, no right to further secrecy exists [I submit-as to the subject matter disclosed in the patent, but no other subject matter, as is developed at p. 32 hereof]. The Restatements The Restatement of Torts in 1939 developed its expression, $757, protective of trade secrets and confidential information, an expression which has been cited with approval in surely hundreds of court opinions. In Comment a to $757, the Restatement of Torts discusses the rationale of patent and trade secret protection, as concurrent systems of protection without conflict between them. Similarly the Restatement of Restitution (1937) provides in its $136 for restitution of the value derived by use of another's trade secret. The Restatement of Agency, 2nd (1958), tracking on this point the pre-1952 first Restatement of Agency, proscribes use of confidential information belonging to another, in its Sections 395 and 396. The Restatement of Trusts, 2nd (1959), provides in $82(e), simply: "A trade secret can be held in trust. Congress gives federal statutory treatment to trade secrets ་ Congress itself has specifically sanctioned payment of consideration for acquisition of "secret processes, technical data, *** and other property or rights by purchase, license, lease ***. This statute is without regard to pendency of patent applications. 42 U.S.C. 1857b-1(b)(4); 16 U.S.C. 778e(e); 30 U.S.C. 322(b). That Congress did not intend to preempt know-how licenses with the patent law, is also evident from Internal Revenue Code, 26 U.S.C. 861(a)(4) and -18 862(a)(4) dealing with taxation of royalties for the licensed use of secret processes and formulas. Congress has recognized the existence of rights in trade, secrets in a multitude of other enactments as well.4 4. See for example, the Freedom of Information Act, 5 U.S.C. 552(b) (4) prohibiting federal agency disclosure of trade secrets; 18 U.S.C. 1905 making it a federal crime for a United States officer or employee to disclose a trade secret; Section 24 of the Securities Exchange Act of 1934, 15 U.S.C. 78x, preventing the SEC from requiring that trade secrets or processes be revealed; Section 6(f) of the FTC Act, 15 U.S.C. 46(f), preventing the FTC from making trade secrets public; 15 U.S.C. 1193(c) requiring trade secrets received by the Commerce Department in reference to fabric flammability regulations to be considered confidential; 15 U.S.C. 1263(h) prohibiting any person from using or disclosing trade secrets acquired in connection with HEW inspection and investigation of hazardous substances; 15 U.S.C. 1401 (e) requiring trade secrets received in Transportation Department inspection and investigation of federal vehicle safety standards to be considered confidential; 21 U.S.C. 331(j) prohibiting any person from using or disclosing information concerning methods or processes acquired under Food, Drug & Cosmetic Act which are trade secret; 21 U.S.C. 458(a)(5) prohibiting use or disclosure of trade secrets acquired under Poultry Products Inspection Act; 33 U.S.C. 466g(f)(2) excluding trade secrets from being disclosed at public hearings under Federal Water Pollution Control Act; 42 U.S.C. 263i (e) prohibiting disclosure by HEW of trade secrets obtained in enforcing Radiation Control for Health and Safety Act of 1968; 42 U.S.C. 1857d (c)(5) providing that no witness shall be required to divulge trade secrets in any hearings under Clean Air Act; 42 U.S.C. 1857f-6c(c) requiring trade secrets obtained by HEW in connection with registration of vehicle fuel additives to be considered confidential; and 35 U.S.C. 122 providing for the preservation of applications for patent in secrecy until the patent issues, i.e., until the applicant knows what patent protection he is going to get and thereafter authorizes issuance of the patent. -19 State Statutes Some 20-odd states have criminal statutes covering wrongful appropriation of trade secrets, 5 many of these statutes using the phrase "trade secrets" as such, and essentially all of the fifty states have civil case law protective of trade secrets and know-how. Federal Rules of Civil Procedure The Federal Rules of Civil Procedure, Rule 26(c), expressly provide for judicial protection against unwarranted disclosure of trade secrets in litigation, providing for protective orders for "(7) *** a trade secret or other confidential research, development or commercial information." -0-0-0 5. Arkansas Statutes, $41-3949; California Code Anno. Penal Code, $499c; Colorado Rev. Statutes (1963), Chap. 40-5-33; Georgia Criminal Code, $26-1809; Smith-Hurd Illinois Anno. Statutes, Chap. 38, $15 et seq; Burns Indiana Statutes, Title 10, $3048; Maine Revised Statutes Anno., Title 17, $2113; Massachusetts Laws Anno., Chap. 266, $30; Michigan Compiled Laws Anno., Title 39, $752.771 et seq; Minnesota Statutes Anno., Title 40, $609.52; Nebraska Rev. Statutes, 1965 Suppl., $28-548.01 et seq; New Hampshire Rev. Statutes Anno., Chap. 580:32; New Jersey Statutes Anno., 2A:119-5.3 et seq; New Mexico Statutes, Chap. 40A16-23; McKinney's New York Laws Anno., Penal Law, $$155.00, 155.30, 165.07; Ohio Rev. Code Anno., Title 13, §1333.51 et seq; Oklahoma Statutes Anno., Title 21, $1732; Purdon Pennsylvania Statutes, Title 18, §4899.2; Tennessee Code Anno., Title 21, $1732; Wisconsin Statutes Anno., Criminal Code, $943.205. -20 |