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The law that has been in action

There would seem to be no point in further citations to prove that:

Both before and after the enactment of the present patent act, Title 35 U.S.C., there was law, firmly recognized in Congressional as well as State law, and in U.S. Supreme Court decisions and FRCP 26(c), which protected trade secrets and confidential information, taxed them as property, and authorized U.S. government purchase, license or lease of them for royalties or other compensa

tion.

All this law is untainted by any suggestion that any alleged "policies found in the patent law" preclude either the protection of or licensing of trade secrets and other confidential information.

5 1/2. The author wrote a basic paper on one intellectual property law's preemption of another, immediately following Sears and Compeo. For further development of the philosophy of the pertinent law, see "A Philosophy on the Protections Afforded by Patent, Trademark, Copyright and Unfair Competition Law", 54 Trademark Reporter 413, a copy of which is annexed as an Appendix hereto.

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IV. THE LEGISLATIVE PROCESS VS. THE
JUDICIAL PROCESS FOR CHANGING
THE LAW

It is significant to note that

(a) neither in Sears v. Stiffel, 376 U.S. 225 (1964) nor Compco v. Day-Brite, 376 U.S. 234 (1946) upon which Mr. Justice Black relies in his partial dissent in Lear,

(b) nor in Lear v. Adkins, 395 U.S. 653 (1969) upon which Judge Motley relied in her opinion in Painton,

(c) nor in the district court proceedings in Painton v. Bourns,

did any party present a brief to the court (a) as to the law of Chapter III of this commentary, or (b) as to the facts of industry practice in action recited in Chapter II of this commentary.

All that industry practice is germane to public policy on the point in question.

The multi-billion dollar balance of payments credits which this country enjoys from know-how licenses is germane to public policy on the point in question.

All that law is germane to the public policy on the point in question.

Further, no party in any of those cases, Sears, Compco, Lear or Painton, presented to the court what the effect of the Painton change of the law (also found in the dissent in Lear), would be upon the perhaps 5000 industrial businesses in the United States, or their employees. These persons comprise John Q. Public, and Mr. Public has had neither day in court nor hearing in Congress, in which to present his views as to what the law, or public policy, should be.

Neither applicable existing law on know-how and trade secrets, nor the effect of the change in the law upon industry, was before the Painton Court, or before the Supreme Court in Lear, Sears or Compcc. -22

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It is thus clear that the judicial process, is not and cannot be the proper process for the kind of change in the law which was expressed by the District Court in Painton.

In a case wherein the government was urging a change in the policy of title to inventions made by employees, the Supreme Court stated:

"The courts ought not to declare any such
policy; its formulation belongs solely to
the Congress. * * * These are not legal
questions, which courts are competent to
answer. They are practical questions,, and
the decision as to what will accomplish
the greatest good for the inventor, the
government, and the public rests with the
Congress. We should not read into the
patent law limitations and conditions
which the Legislature has not expressed."
U.S. v. Dubilier Condenser Corp., 289 U.S.
178, 198, 53 S.Ct. 554, 561 (1933).

Only by considering all the practical issues herein recited, and many more not here developed but as to which there can be no record before the Court, can the proper determination of the balance of public policy be made.

Only legislative bodies have mechanism for considering the views of industry, the reality of proposed law in action.

V.

LEAR v. ADKINS DID NOT CHANGE THIS
BASIC LAW

The United States Supreme Court in Lear v. Adkins, 395 U.S. 653 (1969), did not make any change in the law so far reaching as did the Painton Court, and specifically did not change the basic law above developed. Two points from Lear make this clear:

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Point 1. What was before the Court in Lear?

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In Lear the royalty obligation in issue was tied by the contract-in-suit to "patented or patentable' subject matter--inherently to the concept level of subject matter that is disclosed in patents and not to detailed engineering specifications or know-how level of information that is not disclosed in patents.

the court. The concept level is all that was before

Inherently Lear could not have established new law on know-how levels of subject matter that were not before the Court and not briefed or argued to the Court.,

It is important that this distinction be clear:

Point 2.

While a secret concept disclosed
in a patent issued to the owner of
the secret, is after the patent's
issue no longer a secret subject to
injunctive protection of secrecy,
engineering detail and know-how not
disclosed in such a patent remains
under Lear viable subject matter for
a know-how license or a technology
disclosure contract calling for com-
pensation at the discretion of the
contracting parties.

The Majority's Refusal of the Dissent's
Invitation

A three-Justice dissent-in-part in Lear expressed as the minority view a rule that the patent law had preempted all protection of technological know-how--essentially the same view as that expressed by the District Court in Painton.

The drafters of Title 35 did not so intend. This is clear from the previously cited (footnote 2) 6. Further the Adkins' patent had issued, in that instance disclosing all the royalty bearing (former) secrets, so no continuing secrets or other information kept confidential, were involved in the period of time as to which the Court denied compensation to Adkins.

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Federico, "Commentary on the New Patent Act" by the
primary drafter of that act. Further, prior Supreme
Courts could find no such rule in the patent law.
Nor could the majority of the present Court in Lear.
See also, Arnold, A Philosophy on the Protections
Afforded by Patent, Trademark, Copyright and Unfair
Competition Law", 54 Trademark Reporter 413, an
Appendix hereto.

There is no phrase in Title 35 which can be pointed to as providing that failure to file an application for patent renders the item of information unprotected against misappropriation or use by employees, licensees, or others in confidential relationship.

The majority's action in Lear is what is important. That majority, having considered the threeJustice minority view, said:

"*** we should not now attempt to define
in even a limited way the extent, if any,
to which the States may properly act to
enforce the contractual rights of inventors
of unpatented secret ideas. 395 U.S. at
675.

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By expressly refusing the minority's invitation to the further step, the majority in Lear clearly left the law of technological trade secrets prior to any publication in a patent, just as it was pre-Lear (even though the majority also invited "fully focused inquiry" upon the issue).

Federal courts are bound by Erie v. Tompkins, 304 U.S. 64, to follow the state law, which clearly was left by Lear's majority in the same substance found prior to Lear, Sears and Compco, with respect to trade secret and know-how licensing of subject matter not disclosed in or protected by patent.

Hence, as to any subject matter not disclosed in an issued patent, the prior common law must prevail--I submit unless and until the appropriate legislative body has acted to the contrary.

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