The Court's questioning of state protection of contracts involving impatented ideas represents a continuation of an approach begun in two important 1964 decisions, Sears, Roebuck & Co. v. Stiffel Co.,"" and Compen Corp v Day Bright Lighting, Inc." In Stiffle, Stiffle mant factured a pole lamp on which it had received a patent. Sears manu

opportunity to obtain an advantage over competitors who do not know or use it. It may be a formula for a chemical compound, a process of manufacturing, treating or preserving materials, a pattern for a machine or other device, or a list of customers.

Restatement of Toils § 757, at 5 (1989). There are 2 general classes of trade secrets: industrial and commercial. See Adelman, Trade Secrets and Federal Preemption The Aftermath of Sears & Compro, 49 J. Pat. Off. Sorly 713, 725 (1967). Commercial trade secrets include customer lists, sales procedures, market surveys and other business procedures not involved in the production aspects of a company. These secrets cannot be patented. Industrial trade secrets which include secret processes, machines, formulas and designs used in marketing products are the secrets which the patent laws were designed to disclose and protect.

Trade secrets can but do not have to meet the rigid qualifications for patents. Mycalex Corp. v. Pemco Corp., 64 F. Supp. 420, 423 (D. Md. 1946), aff'd, 159 F.2d 907 (4th Cir. 1947); Restatement of Torts 757, at 6 (1939). Thus the requirements of utility, 35 U.S.C. § 101 (1964), novelty, id. § 102, and nonobviousness, id. § 103, do not have to be met. But trade secrets must constitute a commercial advance and be an idea previously unused. A comprehensive comparison of patents with trade secrets is contained in R. Milgrim, Trade Secrets at 8-10 & 8-11 (1967). In order to constitute consideration for a contract relating to a trade secret, the idea must be new to the one to whom it is proffered. Masline v. New York, New Haven & Hartford R.R., 95 Conn. 702, 112 A. 639 (1921); Burwell v. Baltimore & O.K.R., 31 Ohio App. 22, 164 N.E. 434 (Ct. App. 1928). The ability to make contracts involving trade secrets had rarely been questioned before Lear. Even in Lear, the lower courts never questioned the right of either party to make this contract. Adkins v. Lear, Inc., 52 Cal. Rptr. 795 (Dist. Ct. App. 1966), rev'd, 67 Cal. 2d 882, 435 P.2d 321, 64 Cal. Rptr. 545 (1967), rev'd, 395 U.S. 653 (1969). The common law has always given the inventor the right to make, use and sell his invention. Rawlings v. National Molasses Co., 394 F.2d 645 (9th Cir. 1968); Chemical Foundation, Inc. v. General Aniline Works, Inc., 99 F.2d 276 (3d Cir. 1938). The inventor was considered to have an inchoate right of property in an invention which he could sell, assign or otherwise dispose. Mullins Mfg. Co. v. Booth, 125 F.2d 660 (6th Cir. 1942); Cook Pottery Co. v. J.H. Parker & Son, 89 W. Va. 7, 109 S.E. 744 (1921). License agreements made during the pending of a patent application have not been questioned in cases involving contracts similar to that made between Lear and Adkins. American Gage & Mfg. Co. v. Maasdam, 245 F.2d 62 (6th Cir. 1957); Kraus v. General Motors Corp., 120 F.2d 109 (2d Cir. 1941). Similarly, the right to enter into a contract before an application for a patent has been filed has been upheld. Fur Grooving & Shearing Co. v. Turano, 39 F. Supp. 877 (S.D.N.Y. 1941). It has always been assumed that an unpatented invention might be the subject of an enforceable contract for payment of royalties for its use. Young v. Ralston-Purina Co., 88 F.2d 97 (8th Cir. 1937). An agreement to pay royalties prior to the issuance of a patent cannot be repudiated even if the patent proves to be invalid. Myers v. Gerhardt, 344 Ill. 620, 176 N.E. 713 (1931). Liability, consisting of damages and/or injunction, for breach of a license is imposed by the courts. Filtex Corp. v. Amien Atiyeh, 216 F.2d 443 (9th Cir. 1954); Aktiebolaget v. United States, 194 F.2d 145 (D.C. Cir. 1951).

20 376 U.S. 225 (1964).

21 376 U.S. 234 (1964).

factured and sold an exact copy more cheaply. The patent was invali dated by a district court, but Sears was enjoined from copying this lamp under the Illinois unfair competition laws which prohibited the copying of articles in the public domain Peasoning that competitors had the right under the federal patent laws to copy any product whitch was not protected by a patent, the Court held for Sears and struck down the statutes as an encroachment upon the federal patent system. In deciding the case, however, the Court stated broadly that states could not, even indirectly, "give protection of a kind that clashes with the objectives of the federal patent laws." In Compro, the defendant had marketed lighting fixtures similar to plaintiff's. Using similar rea soning as in Stiffel, the Court once again held that the unfair com petition laws could not be used to prohibit copying of a competitor's unpatented product. These laws could not be used to defeat the purposes of the patent system.

Stiffel and Compco were widely discussed and several commentators interpreted them as placing the entire body of state trade secret law in jeopardy since trade secrets in unpatented ideas and devices arguably belonged in the public domain, and any protection of them would be in derogation of the patent system."4 The Court's suggestion in Lear that its decision would require the states to reconsider to what extent, if any, they could properly protect “unpatented secret ideas":" thus seems designed to continue, if not increase, the controversy initiated in 1964. The California Supreme Court seems hesitant to reconsider the protection presently afforded unpatented secret ideas;20 however, one federal district court in Painton & Co. v. Bourns, Inc., has recently decided this issue. The district court in agreeing with Justice Black's dissent in Lear concluded that "federal patent law requires an inventor to submit his ideas to the Patent Office before he can compel consideration for the use of his idea." It was decided

22376 U.S. at 231. See note 35 infra.

23 376 U.S. at 238.

24 See, e.g., Adelman, supra note 19; Doerfer, The Limits on Trade Secret Law Imposed by Federal Patent and Antitrust Supremacy, 80 Harv. L. Rev. 1432 (1967); Peterson, The Legislative Mandate of Sears and Compco: A Plea for a Federal Law of Unfair Competition, 69 Dick. L. Rev. 347 (1965); Note, The Stiffel Doctrine and The Law of Trade Secrets, 62 Nw. U.L. Rev. 956 (1968); Comment, 37 U. Colo. L. Rev. 86 (1964).

25 395 U.S. at 675.

26 See note 10 supra.

27 No. 68 Civ. 3834 (S.D.N.Y., Feb. 4, 1970). This is the second recent case decided by Judge Motley in the Southern District in which the unanswered issue of Lear was raised. In Epstein v. Dennison Mfg. Co., 164 U.S.P.Q. 291 (S.D.N.Y. 1969), the court acknowledged Lear. However, the court, noting that no New York decision after Lear had answered this question, resorted to pre-Lear law to answer the issue before it. Thus, this court initially avoided reconsidering its basis for enforcing the rights of owners of unpatented secret ideas.

28 No. 68 Civ. 3834, at 5-6 (S.D.N.Y., Feb. 4, 1970).

and coopera Pratim The Attra Shek Sale Compen, 49 ] Pat Of Surly 711, 724 (167). Commercial trade secrets include cetimer lett, uks peneethers, market surveys and other hominesa proredoms pot involved in the production aspect, al By Der guts and be potruded İndertrial trade secrets warb s rade secret process, melistes, firmas and drugs used in marketing products are the secrets which the patent laws were designed to disclose and prend

Trade your but det have to met the raid qui fcations for patents Mycalex Corps Person Corp, 64 F. Supp. 420, 423 (D. Md. 1946), afd, 199 Pid 907 14th Cir 1547); Restatement of Torts 757, at 6 (199) Thus the rerpárements, ol volty, 15 USC) ¦ 151 (16A), noway, ad § 192, and nonobviousness, ad ↑ 103, do not have to be met. But trade secrets must constitute a commend add ore and be an id a previously une ed. A comgerbirusive comtarison of patent with trade secrets is contained in R. Mirim, Trarle Secrets at 8-10 & 8-11 (1967) In order to constitute consideration for a contrac relating to a trarle ecret, the idea mu& be new to the one to whom it is profered. Misine v. New York, New Haven & Hartford RR, 95 Conn. 702, 112 A. 639 (1521); Borwell v. Baltimore & ORR, 31 Ohio App. 22, 164 NE. 434 (Ct. App 1978). The ability to make contracts involving trade secrets had rarely been questioned before Lear. Even in Lear, the lower courts never questioned the right of either party to make this contract. Adkins v. Lear, Inc., 52 Cal. Rptr. 795 (Dist. CL App-1966), rev'd, 67 Cal 24 8×2, 435 P.2d 321, 64 Cal. Rptr. 545 (1967), rev d, 395 U.S. 653 (1969). The common law has always given the inventor the right to make, use and sell his invention. Rowling v. National Molasses Co., 394 F.2d 645 (9th Cir. 1968); Chemical Foundation, Inc. v. General Aniline Works, Inc., 99 F.2d 276 (3d Cir. 1938). The inventor was considered to have an inchoate right of property in an invention which he could sell, assign or otherwise dispose. Mallins Mig. Co. v. Booth, 125 F.2d 660 (6th Cir. 1942); Cook Pottery Co. v. J.H. Parker & Son, 89 W. Va. 7, 109 S.E. 744 (1921). License agreements made during the pending of a patent application have not been questioned in cases involving contracts similar to that made between Lear and Adkins. American Gage & Mig. Co. v. Maasdam, 245 F.2d 62 (6th Cir. 1957); Kraus v. General Motors Corp, 120 F.2d 109 (2d Cir. 1941). Similarly, the right to enter into a contract before an application for a patent has been filed has been upheld. Fur Grooving & Shearing Co. v. Turano, 39 F. Supp. 877 (S.D.N.Y. 1941). It has always been assumed that an unpatented invention might be the subject of an enforceable contract for payment of royalties for its use. Young v. Ralston-Purina Co., 88 F.2d 97 (8th Cir. 1937). An agreement to pay royalties prior to the issuance of a patent cannot be repudiated even if the patent proves to be invalid. Myers v. Gerhardt, 344 III. 620, 176 N.E. 713 (1931). Liability, consisting of damages and/or injunc tion, for breach of a license is imposed by the courts. Filtex Corp. v. Anien Atiych, 216 F.2d 443 (9th Cir. 1954); Aktiebolaget v. United States, 194 F.2d 145 (D.C. Cir. 1951).

20 376 US. 225 (1964). 21 376 US. 234 (1964).

factured and sold an exact copy more cheaply. The patent was invali dated by a district court, but Sears was enjoined from copying this lamp under the Illinois unfair competition laws which prohibited the copying of articles in the public domain Peasoning that competitors had the right under the federal patent laws to copy any product which was not protected by a patent, the Court held for Sears and struck down the statutes as an encroachment upon the federal patent system In deciding the case, however, the Court stated broadly that states could not, even indirectly, "give protection of a kind that clashes with the objectives of the federal patent laws. In Compro, the defendant had marketed lighting fixtures similar to plaintiff's. Using similar rea soning as in Stiffel, the Court once again held that the unfair comi petition laws could not be used to prohibit copying of a competitor's unpatented product. These laws could not be used to defeat the purposes of the patent system.

Stiffel and Compco were widely discussed and several commentators interpreted them as placing the entire body of state trade secret law in jeopardy since trade secrets in unpatented ideas and devices arguably belonged in the public domain, and any protection of them would be in derogation of the patent system.24 The Court's suggestion in Lear that its decision would require the states to reconsider to what extent, if any, they could properly protect “unpatented secret ideas" thus seems designed to continue, if not increase, the controversy initiated in 1964. The California Supreme Court seems hesitant to reconsider the protection presently afforded unpatented secret ideas; 26 however, one federal district court in Painton & Co. v. "ourns, Inc., has recently decided this issue. The district court in agreeing with Justice Black's dissent in Lear concluded that "federal patent law requires an inventor to submit his ideas to the Patent Office before he can compel consideration for the use of his idea." It was decided

22 376 U.S. at 231. See note 35 infra.

23 376 U.S. at 238.

24 See, e.g., Adelman, supra note 19; Doerfer, The Limits on Trade Secret Law Imposed by Federal Patent and Antitrust Supremacy, 80 Harv. L. Rev. 1432 (1967); Peterson, The Legislative Mandate of Sears and Compco: A Plea for a Federal Law of Unfair Competition, 69 Dick. L. Rev. 347 (1965); Note, The Stiffel Doctrine and The Law of Trade Secrets, 62 Nw. U.L. Rev. 956 (1968); Comment, 37 U. Colo. L. Rev. 86 (1964).

25 395 U.S. at 675.

26 See note 10 supra.

27 No. 68 Civ. 3834 (S.D.N.Y., Feb. 4, 1970). This is the second recent case decided by Judge Motley in the Southern District in which the unanswered issue of Lear was raised. In Epstein v. Dennison Mfg. Co., 164 U.S.P.Q. 291 (S.D.N.Y. 1969), the court acknowledged Lear. However, the court, noting that no New York decision after Lear had answered this question, resorted to pre-Lear law to answer the issue before it. Thus, this court initially avoided reconsidering its basis for enforcing the rights of owners of unpatented secret ideas.

28 No. 68 Civ. 3834, at 5-6 (S.D.N.Y., Feb. 4, 1970).