controlling on the issue of federal preemption, it is noteworthy that lortern states have expressed their public policy by statute, making it a penal offense to steal trade secrets.” Along parallel lines, the Second Circuit has also held that congressional intent makes the Federal Stolen Property Act applicable to trade secrets,70 While preemption and the concommitant monochromatic optique of Justice Black has the virtue of easy application," it hardly meets the needs and realities of a complex, industrial and mobile society. Compare Justice Black's random view of the matU.S.C. 46(1) (1964), preventing the Commission from making trade secrets public; 15 U.S.C. § 1193(c) (Supp. V, 1970), requiring trade secrets received by the Commerce Department in reference to fabric-flammability regulations to be considered confidential; 15 U.S.C. § 1263(h) (1964), prohibiting any person from using or disclosing trade secrets required in connection with Department of Health, Education & Welfare (HEW) in pection and investigation of hazardous substances; 15 U.S.C. § 1401 (c) (Supp. V, 1970), 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) (1964), prohibiting any person from using or disclosing information concerning methods or procesæs required under the Food, Drug & Cosmetic Act which are trade secrets; 21 U.S.C. 458(a) (5) (Supp. V, 1970), prohibiting use or disclosure of trade secrets acquired under the Poultry Products Inspection Act; 33 U.S.C. § 466g(1)(2) (Supp. V, 1970), excluding trade secrets from being disclosed at public hearings under the Federal Water Pollution Control Act; 42 U.S.C. § 263i(e) (Supp. V, 1970), prohibiting disclosure by HEW of trade secrets obtained in enforcing the Radiation Control for Health and Safety Act of 1968; id. § 1857d(c) (5), providing that no witness shall be required to divulge trade secrets in any hearings under the Clean Air Act; id. § 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 (1964), providing for the preservation of applications for patent in secrecy until the patent issues, i.e., until the applicant Anows what patent protection he is going to get and thereafter authorizes issuance of the patent. As Trade Secrets, supra note 5, § 1.10(1). A 18 U.S.C. §§ 2311-18 (1964), as amended, (Supp. V, 1970). 70 United States v. Bottone, 365 F.2d 389 (2d Cir.), cert. denied, 385 U.S. 974 (1966). 71 This virtue is achieved at the cost of dispensing with venerable Supreme Court recognition of trade secrets. See United States v. Dubilier Condenser Corp., 289 U.S. 178, 186 (1933) (inventor may keep invention secret and reap its fruits indefinitely); Becher v. Contour Laboratories, Inc., 279 U.S. 388, 391 (1929) trade secret rights, based on breach of contract or confidential relation, are independent of the patent law). See also Board of Trade v. Christie Grain & Stock Co., 198 U.S. 236, 250-51 (1905) (trade secret owner's rights are not lost by communicating it to persons bound by contract or confidential relationship). These cases demonstrate that trade secret rights are independent of and an alternative to patent law protection. Accordingly, an inventor of matter eligible for both forms of protection has the right to maintain his invention in secrecy (with protection solely against a limited class of persons and only for an indefinite duration) or to disclose his invention in exchange for patent protection (with its extensive breadth and finite period). Nor should sight be lost of the variety of nonpatentable matter which is nonetheless properly eligible for the limited interpersonal restrictions which are imposed by trade secret principles. For an enumeration of the various categories of matter eligible for trade secret protection, ee Trade Secrets, supra note 5, § 2.09. ter with that of Judge Rich, the preeminent dean of the United States Court of Customs and Patent Appeals: We do not, however, agree with the position taken in appellee's brief. He says, for one thing, that the Constitution “grants” patent rights only for limited times. The Constitution grants no patent rights, it grants only authority to Congress to enact laws. He also argues, as is all too prevalent, that the patent laws put things into the public domain when patents expire. Patent laws function only to keep things out of the public domain temporarily. They have nothing to do with putting things into it. They say nothing about right to copy or right to use, they speak only in terms of right to exclude. "Public domain," morcover, is a question-begging legal concept. Whether or not things are in or out of the public domain and free or not free to be copied may depend on all sorts of legal concepts including patent law, antimonopoly policy and statutes, the law of unfair competition, copyright law, and the law of trademarks and trademark registration. What we really do is to determine these legal rights; then we may express the ultimate conclusion by saying something is in the "public domain"—or not in it. All we are concerned with here is the statutes pertaining to trademark registration and the case law construing those statutes.72 III Scars and Compco were public domain copying cases unrelated to trade secret law. They contained unnecessary-and therefore unfortunate-"preemption" concepts. Lear was a licensee estoppel case arising from a patent license. The court in that case relied on the sweeping concepts stated as dictum in Sears to put some aspects of trade secret law in question, despite the fact that no trade secret issues were before the Court nor briefed nor argued for its benefit. Trade secret law exists separate and apart from the patent system and is fundamental to our complex technologically oriented society. It covers matter which is frequently nonpatentable and affords protection only against wrongful use or disclosure. It encourages multiple independent development whereas the Patent Act discourages it. Congress has consistently recognized and protected legitimate interests arising under the law of trade secrets. Assuming that a court might have sufficient data and exper tise to determine whether trade secret law conflicts in any way with the patent system, decisions questioning the viability of trade secret law should not be rendered in the abstract. Nor should dic tum arising in a nontrade-secret context determine the future of this important area of the law. 72 Mine Safety Appliances Co. v. Electric Storage Battery Co., 405 F.2d 901, 902 n.2 (C.C.P.A. 1969). APPENDIX 7 Syllabus. LEAR, INC. v. ADKINS. CERTIORARI TO THE SUPREME COURT OF CALIFORNIA. No. 56. Argued November 20-21, 1968-Decided June 16, 1969. Respondent, an engineer and inventor, was hired in 1952 by petitioner (Lear) to help solve gyroscope development problems. They had agreed that "new idens, discoveries, inventions etc. related to ... vertical gyros become the property of" respondent, and that the inventor would grant Lear a license as to all ideas he might develop "on a mutually satisfactory royalty basis." Shortly thereafter respondent developed a method for improving gyros which Lear incorporated into its production process. In 1954 respondent filed a patent application covering these improvements and entered into licensing negotiations with Lear to establish a royalty rate. An agreement, concluded in 1955, provided that if the "Patent Office refuses to issue a patent. . . or if such a patent so issued is subsequently held invalid... Lear at its option shall have the right forthwith to terminate the specific license so affected or to terminate this entire Agreement . . . .” A patent was issued to respondent in 1960, after several rejections of the application. In 1957 Lear stated that a Patent Office search disclosed a patent which fully anticipated respondent's discovery and that it would no longer pay royalties on the gyros it produced in its Michigan plant, although it continued to pay royalties on gyros produced in its California plant until 1959. Upon receipt of his patent respondent brought suit in the California courts claiming that both the Michigan and California gyros used his patent and that Lear's failure to pay royalties breached the 1955 contract and Lear's quasi-contractual obligations. Although Lear tried to raise patent invalidity as a defense, the trial judge directed a verdict for respondent on the California gyros, holding that Lear was estopped by its licensing agreement from questioning the licensor's patent. Since Lear claimed that it developed its Michigan gyro designs independently of respondent's ideas, the judge instructed the jury to award recovery to the inventor only if it was satisfied that the invention was novel. When the jury returned a substantial verdict for respondent on the Michigan gyros the judge granted Lear's motion for judgment notwithstanding the verdict, finding that the invention had been completely anticipated by the prior art. The California Supreme Court held that the 1955 agreement was still in effect, that Lear did not have the right thereunder to terminate its royalty obligations in 1959, and that the doctrine of estoppel barred Lear from questioning the patent. Noting Lear's claim that it had developed the Michigan gyros independently, the court considered "whether what is being built by Lear [in Michigan] springs entirely from the prior art," found that Lear had in fact utilized the patent throughout the period in question, and reinstated the jury's verdict. Held: 1. Since the California Supreme Court's construction of the 1955 licensing agreement is solely a matter of state law, the only issue open here is raised by the court's reliance on the doctrine of estoppel to bar Lear from contesting the validity of the patent. Pp. 661-662. 2. In the accommodation of (1) the common law of contracts, and (2) the federal law of patents requiring that all ideas in general circulation be dedicated to the common good unless they are protected by a valid patent, the technical requirements of contract doctrine must yield to the demands of the public interest in the typical situation involving the negotiation of a license after a patent has issued. The holding of Automatic Radio Manufacturing Co. v. Hazeltine Research, Inc., 339 U. S. 827, 836, that licensee estoppel was "the general rule," is overruled. Pp. 668–671. 3. Overriding federal policies would be significantly frustrated if licensees could be required to continue to pay royalties while challenging patent validity in the courts, and in this case Lear must be permitted to avoid payment of all royalties accruing after the issuance of the patent if Lear can prove that the patent is invalid. Pp. 671-674. 4. Respondent's claim to contractual royalties accruing before the issuance of the patent, which raises the question of whether, and to what extent, the States may protect the owners of unpatented inventions who are willing to disclose their ideas only upon the payment of royalties is remanded for specific consideration by the California courts. Pp. 674-675. 5. It is inappropriate at this time to pass upon Lear's contention that the patent is invalid, as Lear must address its arguments attacking the validity of the underlying patent to the California courts in the first instance. Pp. 675–676. 67 Cal. 2d 882, 435 P. 2d 321, vacated and remanded. C. Russell Hale argued the cause for petitioner. With him on the briefs were Edwin L. Hartz, Thomas G. Corcoran, and Allen E. Throop. Peter R. Cohen argued the cause for respondent. With him on the brief was Allen E. Susman. Lawrence G. Wallace argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Griswold, Assistant Attorney General Zimmerman, and Howard E. Shapiro. MR. JUSTICE HARLAN delivered the opinion of the Court. In January of 1952, John Adkins, an inventor and mechanical engineer, was hired by Lear, Incorporated, for the purpose of solving a vexing problem the company had encountered in its efforts to develop a gyroscope which would meet the increasingly demanding requirements of the aviation industry. The gyroscope is an essential component of the navigational system in all aircraft, enabling the pilot to learn the direction and attitude of his airplane. With the development of the faster airplanes of the 1950's, more accurate gyroscopes were needed, and the gyro industry consequently was casting about for new techniques which would satisfy this need in an economical fashion. Shortly after Adkins was hired, he developed a method of construction at the company's California facilities which improved gyroscope accuracy at a low cost. Lear almost immediately incorporated Adkins' improvements into its production process to its substantial advantage. The question that remains unsettled in this case, after eight years of litigation in the California courts, is whether Adkins will receive compensation for Lear's use of those improvements which the inventor has subsequently patented. At every stage of this lawsuit, Lear has sought to prove that, despite the grant of a patent |