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Don’t Just Hide Your Best Mode and Call It a Trade Secret

By Procopio Partner Raymond K. Chan

Claims of trade secret misappropriation have become increasingly prevalent in prominent intellectual property disputes, which had previously focused on patent infringement.  For example, Masimo sued Apple last year in the district court for the Central District of California, alleging that Apple misappropriated its trade secrets and infringed its patents on pulse oximetry, the photometric measurement of oxygen saturation in the blood. Masimo recently expanded the dispute by filing a complaint against Apple at the International Trade Commission, where it seeks an exclusion order to ban the importation of the Apple Watch Series 6 (released in September 2020), the first Apple Watch with a pulse oximeter.

The rise of trade secret misappropriation claims may entice a patent owner to diversify its intellectual property portfolio by maintaining certain aspects of its patentable inventions as trade secrets. One seemingly expedient strategy is to apply for a patent for an invention while maintaining the “best mode” for practicing the invention as a trade secret. 

Although U.S. patent law requires the applicant to “set forth the best mode contemplated by the inventor” in the patent specification, the American Invents Act (“AIA”) eliminated the twin threats of patent invalidity and unenforceability for the failure to disclose the best mode. Both legal scholars and law firms have suggested this strategy since the AIA was enacted a decade ago.  However, this strategy is not without pitfalls.

In many inventions, the best mode is often the preferred range of a claimed parameter. Many patent specifications disclose one or more claimed parameters in progressively narrower (and more preferred) ranges, teaching the claimed parameter “in the range of” X to Y, “more preferably in the range of” X1 to Y1, and “even more preferably in the range of” X2 to Y2, the last of which represents the best mode. The seemingly expedient strategy (1) omits the most preferred range of X2 to Y2 from the patent specification, (2) preserves and maintains this range instead as a trade secret, and (3) applies for a patent claim reciting the claimed parameter in the range of X1 to Y1 to cover the invention.

But this strategy backfires if prior art teaching the claimed parameter within the range of X1 to Y1 but outside the range of X2 to Y2 is discovered later during the prosecution of the patent application or during an inter partes review to challenge the resulting patent. Having disclosed only the broader range of X1 to Y1 in the specification, there is insufficient written description support for the narrower range of X2 to Y2. The applicant is therefore precluded from amending the patent claim to narrow the claimed parameter to the “best mode” range, and as a result, the patent claim is found unpatentable in view of the prior art.

Thus, a patent owner seeking to diversify its intellectual property portfolio to incorporate trade secret protection for an aspect of a patentable invention should resist the temptation to simply omit the most preferred range of a claimed parameter and maintain it as trade secret. A better course of action is to work closely with outside counsel versed in both subjects to carefully delineate between the respective scopes of the patent and the trade secret.

 

Raymond K. Chan is a Partner at Procopio and an intellectual property litigator in its Trade Secrets practice group. He counsels clients in all aspects of patent litigation, counseling and prosecution. Raymond’s practice focuses on the automotive, biotechnology, chemical engineering, computer and consumer products industries. He is experienced in managing design patent and trade dress litigation, patents on flame retardant product litigation and global chemical products. Raymond is admitted to practice before the U.S. Patent and Trademark Office.