Intellectual Property Directions

Even IP novices know that they are not supposed to make public disclosures of their inventions before filing an application. But do they know what a public disclosure really is? Often prospective clients ask me to sign Non-Disclosure Agreements and while I’m happy to do so, I also tell them it’s not really required and at best gives them the chance to try to squeeze blood from a stone (me!).

In a recent infringement suit (Cordis v. Boston Scientific) the Court of Appeals reinforced this position. The inventor of the stent in question, Dr. Palmaz, was a resident in 1980 when he prepared a 10 page monograph describing his work. He gave copies of the paper to approximately six of his teachers at an oral presentation of his work to these physicians and several other colleagues. Palmaz later gave copies of the monograph to two companies (Vascor, Inc., and Shiley, Inc.) while attempting to commercialize his stent technology. Neither company signed an agreement requiring confidentiality, and the Shiley agreement specifically stated that Shiley “shall not be committed to keep secret any idea or material submitted.”

Three years later he revised the monograph and gave it to a technician and to the University of Texas as part of a research proposal when he joined the faculty there. Clearly none of these releases were covered by an explicit non-disclosure agreement.

The court noted that the dictum that:

A document is publicly accessible if it “has been disseminated or otherwise made available to the extent that persons interested and ordinarily skilled in the subject matter or art, exercising reasonable diligence, can locate it and recognize and comprehend therefrom the essentials of the claimed invention without need of further research or experimentation.”

really goes to the question of whether an interested party could easily obtain the information if they wanted to. In the case of documents in a library, for example, the court would look to how effectively the library’s indexing system points the general public to the document.

In this case the documents were not available to the general public but they were given to interested and skilled-in-the-art parties without an explicit, legally binding NDA. The Court in the past has

recognized the importance of “preserv[ing] the incentive for inventors to participate in academic presentations or discussions” by noting that professional norms may support expectations of confidentiality.

and in this case both the academic norms and the norms of commercial behavior would lead the inventor to believe confidentiality would be observed.

It is well known that certain large companies (IBM) and most venture capital firms will not sign NDAs. As the court recognizes in this decision, many entities, particularly those with deep pockets, decline to sign NDAs because they stand to lose so much if an inadvertent disclosure occurs, not because they intend to violate the discloser’s confidence.

So yes, get NDAs signed and yes, I sign NDAs for my clients; but no, don’t panic if you can’t get one signed. Cordis was able to keep its patent even if Dr. Palmaz didn’t explicitly keep his secrets secret. And maybe that’s our secret.

This entry was posted on Tuesday, April 28th, 2009 at 10:28 pm and is filed under Validity. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.