Secret Weapon

Atlantic Research Systems, Inc. v. Troy

Patent holders with a vulnerable written description flank may want to maneuver a trade secret claim into their IP arsenal.  In Atlantic Research Systems, Inc. v. Troy, the patent holder claimed infringement of a patent covering an improved hand guard system for military rifles. The patent holder also alternatively argued that the infringing product was the result of a misappropriation of a trade secret. Perhaps not surprisingly, the court refused to extend patent protection to an idea that the inventor admitted he had deliberately kept secret from the public. But the court upheld the claim to trade secret protection-reminding companies that, in the right circumstance, a good trade secret claim is no shot in the dark.

The patent at issue covers a protective sleeve used to attach accessories like viewfinders to military rifles. Because of the heat generated by firing, these sleeves-known as hand guards- cannot actually touch the gun barrel. In the case, the inventor and company owner, Mr. Swan, claimed that his former "right-hand man" had taken a trade secret for making a "free-floating" hand guard with only a single attachment point and used it to form a competing business. Mr. Swan also asserted that his hand guard patent covers the free-floating version made by his former employee and that the competing product infringes his patent rights.

The district court granted summary judgment of invalidity, finding lack of a sufficient written description and failure to satisfy the best mode requirement, because the patent specification does not describe the hand guard with a single attachment point. The trade secret claim went to trial. The jury found the former employee liable for misappropriation of trade secret and breach of fiduciary duty and awarded $1.8 million in damages. Both sides appealed.

On appeal, the Federal Circuit affirmed the lower court's determination of invalidity. The appeals court found the patent lacks an adequate description because the claims to a hand guard with a single attachment point exceed in scope the subject matter Mr. Swan chose to disclose. This occurred because Mr. Swan deliberately wanted to keep secret his method for allowing the hand guard to "free float." The court said that inventors can't have it both ways; they either have to disclose their inventions or keep trade secrets secret. (The court also viewed "with extreme disfavor" the inventor's attempt to argue an opposite claim construction from what he advocated below.)

But the court upheld Mr. Swan's claim to trade secret protection, noting that the evidence that helped invalidate the patent served to establish the existence of the claimed trade secret. The defendant's argument based on a lack of written description doubtless helped support the plaintiff's trade secret theory. The jury decided that the secret was "something beyond" what was disclosed in the patent and the court refused to overturn that decision under trade secret's standard of review. The court also held that the case will have to be re-tried, due to an unrelated issued of jury taint, though that ruling does not negate the recognition of the trade secret rights in the opinion as a whole.

While not explosive, Atlantic Research Systems, Inc. v. Troy, offers some interesting fodder for IP battle plans. It reminds patent holders to remember the availability of trade secret protection should it appear that patent rights are in jeopardy of failing. The court recognized "broad" protection of trade secrets, and acknowledged that the issues in a trade secret case are predominantly fact issues for the jury, and accordingly, refused to overturn the jury's factual findings of a trade secret misappropriation. This is in stark contrast to the often-criticized doctrine that the scope of patent claims is a pure issue of law with an unusually high reversal rate. The case illustrates that an inventor asserting trade secret protection probably has a dramatically lower risk of reversal of a jury verdict compared to an inventor asserting patent protection. But patent holders need to remember that they probably cannot simultaneously preserve patent and trade secret protection - a result harmonious with the policy behind the patent laws.

Also, under the very recent amendments to the patent statute in the America Invents Act, the accused infringer would no longer be able to use the "best mode" requirement to attack a patent in this precise situation. Interestingly, the court based its opinion not on the (now defunct) best mode doctrine, but on the separate, surviving doctrine of written description. As a result, despite the efforts of the America Invents Act to promote more patent peace, faulty written description offensives will continue to inflict patent invalidity casualties in patent law's ongoing validity/invalidity wars.

The articles on our Website include some of the publications and papers authored by our attorneys, both before and after they joined our firm. The content of these articles should not be taken as legal advice.