Filing a Provisional Application Does Not Give Away Your Trade Secret

by Elliott Chen

In many cases, companies debate between making use of trade secrets and making use of patents. The two intellectual property regimes have different characteristics. However, a common practice is to file a provisional patent to buy time for a company to make a decision. The decision usually is based on whether the subject matter will be productized, or whether the company wishes to make the financial commitment to a patent. However, one question is whether filing a provisional patent keeps the option of making use of trade secret available. In other words, does filing a provisional patent defer the decision of which intellectual property regime to use.

As long as no subsequent non-provisional application claiming priority to the provisional application is filed and published, the mere act of filing a provisional application for an invention does not jeopardize the ability of an entity to maintain the invention as a trade secret under U.S. Law.

In the Patent Statute, 35 U.S.C. 122(b)(1)(A) states, “Subject to paragraph (2), each application for a patent shall be published, in accordance with procedures determined by the Director, promptly after the expiration of a period of 18 months from the earliest filing date for which a benefit is sought under this title. At the request of the applicant, an application may be published earlier than the end of such 18-month period.”

However, as provided to paragraph(2) of 35 U.S.C. 122(b), “an application shall not be published if that application is...(iii) a provisional application filed under section 111(b).  Thus, provisional applications are never subject to publication by the U.S. Patent Office.

Further, 37 CFR 1.14(a) states, “Patent applications that have not been published under 35 U.S.C. 122(b) are generally preserved in confidence pursuant to 35 U.S.C. 122(a). Information concerning the filing, pendency, or subject matter of an application for patent, including status information, and access to the application, will only be given to the public as set forth in § 1.11 or in this section.”

35 U.S.C. 122(a), which is the basis of the confidentiality in 37 CFR 1.14(a), states “Except as provided in subsection (b), applications for patents shall be kept in confidence by the Patent and Trademark Office and no information concerning the same given without authority of the applicant or owner unless necessary to carry out the provisions of an Act of Congress or in such special circumstances as may be determined by the Director.”

37 CFR 1.14(a)(1)(iv) and (v) provide exceptions to the confidentiality maintained by the U.S. Patent Office for a provisional application, and the exceptions make the provisional application available for public inspection. In summary, the exceptions are (1) a non-provisional application that claims priority to the provisional application is either published or granted as a patent; or (2) another published application or granted patent, regardless of whether foreign or domestic, reveals the serial number, filing date, first name inventor, title, or other application-specific information of the provisional application.

Thus, the confidentiality of a provisional application is maintained by the U.S. Patent Office unless an applicant files a non-provisional application and that non-provisional application is ultimately published or granted, or for some reason, the applicant decides to identify the filing information of the provisional application in another published or granted patent application.

In the Defend Trade Secrets Act, 18 U.S.C. 1839(3) provides the definition of the term, “trade secret.” This definition is also similar to the definition of trade secret in state trade secret laws. The definition states:

The term “trade secret” means all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if—

    (A) the owner thereof has taken reasonable measures to keep such information secret; and
    (B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by another person who can obtain economic value from the disclosure or use of the information.

Thus, as long as the applicant does not trigger the exceptions provided by 37 CFR 1.14(a)(1) with respect to provisional application confidentiality, a court is likely to conclude that the invention described in a provisional application is both: (1) subject to reasonable measures to keep the invention secret; and (2) not readily ascertainable through proper means by another person who can obtain economic value from the disclosure or use of the information.

On the other hand, the filing of a corresponding non-provisional application that claims priority to the confidential provisional application, in which the non-provisional application is then subsequently published at the end of the 18-month period discussed above, will nullify the existence of a trade secret. For example, in Foster v. Pitney Bowes Corp., 549 F. App’x 982 (Fed. Cir. 2013), the plaintiff filed a provisional patent application for an invention, and then filed a non-provisional application claiming priority to the provisional application. Following the publication of the non-provisional application by the U.S. Patent Office, the plaintiff tried to bring a suit for trade secret misappropriation. In determining that there was no trade secret misappropriation, the court decided that there was no existence of a trade secret because the plaintiff had allowed his non-provisional application to publish.

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